Locational Characteristics of Dry Ports in Developing Economies: Some Lessons from Northern India

Abstract

Ng A. K. Y. and Cetin I. B. Locational characteristics of dry ports in developing economies: some lessons from Northern India, Regional Studies. Contemporary economic development has triggered the importance of establishing distribution centres at appropriate locations in developing economies. However, so far, academic studies addressing this issue are rather scarce. Hence, by investigating dry ports within two industrial clusters in Northern India, this paper investigates the locational characteristics of distribution centres in developing economies. Analytical results indicate that the spatial dynamics of dry ports in developing economies are different from Western, advanced economies due to geographical diversifications, the different paces of regional development and local practices. This paper also suggests that dry ports in developing economies are more cluster (rather than supply chain) oriented.

Ng A. K. Y. and Cetin I. B. 发展中经济体无水港的区位特征：来自北印度的相关证据，区域研究。当代经济发展强调了在发展中国家特定区位建立配送中心的重要性。然而迄今为止学术界对该问题的关注甚少。通过考察位于北印度两大产业集群的无水港，本文考察了发展中经济体配送中心的区位特征。分析结果表明，发展中经济体无水港的空间活力与西方发达经济之间由于地理差异、不同的区域发展节奏以及地方实践而有所不同。研究同时表明，发展中国家无水港多是集群（而非供应链）导向的。

无水港 区位 发展中经济体 印度

Ng A. K. Y. et Cetin I. B. Les caractéristiques des emplacements des ports secs situés dans les économies en voie de développement: des leçons à tirer du nord de l'Inde, Regional Studies. Le développement économique contemporain a déclenché l'importance d'établir des centres de distribution dans des emplacements appropriés dans les économies en voie de développement. Cependant, jusqu'ici, plutôt rares sont les études théoriques qui abordent cette question. Donc, en examinant les ports secs situés au sein de deux clusters industriels dans le nord de l'Inde, cet article cherche à examiner les caractéristiques des emplacements des centres de distribution dans les économies en voie de développement. Les résultats analytiques laissent voir que la dynamique géographique des ports secs situés dans des pays en voie de développement se distinguent de celle des économies avancées de l'Ouest à cause des diversifications géographiques, de la variation du rythme de l'aménagement du territoire, et des pratiques locales. Cet article laisse supposer aussi que les ports secs situés dans les économies en voie de développement sont orientés plutôt vers les clusters (que vers les chaînes d'approvisionnement).

Ports secs Emplacement Economies en voie de développement Inde

Ng A. K. Y. und Cetin I. B. Standortmerkmale von Trockenhäfen in Schwellenländern: Lehren aus Nordindien, Regional Studies. Aufgrund der modernen wirtschaftlichen Entwicklung ist es in Schwellenländern wichtig geworden, Vertriebszentren an geeigneten Standorten zu errichten. Dieses Thema wurde jedoch bisher in wissenschaftlichen Studien nur selten behandelt. Aus diesem Grund werden in diesem Beitrag die Standortmerkmale von Vertriebszentren in Schwellenländern anhand des Beispiels von Trockenhäfen in zwei industriellen Ballungsräumen Nordindiens untersucht. Aus den analytischen Ergebnissen geht hervor, dass die räumliche Dynamik von Trockenhäfen in Schwellenländern aufgrund von geografischen Diversifizierungen, unterschiedlichen Geschwindigkeiten der regionalen Entwicklung und lokalen Praktiken unterschiedlich ausfällt als die Dynamik in westlichen Industriestaaten. Ebenso wird in diesem Beitrag der Schluss nahegelegt, dass Trockenhäfen in Schwellenländern stärker clusterorientiert (statt lieferkettenorientiert) sind.

Trockenhafen Standort Schwellenländer Indien

Ng A. K. Y. y Cetin I. B. Características de ubicación de los puertos secos en las economías en desarrollo: lecciones del norte de la India, Regional Studies. El desarrollo económico contemporáneo ha impulsado la necesidad de establecer centros de distribución en ubicaciones apropiadas de las economías en desarrollo. Sin embargo, hasta ahora se han llevado a cabo poco estudios académicos sobre este tema. Por este motivo, en este artículo analizamos los puertos secos en dos aglomeraciones industriales del norte de la India para investigar las características de ubicación de los centros de distribución en economías desarrolladas. Los resultados analíticos indican que las dinámicas espaciales de los puertos secos en economías en desarrollo son diferentes de las economías avanzadas de Occidente debido a las diversificaciones geográficas, los diferentes ritmos del desarrollo regional y las prácticas locales. En este artículo también sugerimos que los puertos secos en las economías en desarrollo se orientan más hacia las aglomeraciones (en vez de hacia la cadena de suministros).

