Week 4: Hinterland

Question 1

Generalized transport costs

Answer 1

Function: transport cost, time cost, reliability, flexibility, etc.
Influenced by: infrastructure (presence/pricing/congestion), quality of service, political factors

Question 2

Dry bulk vs containers

Answer 2

Dry bulk: few origins/destinations (few transport nodes), captive hinterland
Containers: many origins/destinations (many transport nodes), contestable hinterland (= competition)

Question 3

Issue: coordination hinterland chains, why?

Answer 3

1. Competitive reason: hinterland vital area to cut transport costs (space/cost dichotomy) and large contestable hinterland due to containerization
2. Sustainability reason: increased trade and pressure on infrastructure due to containerization and road most used and capacity to extend limited (increase barge and rail)

Question 4

Cost savings seaside, how?

Answer 4

Economies of scale (increased capacity)

Horizontal cooperations/alliances (container lines)

Question 5

Coordination problems container barging

Answer 5

Long stay of barges in port because of too many calls and too small call sizes (number of containers (un)loaded during visit of a ship)

Question 6

Conditions that hinder/stimulate better performance container barging (IWT)

Answer 6

Culture not problem and favorable conditions by government and PA
Property rights and decision rights problematic and hard to change, market organization is complex

Question 7

Coordination agreements

Answer 7

Incentives
Interfirm alliances (=horizontal): bundling of cargo
Changing scope / hierarchical coordination (=vertical): inland terminal (extended gate model)
Collective action

Question 8

Inland terminal in hinterland, advantages:

Answer 8

Bundling benefits (1) call size and (2) frequency/flexibility for shipper and (3) port turnaround time
Embedded in region, close to final customers and production centers