Each transport terminal has its hinterland (or “natural” hinterland), representing a set of customers (distribution, manufacturing, and retailing activities) from which it draws its business. These transactions involve freight flows (or passengers) that the terminal will transship. Movements are either originating or are bound to a space that can mainly be categorized as the main hinterland and the competition margin:
- The main hinterland (or fundamental hinterland) represents an area where the terminal has a dominant, if not an exclusive, market share. It is traditionally the core market area of the terminal where its accessibility is the highest. Other terminals can compete over the main hinterland, but this is likely to be done at a notable disadvantage or in the case where a terminal offers a poor level of reliability.
- The competition margin represents an area where a terminal can be competing with other terminals. The competitiveness becomes a matter of differential accessibility, costs, and quality and reliability of service.
In the above figure, terminals A and B are competing for customers in their competition margin. An island within the hinterland of another terminal can also exist, mainly due to either a privileged relationship between the terminal and a client and/or because of an efficient inland distribution system serviced by a specific transport corridor.