A Multi-Layer Perspective about Transport and Economic Development

A Multi-Layer Perspective about Transport and Economic Development

Source: adapted from Notteboom, T. and J-P Rodrigue (2007) “Re-assessing Port-Hinterland Relationships in the Context of Global Supply Chains”, in J. Wang et al. (eds) Inserting Port-Cities in Global Supply Chains, London: Ashgate.

Transport service operations and the associated traffic flows do not take place in a vacuum. Transport markets are not only about reconciling the supply of and demand for transport services but also concern the process of valorization of a location leading to positive impacts on economic development. The interaction with locations (including intermediate locations), transport infrastructure, and transport chain organization also deserves attention:

  • Geographical location (first layer). Locations are relative and define the market potential by being an origin, destination, or intermediary for transport flows. Due to an excellent location and economies of scale and density, many transport nodes such as airports, seaports, railway stations, or intermodal terminals serve as important consolidation and bundling points in transport systems. By offering a good intermediate location near the main maritime routes and production and consumption centers, transport nodes can adopt an important turntable function in national or international transport service networks, thereby attracting destination traffic and substantial transit flows.
  • Transport infrastructure (second layer). A favorable geographical location is meaningless if it is not valorized through the provision of efficient infrastructures. The infrastructural layer involves the provision of basic infrastructure for both links and nodes in the transport system. The development of intermodalism has made particularly relevant the connectivity of infrastructures.
  • Transport service operation (third layer). The transportation of passengers or freight between two places involves using a complex mix of transport infrastructures and transport services. Passengers and goods do not always follow the shortest path between origins and destinations but pass via intermediate nodes. This takes place in view of switching to another transport mode (e.g. transfer from rail to air in an airport) or to shift between small units to larger units of the same transport mode (e.g. transfer from a short-haul intra-regional flight to a connecting long-haul flight or the transfer in a transshipment hub from a feeder vessel to a deepsea post-Panamax container vessel).
  • Transport chain organization (fourth layer). The flow of passengers or freight through a multimodal transport system requires actors who have the managerial capabilities to design a seamless and efficient transport chain. Logistics service providers and freight forwarders have developed a specialization in this area, supported by market knowledge and information and communication systems. At the logistical layer shippers, freight forwarders, logistics service providers, and other market parties design the routing solutions that best fit the requirements of the supply chains they are dealing with. The decision-making at the level of the logistics layers is mainly oriented towards the design of the distribution network and the choice of the transport route and associated transport modes and nodes.

Each layer valorizes the lower layers while a demand-pull is exerted from the higher levels towards more fundamental layers. In a demand-driven transport market environment, the infrastructural layer serves the transport service and chain organization layers. The more fundamental the layer is, the lower the adaptability (expressed in time) in facing market changes. For instance, the planning and construction of major transport infrastructures (infrastructural level) typically take many years. The planning and implementation of new transport services on specific transport corridors (transport-level) usually vary between a few months up to one year. At the logistical level, freight forwarders and multimodal transport operators are able to respond almost instantly to variations in the market by modifying the commodity chain design, i.e. the routing of the goods through the transport system. As adaptable as they may be, they are still dependent on the existing capacity. Still, their decisions often indicate the inefficiencies of the other layers and potential adjustments to be made.