B.3 – Gateways and Transport Corridors in North America

Authors: Dr. Jean-Paul Rodrigue

The North American economy is articulated along major corridors that connect commercial gateways to their hinterlands.

1. The Spatial Structure of Corridors

Transport corridors are considered the backbones of transportation networks, linking major gateways and hubs through a convergence of freight and passenger flows. Most often, they lie at the intersection of economic, demographic, and geographic processes as they perform both market-serving and market-connecting functions. Thus, the corridor as a notion is neither temporally nor spatially immutable but rather dynamic, contingent on such key factors as economic context (e.g. trade liberalization), investments in infrastructures, and technological changes (e.g. information corridors) and policies. Corridors come in two main categories:

  • Formal corridors. They are constructs trying to expand the planning and investment framework of the involved public and private actors. They can be imaginary, depicting the intention of linking a set of locations. Occasionally, a form of governance, or at least a forum, has been set in place to address some of its challenges, such as articulating investments.
  • Functional corridors. They represent an existing structure of flows along some infrastructure. The corridor is thus an operational reality involving a sequence of infrastructure, terminals, and modes.

The most structured corridors are obviously those that combine formal and functional characteristics. Transport corridors can also display physical variations on a modal basis as infrastructure layout becomes a determining factor. While airline flow configurations show greater autonomy, rail, road, and maritime transport rely more on accessible physical infrastructures. Being a spatial notion, transport corridors are observable throughout the entire spectrum of geographic scales: from an urban setting to a regional level (e.g. Boston-Washington), to a national (e.g. the Interstate and the TransCanada Highway) and an international scale (e.g. the Trans-European transport network, the Eurasian landbrige).

As such, corridors are a fundamental structure shaping economic development. They involve an exchange between firms in order to achieve greater efficiencies in their production systems and supply chains, a process commonly supported by various stakeholders, such as regional governments, promoting economic development. The main economic rationale underlining the economic efficiency of corridors is based on:

  • The greater capacity of corridors in supporting trade volumes is based upon the principle of economies of scale in transportation. This is likely to be the single most important factor behind the creation of corridors.
  • Better integration between production and distribution due to cost and time efficiency along corridors. The corridor becomes an intermodal supply chain composed of gateways and inland ports.
  • Greater reliability of distribution because of transport performance, but also because of more coordinated governance (such as identifying critical infrastructure) and more efficient cross-border flows (for transnational corridors).

There is also a risk common to most corridors to reach various diseconomies. The most prevalent is congestion, as the heavy usage of infrastructures leads to capacity limits. Another concern is higher costs due to real estate pressures since the land along the corridor is more valuable because of its accessibility and commercial potential. This can be an issue along high-density corridors in Asia (e.g. Tokaido in Japan), Western Europe, or the Eastern Seaboard in North America.

2. North American Integration

The scale and scope of globalization have created an environment where the transport sector is adapting to an expanded geography of distribution. This is particularly the case for North America, where large distances are involved because of the scale and scope of the production, distribution, and consumption taking place. Historically, North America, mostly at the national level, was developed as a lattice of gateways and corridors, enabling market expansion and access to the resources of the continent. The outcome was a set of functional regions with respective levels of specialization and comparative advantages, leaving the North American economy an integrated system of global and regional supply chains structured by networks linking production centers and distribution hubs across the continent. These supply chains depend on an efficient infrastructure and on a coherent and consistent system of regulations. Therefore, and more than anywhere else in the world, North American integration is not necessarily about trade but about functionally integrated supply chains.

Liberalization and globalization of trade have made restructuring North American transport corridors necessary as the commercial environment changed. These include three main longitudinal (north, central, and south) and four latitudinal (west coast, central, NAFTA, and east coast) axes. Ongoing deregulation combined with the North American Free Trade Agreement (NAFTA) concluded in 1994 following the Canada-USA Trade Agreement (CUSTA) in 1991 have had some impact on North American transport corridors. First, by increasing overall transborder freight traffic and, secondly, by emphasizing North-South regional corridors at the expense of long-haul East-West intra-national routes. In 2020, NAFTA was reformed into USMCA, which included additional clauses concerning copyrights, intellectual property, and some protective measures over key resource sectors. The most prevalent transborder corridors are:

