Coordination and Implementation of National Logistics Policies: Providing a Land Base for Logistics Infrastructure and Activities

Coordination and Implementation of National Logistics Policies: Providing a Land Base for Logistics Infrastructure and Activities

There are several tools behind the setting of national logistics policies. Logistics requires a footprint and the location of this footprint plays a significant part in their efficiency. Providing a land base for logistics infrastructures and activities involves setting logistics zones and inland ports as well as other supportive activities. The most common strategies involve:

  • Logistics park. Develop zones supporting logistics activities, particularly through the principle of economies of agglomeration. This lowers operational costs (e.g. joint infrastructures and utilities) and promotes the setting of logistics services firms. However, the setting of logistics parks has been a strategy followed by many jurisdictions with the expectation of job creation and economic growth, leading in many cases to an oversupply of logistics zones, many with a low occupancy level. Another risk is that the designed function of the logistics park may not meet market demands.
  • Port-centric logistics zone. Develop logistics zones adjacent to port terminal facilities to use the scarce port real estate more effectively. This facilitates imports and exports since the zone has direct access to the port terminal, often not requiring to use of terminal gates. Since much of the freight does not need to enter the local transport system, this can help reduce congestion. However, the land base nearby port facilities usually has higher land values, which can put some pressure on the returns on investment and the type of activities that can be located.
  • Inland / dry port. Develop inland terminal facilities co-located with logistics zones for the purpose of servicing a regional market more effectively. They can promote a modal shift if the facility is connected by rail or barge services. This may also reduce port terminal congestion if some port-related logistical activities are relocated inland. An important aspect relates to the setting of economies of scale along the corridor, enabling the inland facility to be serviced more efficiently. Similar co-location benefits to those observed at port-centric logistics zones are taking place at inland ports. Like logistics zones, there is a risk of the duplication of inland ports and having many facilities underused.
  • Inland container depot. Develop facilities for users to pick up and drop containers outside terminals, including chassis. This helps provide a pool of containers for exporters, potentially reducing port congestion since import containers do not need to be brought back to the terminal facility. The main risk involves an unsuitable location for the inland container depot, leading to longer drayage costs. There may also be not enough demand to support such a facility, which is more suitable when a terminal (port) reaches a high level of activity.