Locate logistics services centres for effective freight movement
I wrote a client report in 2005, providing justification for a logistics hub in the west of Melbourne. Last week, on March 28, an article in the Melbourne Age newspaper caught my attention . It announced the alliance of a commercial property developer and a logistics services provider to operate and further develop three sites located around outer Melbourne. The business carries containers by rail from the Port of Melbourne to the sites, then transfers the containers to trucks for local delivery. The sites are therefore intermodal terminals. Interestingly, the article also called them freight hubs and inland ports, while the State government uses the term freight activity centre. So what term is correct?
My definition of a Logistics Services Centre (LSC) is ‘An investment in intermodal and value adding assets, located away from urban centres but situated to facilitate international trade’. While there is not a standard terminology used for LSC, the designation given to a centre should reflect its size and therefore the range of value adding services offered.
Types of Logistics Services Centres
Freight Village is a road to rail intermodal terminal of up to 10 hectares for consolidating a single commodity (typically agricultural) for shipments to a port or distant city. May be called a Logistics Centre.
Inland Port is in the range of 30 – 50 hectares, connected to main roads and rail lines. About 25% of the area is used for logistics services operations and the balance for value addition. Includes a Foreign Trade Zone, Bonded warehouses or similar. May also be called an Intermodal Freight Terminal or City Freight Terminal.
Logistics Hub is between 2,000 and 5,000 hectares, with about 20% used for logistics services operations. In addition is a freight airport, a professional and business services hub and business activity clusters for defined sectors. May also be called a Special Logistics Area or Freight Industrial Park.
Logistics City can be up to 25 sq. km. in area, linked to a seaport and located near an urban area of more than 3m people. Up to 40% of the area is developed for logistics services operations. In addition to the value adding services of a logistics hub, the site is used to accommodate employees of companies located in the city. It may also include specialist education and training centres and exhibition centres.
In the newspaper article, the managing director of the property development company states that one of the sites will be developed as a ‘logistics city’, yet it is only 180 hectares in area! Similar to many aspects of supply chains and logistics, the terminology of LSC is not clear, leaving what is being discussed open to interpretation.