  • The Toronto-Windsor-Detroit-Chicago corridor is one of the densest and most integrated. The geography of the Great Lakes creates a funnel effect, with the Niagara peninsula and the Windsor-Sarnia region being the only outlets. At the other end of the mid-continent (NAFTA) corridor is the Laredo inland port, a major gateway into Mexico. About a third of the volume involves auto parts produced in Southern Ontario and in the border regions of Mexico, which are used for low-cost car manufacturing in the Southeast states. The mid-continent corridor also has an extension reaching Winnipeg.
  • The Vancouver-Seattle corridor in the Pacific Northwest and its counterpart, the Los Angeles-San Diego-Tijuana corridor.
  • The Montreal-New York corridor, which connects the Quebec-Windsor corridor to the Boston-Washington megalopolis.

The NAFTA Corridor links the two largest land gateways of North America, Detroit, Michigan, and Laredo, Texas. It dominantly relies upon trucking as about 65% of the value of the NAFTA trade is serviced by this mode. However, it is far from being a continuous corridor as northbound flows of Mexican imports, and the southbound flows of Canadian imports dwindle as the distance from their respective borders increases. The threshold is around the Tennessee / Kentucky range, past which the respective flows are very small.

A transfer of freight traffic and activities from traditional East-West corridors to regional North-South axes is in process. This is not to say that the role of traditional latitudinal routes is to be neglected. Firstly, they are of prime importance to internal freight and passenger movement, and, secondly, the Quebec-Chicago and Boston-Washington corridors remain core regions of North American transport activities.

4. North American Gateways

Gateways remain a relatively constant component in the global space of flows. They can be seen as semi-obligatory points of passage linking the global with the regional and the local. Gateways come in three major categories linked with the mode of entry, whether land, maritime, or air. In North America, there is a high level of concentration of economic activities along coastal areas (East and West coasts) with significant resources and manufacturing hinterlands. Gateways tend to be the dominant markets on the East and the West coasts. From the start, it was mainly commercial considerations that shaped the setting of North American gateways and corridors, which have remained quite stable in time, albeit with an ongoing trend of traffic concentration. Like other gateway systems around the world, North American gateways, particularly maritime and air gateways, have been quite stable in time, implying that the dominance of gateways such as Los Angeles or New York is not much challenged. Still, this does not prevent new gateways from emerging and consolidating, such as Savannah (maritime) or Laredo (land). North America relies on relatively few small number of gateways and less developed port ranges have few chances to fully take part in international shipping networks.

Land gateways are those that have experienced the most changes, as NAFTA helped restructure commercial flows in North America. They commonly have a simple transit function with some nearby logistics and manufacturing activities, particularly when there are significant wage and regulatory differences, such as in the case between the United States and Mexico. The Maquiladoras, a border region system of manufacturing activities mostly servicing North American supply chains, are interfacing with the North American transport system through a series of land gateways, mainly centered around Southern California, El Paso, and Laredo. They are dominantly servicing an import function, expanded under NAFTA trade, and connected to corridors of continental freight circulation. Manufacturing tends to take place on the Mexican part, and logistical activities managing this freight take place on the US part.

The US-Canada border shows a different dynamic as the gateway, in this case, is simply a point of transit for medium/long-distance truck traffic (some rail) between manufacturing and consumption areas. The border region itself, even near gateways, has not seen a significant accumulation of logistical activities, particularly because the Canadian and American economies are already fairly integrated, and the bulk of the Canadian economic activities are located within 150 km of the border anyway. The last geographical characteristic has not induced significant development close to border locations, as opposed to what took place along the US-Mexican border.

Air gateways are linked with major metropolitan areas and tend to have more inland locations as they are not bound to strong transshipment constraints but to the rationale of moving air freight as close as possible to its final destination. Maritime gateways are large terminals with strong high capacity inland connections (rail and road). Due to congestion and lack of space for logistical activities near maritime terminals, the emergence of inland ports (such as satellite terminals) appears to be a significant trend, well developed in Europe but emerging in North America. An important characteristic of North American gateways, particularly maritime gateways, is the imbalanced traffic, a reflection of the negative trade balance that has endured in the United States since the 1990s. For instance, of the total value of trade handled in 2007 by American maritime gateways, imports accounted for a staggering 73%. The structure of global trade thus impacts heavily on the operations of North American gateways.

