Improving the Connectivity of Logistics

Coordination and Implementation of National Logistics Policies Improving the Global Interface of Logistics

There are several tools behind the setting of national logistics policies. One relates to improving the global interface of logistics with gateways, corridors, and hinterland accessibility strategies. If this interface is improved, it is expected that the national economy is more competitive and can attract international investments. The most common strategies involve:

  • B.1 National gateways. Develop gateways as locations of national strategic interest by improving the capacity and throughput of main terminal facilities such as ports, airports, and (intermodal) rail yards. This requires identifying and coordinating transport infrastructure investments in the gateway area, particularly where are the main physical bottlenecks, and how they could be remediated. The stated goal is often to facilitate modal shift (to modes that are judged to be of higher performance, such as rail and barge) and effective inland freight distribution. The risk usually involves competing national gateways vying for public capital, which can lead to the duplication of infrastructure investments.
  • B.2. Terminals/Distribution centers. Support physical and operational developments of transportation terminals and distribution centers, such as through direct investments, subsidies, and regulations. This allows the coordination of regional transportation more effectively since terminal operators can undertake strategic alliances and ventures with hinterland transport operators and distributional facilities. Further, operational attributes such as operating hours can be improved. The productivity of terminal operators and distribution centers is also associated with a reduction in employment since they tend to be more mechanized and automated.
  • B.3. Intermodal regulations. Open logistical infrastructures such as terminal facilities to global investments, which is a strategy that often takes place when some of the infrastructures are publicly owned and operated. The goal is to improve operational productivity by allowing private firms that would provide investment in infrastructure, equipment, and automation, as well as deliver more effective management. The ownership of some infrastructure can remain public, particularly if important to support national interests (such as ports, airports, and key highways). Deregulation often results in better efficiency and connectivity, as the focus of private transport and logistics firms is profit-driven and less politicized. The risk involves a potential loss of control in terminal development since they are managed by private interests. Deregulation or privatization enables the entry of new providers that may be more innovative and competitive. The drawback is that there is a likely reduction in employment due to efficiency improvements. The profits made from private operations may be expatriated and invested elsewhere. The balance between the strategies of global logistics firms and national interests over the level of control, and influence on supply chains requires constant monitoring.
  • B.4. Corridors and connectors development. Develop or expand key road and rail transport connectors between gateways and the logistical activities they service. This goes beyond capacity issues but also includes coordination and performance. Key capacity bottlenecks are improved by coordinating the operations and investments of various stakeholders. Corridor development focus on improving hinterland transport capacity, efficiency, and reliability with the expectation that economic opportunities will arise. Along corridors, better asset utilization and modal shift are expected to occur, but there is a risk of duplication of connectors if several jurisdictions are involved. The setting of national gateways is often coordinated with corridor development strategies.