14 key advantages of inland ports to boost your supply chain
Over the past decade, there’s been a marked decline of local manufacturing along with an increase in imports. Even with this shift, industrial real estate demand continues to expand.
The real estate needs of importing business are driving this expansion. These companies are looking for strategic locations to support the new distribution patterns required for foreign-made goods.
At the same time, Canada’s major ports face tremendous congestion with the increase of inbound volume of goods manufactured abroad. Projections for the next five to six years indicates some ports will triple containership capacity and freight throughput.
To accommodate rising global imports, the industry is shifting more to an “inland port” model.
Inbound goods are quickly off-loaded from ships and moved to inland distribution centers for subsequent handling and redistribution within the country.
Advantages of inland ports
- Efficiency of rail shipping can exceed that of only using sea and road.
- Avoid heavy congestion at seaports.
- Increased capacity. A supply chain system that includes inland ports increases the intermodal capacity for inland freight distribution. The additional capacity allows for off-site storage.
- Consolidation of import and distribution functions in one location.
- More space available for warehousing and distribution facilities away from seaports. Many seaports have limited land available for expansion leading to a search for lower value locations supporting less intensive freight activities, such as transloading. An example of limited space is in the Vancouver metropolitan area, which is facing land availability issues.
- Sustainable option. Rail travelling to and from an inland port uses less fuel than trucks.
- Excellent market proximity to at least three million people within 320 kms.
- Foreign Trade Zone status and privileges for many of Canada’s inland ports.
- Abundance of reasonably priced commercial real estate for warehousing and distribution.
- Collaboration of stakeholders on implementation and management of inland ports.
- Speeds flow of cargo between ships and major land transportation networks.
- Success of major retailers using inland ports. Among the first and largest users of inland ports are major retailers and importers such as Walmart and Home Depot. Many of these logistics giants saved money by consolidating multiple distribution centers into smaller hubs situated at inland ports with adequate logistics capacity.
- Become a buffer in supply chains, acting as a temporary warehousing facility.
- Improved speed-to-market and the lowest cost shipping for a desirable alternative.