Fall Summit, HSH Nordbank, Hamburg, Germany, November 15, 2007 Logistics and Logistics and Global Commodity Global Commodity Chains Chains Jean-Paul Rodrigue Associate Professor, Dept. of Economics & Geography, Hofstra University, New York, USA Email: [email protected]Paper available at: http://people.hofstra.edu/faculty/ Jean-paul_Rodrigue
Logistics and Global Commodity Chains. Jean-Paul Rodrigue Associate Professor, Dept. of Economics & Geography, Hofstra University, New York, USA Email: [email protected] Paper available at: http://people.hofstra.edu/faculty/Jean-paul_Rodrigue. . Changes in Global Trade. - PowerPoint PPT Presentation
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Fall Summit, HSH Nordbank, Hamburg, Germany, November 15, 2007
Logistics and Global Logistics and Global Commodity ChainsCommodity Chains
Jean-Paul RodrigueAssociate Professor, Dept. of Economics & Geography, Hofstra University, New York, USA
Email: [email protected] available at:http://people.hofstra.edu/faculty/Jean-paul_Rodrigue
Introduction: Capital on the MoveIntroduction: Capital on the Move
Ports and Terminal OperatorsPorts and Terminal Operators
Container waiting to be loaded, Shenzhen, ChinaContainer waiting to be loaded, Shenzhen, China16
Containerization has Integrated Different Containerization has Integrated Different Transport Systems …Transport Systems …
17
Containerization of Maritime Transport SystemsContainerization of Maritime Transport Systems
Containerport
Containerization of Inland Transport SystemsContainerization of Inland Transport Systems
Intermodalterminal
PendulumServices
Intermodal and Transmodal OperationsIntermodal and Transmodal Operations
Corridor
Offshorehub
InlandPort
… … which Makes the Container more than a which Makes the Container more than a BoxBox
ContainerContainer
ProductionProduction DistributionDistribution
TransportTransport
Modes, terminals, intermodal and transmodal operations
Flow management (time-based), warehousing unit
Synchronization of inputs and outputs (batches)
18
Connecting the Dots: Intermodal Transport Connecting the Dots: Intermodal Transport ChainChain
CompositionComposition
Transfer
InterchangeInterchange
DecompositionDecomposition
Local / Regional Distribution
National / International Distribution
Transport Terminal
‘‘First mile’First mile’
‘‘Last mile’Last mile’
19
Composition: Pallets waiting to be loaded in a Composition: Pallets waiting to be loaded in a container (APL DC - Shenzhen, China)container (APL DC - Shenzhen, China)
Empty trucks waiting to enter China, Hong KongEmpty trucks waiting to enter China, Hong Kong
The “China Effect” and Global Commodity The “China Effect” and Global Commodity ChainsChains
Debt and the Currency Leverage GameDebt and the Currency Leverage GameProduction and Distribution DislocationsProduction and Distribution DislocationsShift in the world’s commercial balanceShift in the world’s commercial balance
28
The “China Effect” is Mainly About Low The “China Effect” is Mainly About Low Manufacturing Wages…Manufacturing Wages…
Major Components to Price Reductions by the Chinese Manufacturing Sector, 2005
39.4%
16.7%
16.0%
11.4%
8.6%
3.1%
2.4%
2.3%
0% 10% 20% 30% 40% 50%
Wages
Export Industry Subsidies & Preferences
Industrial Network Clustering
Undervalued Currency
Counterfeiting & Piracy
Foreign Direct Investments
Lax Health & Safety Regulations
Lax Environmental Regulations
29
… … as Well as the Largest Buyer Financing as Well as the Largest Buyer Financing Scheme in History…Scheme in History…
Goods
Bonds (IOUs)
Asset InflationDebt
Reserves
Interest RatesUnemployment
$ for goods
$ for bonds
United StatesUnited StatesChinaChina USD
USD
BorrowingInvestment
30
… … Where Exchange Rates were Used as Where Exchange Rates were Used as LeverageLeverage
The Three Major Corridors of Maritime The Three Major Corridors of Maritime Circulation …Circulation …
Fos
Tokyo
Genoa
Ningbo
Hamburg
Shanghai
Le Havre
KaohsiungHong Kong
Singapore
Barcelona
Rotterdam
Port Kelang
Southampton
Laem Chabang
OaklandLos Angeles
NorfolkNew York
Charleston
Origin Destination Transit Time (days)Southampton New York 8New York Norfolk 2Norfolk Charleston 2Charleston Rotterdam 10Rotterdam Hamburg 2Hamburg Le Havre 2Le Havre Southampton 1
Origin Destination Transit Time (days)Tokyo Kaohsiung 4Kaohsiung Shekou 1Shekou Laem Chabang 4Laem Chabang Singapore 3Singapore Kaohsiung 3Kaohsiung Los Angeles 11Los Angeles Oakland 4Oakland Tokyo 9
Origin Destination Transit Time (days)Port Kelang Genoa 14Genoa Barcelona 2Barcelona Fos 2Fos Singapore 15Singapore Hong Kong 4Hong Kong Shanghai 2Shanghai Ningbo 2Ningbo Shekou 2Shekou Hong Kong 1Hong Kong Singapore 4Singapore Port Kelang 133
Three Major Pendulum Routes Serviced by OOCL, 2006Three Major Pendulum Routes Serviced by OOCL, 2006
… … Which Implies the Emergence of Global Which Implies the Emergence of Global Trade HighwaysTrade Highways
Equator
North American Landbridge
Eurasian Landbridge
Circum-Equatorial Maritime Highway
Arctic Routes
Atlantic Connector
Pacific Connector
34
The Potential of Containerization of The Potential of Containerization of Commodities …Commodities …
■ For bulk transport• Economies of scale confer a net benefit.• Specialization:
• Low utilization levels and time delays for the assembly of loads.• At most 50% due to empty backhauls, but much lower in reality.
• Containerization:• Flow concept; lower transshipment costs.• Its own warehouse unit.• Faster distribution (extending the realm of perishables).• Levels the playing field, particularly in view of established commodity
shippers.• Respective benefits for bulk and container carriers.• Handle variety requirements.
• Rise in commodity prices makes them increasingly suitable for containerization.
35
… … Where Each System has its own Where Each System has its own Advantages …Advantages …