From a planning perspective, North American gateways fill three major roles:

  • Infrastructure. They provide the infrastructure and therefore the capacity to undertake trade; import and export flows alike. So, gateway capacity issues are often part of national trade facilitation strategies by trying to mitigate bottlenecks, whether they be at terminals or specific segments. For North America, the West Coast was particularly prone to such strategies because the surge in the transpacific trade placed pressure on port and rail infrastructures.
  • Integration. It mostly deals with regulatory issues related to trade, namely customs procedures and border crossing. Therefore, flows within a supply chain are more fluid, which is particularly important for cross-border flows, like those taking place in the North American Midwest, since they are coordinated within a much tighter time sequence than maritime international trade flows coming through the East and the West coasts.
  • Market. Gateways are market development tools, either on the maritime foreland (expansion of services) or on the hinterland. The latter is particularly important as it reorganizes corridors and inland freight distribution.

5. Corridors and Inland Freight Distribution

Although North America has a lattice of highways connecting all the major metropolitan areas, it is the long-distance rail corridors supported by an intermodal rail system that plays the most significant role in commercial flows. This implies that each gateway has a different modal split depending on the density of the regional market and railway connectivity to the hinterland. From coastal gateways, longitudinal long-distance rail corridors, often taking the form of a landbridge, are servicing a continental hinterland articulated by major transportation and industrial hubs such as Chicago and Kansas City. The structure of the North American urban system underlines the Midwest as the most accessible location for trucking to service a large segment of the American population.

Rail freight in the United States has experienced remarkable growth since deregulation in the 1980s (Staggers Act), with a 77% increase in tons-km between 1985 and 2003. The double-stack trains are having unit capacities of up to 400 TEU and a total length of well above 2 km. Intermodal rail accounts for close to 40% of all the ton-miles transported in the United States, while in Europe, this share is only 8%. The main growth factors for rail activity in recent years have been linked with a surge in international containerized trade, particularly across the Pacific, a growth in the quantity of utility coal moving out of the Powder River basin, and a growth of the Canadian and Mexican transborder trade. Intermodal and coal represent the two most important sources of income for most rail operators. The two largest North American railroads, UP and BNSF, derive a sizable share of their operating revenue from long-distance intermodal movements (landbridge) originating from the Pacific Coast. The construction and upgrade of intermodal rail terminals have been a prevalent trend to support this system of freight distribution.

The emergence of landbridges is a good example of the setting of an intermodal freight distribution system relying on long-distance rail freight corridors. A landbridge has many definitions but can be summarized as a long-distance rail corridor connecting two major port gateways on different maritime facades. The main North American landbridge links two major gateway systems; Southern California and New York/New Jersey via Chicago. Thus, the North American landbridge is mainly the outcome of growing transpacific trade and has undergone the containerized revolution; container traffic represented approximately 85% of all rail intermodal moves. Landbridges are particularly the outcome of cooperation between rail operators eager to get lucrative long-distance traffic and maritime shippers eager to reduce shipping time and costs, particularly from Asia. Long-distance intermodal rail corridors are also planned in Mexico. Kansas City Southern de Mexico (KCSM, a subsidiary of Kansas City Southern) is building an intermodal terminal next to the port of Lazaro Cardenas. KCSM plans to establish a new international intermodal corridor stretching 1,300 miles across Mexico to the border crossing at Laredo, Texas. At Laredo, the Kansas City Southern system that connects to major American rail hubs, namely Chicago and Kansas City, takes over.

A number of factors, such as road congestion, infrastructure capacity issues, and higher fuel prices, challenge the advantages of the landbridge, particularly for long-distance trade. For instance, in 2007, shipping a forty-foot container from New York to Korea costs about $3,000 if the all-water maritime route through the Suez Canal is used and $9,000 if shipped by rail to a West Coast port and then across the Pacific. Thus, this form of rail intermodalism appears to have reached a phase of maturity. Still, the market segment of domestic (North American) rail intermodalism is expected to grow substantially as the only available alternative to long-distance trucking. This will lean on the setting of a variety of inland terminals acting as load centers for the respective market areas.

Related Topics


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