Puerto seco Ubicación Economías en desarrollo India

Keywords:

• Dry port
• Location
• Developing economies
• India

JEL classifications:

• O53
• P2
• R12
• R40

Acknowledgements

This study was supported by the Hong Kong Research Grant Council (Project Code A-PC1A). The authors would like to thank Dr César Ducruet (Université de Paris I Sorbonne, France), Dr Oleg Golubchikov (University of Oxford, UK), Dr Peter V. Hall (Simon Fraser University, Burnaby, BC, Canada), Mr Jimmy Pun (The Hong Kong Polytechnic University, China), the Editor, and the anonymous referees for their useful comments and advice. The usual disclaimers apply.

Notes

Until 2008, The World Bank classified India as a developing economy, as well as an emerging market (World Bank, 2008).

The relevance of this statement is confirmed by conducting various interviews with dry port stakeholders in India. According to anecdotal information based on the same group of interviewees, one reason for such an approach is the Indian government's strategy to dominate the market so as to control the growth of foreign-based terminal operators.

This is not ignoring the existence of various works addressing similar issues in developing economies (for example, Derakhshan et al., 2005; Islam et al., 2005; Lee et al., 2008). In all these studies, however, the analysis focuses on port or multimodal transport and/or supply chain development, while dry ports only occupy peripheral roles.

An illustrative example can be found in the Indian state of Assam, where Amingaon dry port (Inland Container Depot Amingaon) undertakes various critical functions sustaining the export of Indian tea (notably ‘Assam Tea’) and its competitiveness against major competitors (like China, Kenya and Sri Lanka), especially in view of the downward pressure in global tea price and the rise of competitors (United Nations Food and Agricultural Organization (FAO), 2007), for example, consolidation, palletizing, stuffing, custom clearance, documentation, etc., as well as being pivotal in sustaining social stability, given the high number of people involved due to the industry's labour-intensive nature. Indeed, according to industrial information, in 2009 the tea industry generated over 1 million jobs annually within North-east India, thus illustrating the potential contribution of dry ports to the region's economy.

For a comprehensive review of location models and their applications, see Seppala (2003), Klose and Drexl (2005), and Zhu et al. (2010).

Apart from shippers (rather than shipping lines and seaports) being the main customers of dry port services, the two case study regions are also located very far away from each other. Moreover, connections between the two case study regions are rather difficult, as any movements between states would trigger considerable border-crossing taxes (cf. Ng and Gujar, 2009a), not helped by existing poor transport infrastructure (a good example is the lack of efficient freight rail, and so only road connection exists) connecting these two regions. Understanding this, any potential competition, or ‘strategic interactions’, between SICD and NICD can be safely discounted.

The information was provided by interviewees. See the fourth section.

In India dry ports are commonly known as an inland container depot (ICD) or a container freight station (CFS). These terms very much reflect the nature of Indian dry ports, that is, handling containerized cargoes.

It is assumed that one TEU carries 14 metric tonnes of cargo. Based on industrial information, each train must carry at least 90 TEUs, that is, 1260 metric tonnes, to enable such a service to become economically viable. Thus, assuming that one train runs per day (360 days per year), there should be at least 32 400 TEUs, that is, 453 600 metric tonnes, available annually for shipment.

Although Roso et al. (2009) briefly describe the locations of Indian dry ports, they do not make any attempt to investigate or explain the reasons behind its spatial pattern.

Similarly, Islam et al. (2005) also point out the lack of ICDs close to industrial clusters as an obstacle to supply chain integration and multimodal transport in Bangladesh. However, they did not make any attempt to explain the necessity for ICDs to be located close to production centres.

According to industrial information, from relatively simple warehousing functions at the start, and most other business activities situated elsewhere, many inland distributions centres in Europe have during their existence been developed towards multifunctional establishments of their respective companies, providing more specialized services.