Both passengers and freight cannot travel individually, but in batches. Passengers have to go to bus terminals and airports first, where they are “assembled” in busloads or planeloads to reach their final destinations where they are dispersed. Freight has to be consolidated at a port or a rail yard before onward shipment. Terminals may also be points of interchange involving the same mode of transport. Thus, a passenger wishing to travel by train from Paris to Rotterdam may have to change trains in Brussels, or an air passenger wishing to fly between Montreal and Los Angeles may have to change planes in Toronto. Terminals may also be points of interchange between different modes of transportation and their respective networks, so that goods being shipped from the American Mid-West to the Ruhr in Germany may travel by rail from Cincinnati to the port of New York, put on a ship to Rotterdam, and then placed on a barge for delivery to Duisburg. Transport terminals, therefore, are central and intermediate locations in the movements of passengers and freight.

Terminal is any location where freight and passengers either originates, terminates, or is handled in the transportation process. Terminals are central and intermediate locations in the movements of passengers and freight. They often require specific facilities and equipment to accommodate the traffic they handle.

Terminals may be points of interchange within the same modal system and which insure a continuity of the flows. This is particularly the case for modern air and port operations with hubs connecting parts of the network. Terminals, however, are also very important points of transfer between modes. Buses and cars deliver people to airports, trucks haul freight to rail terminals, and rail brings freight to docks for loading on ships. One of the main attributes of transport terminals, international and regional alike, is their convergence function. They are indeed obligatory points of passage having invested on their geographical location which is generally intermediate to commercial flows. Thus, transport terminals are either created by the centrality or the intermediacy of their respective locations.





The importance of a transport terminal is often a function of its size. Large transport terminals, particularly ports and airports, confer the status of gateway or hub to their location since they become obligatory points of transit between different segments of the global transport system. Containerization has favored the emergence of a hierarchy of terminals fulfilling different function and level of added value, from the large mega-gateway coordinating the flows of a large market area to a small rail yard or truck depot servicing a local market. The same observation applies to passengers transport where a specific hierarchy of terminals is evident.



Three major attributes are linked with the importance and the performance of transport terminals:


The major locational factor of a transport terminal is obviously to serve a large concentration of population and/or industrial activities, representing a terminal’s market area. Specific terminals have specific locational constraints, such as port and airport sites. New transport terminals tend to be located outside central areas to avoid high land costs and congestion.


Accessibility to other terminals (at the local, regional and global scale) as well as how well the terminal is linked to the regional transport system is of importance. For instance, a maritime terminal has little relevance if it is efficiently handling maritime traffic but is poorly connected to its market areas through an inland transport system (rail, road or barge).


The main function of a terminal is to handle and transship freight or passengers since modes are physically separated. They have a nominal capacity which is related to the amount of land they occupy and their level of technological, labor and managerial intensity. Infrastructure considerations are consequently important as they must accommodate current traffic and anticipate future trends along with technological and logistical changes. Modern terminal infrastructures consequently require massive investments and are among the largest structures ever built. Airports, ports and distribution centers are clearly visible on remote sensing images. A utilization rate of 75 to 80% of design capacity is considered to be the optimal since above this level, congestion starts to arise, undermining the reliability of the terminal facility. A terminal rarely has a uniform utilization, which is more than often characterized by periods of high and low activity.





The time a vehicle (bus, truck, train, or ship) is allowed to load or unload passengers or freight at a terminal is usually referred as dwell time. For freight terminals dwell time refers to the amount of time cargo stays in a terminal yard or storage area while waiting to be loaded. Dwell time can be operational, which reflects the performance of terminal infrastructures and management, including the scheduling and availability of transport services. It can also be transactional, which is usually linked with the performance of clearance procedures (such as customs). Finally, dwell time can be storage related, implying that the owner or the carrier of the cargo deliberately leaves the cargo at the terminal as part of a transport or supply chain management strategy. Intermodalism has incited new relations between transport terminals, which are becoming nodes in integrated transport chains. This is particularly the case between port, rail and barge terminals. New forms of integration are also emerging, such as between ports and airports.



A transport terminal is composed of a set of intermodal infrastructures taking advantage of a geographical location, conferring a higher level of accessibility to local, regional and global markets. Depending on the mode being considered, terminals are bound to various degrees to the site. For instance, maritime transportation terminals are particularly dependent on local conditions, especially for large port activities which can be accommodated in a limited number of locations. Airport terminals are more flexible in their locations, but still bound to specific locational constrains.

Terminals fulfill three general functions within transport systems:


Transport terminals provide connectivity within a transport network as they are the only locations where a network can be entered or exited. For instance, subway stations are the connecting nodes of a transit network while ports and airports are the connecting nodes of maritime and air networks.


Transport terminals provide an interface between transport modes enabling passengers and cargo to transit. A port or an airport are points of interface between maritime or air and land transport systems.


Transport terminals provide a buffer between the different capacity and frequency of the transport modes they connect, such as a port does for the maritime and land transportation systems. A containership may call a port once every two days while trucks carrying containers may come in and out of the terminal every few minutes. A similar analogy applies to airports that act as buffers between the various levels of service of land transport systems and the scheduling of air services.





Because they jointly perform transfer and consolidation functions, terminals are important economically because of the costs incurred in carrying out these activities. The traffic they handle is a source of employment and benefit regional economic activities, notably by providing accessibility to suppliers and customers. Terminal costs represent an important component of total transport costs. They are fixed costs that are incurred regardless of the length of the eventual trip, and vary significantly between modes.

They can be considered as:

Infrastructure costs

Include construction and maintenance costs of structures such as piers, runways, cranes and facilities (warehouses, offices, etc.).

Transshipment costs

The costs of loading and unloading passengers or freight.

Administration costs

Many terminals are managed by institutions such as port or airport authorities or by private companies (e.g. terminal operators). In both cases administration costs are incurred.




Because ships have the largest carrying capacities, they incur the largest terminal costs, since it may take many days to load or unload a vessel. Conversely, a truck or a passenger bus can be loaded much more quickly, and hence the terminal costs for road transport are the lowest. Terminal costs play an important role in determining the competitive position between the modes. Because of their high freight terminal costs, ships and rail are generally unsuitable for short-haul trips.

Competition between the modes is frequently measured by cost comparisons. Efforts to reduce transport costs can be achieved by using more fuel-efficient vehicles, increasing the size of ships, and reducing the labor employed on trains. However, unless terminal costs are reduced as well, the benefits would not be realized. For example, in water transportation, potential economies of scale realized by ever larger and more fuel-efficient vessels would be negated if it took longer to load and unload the jumbo ships.



Over the last decades, very significant steps to reduce terminal costs have been made. These have included introducing information management systems such as EDI (electronic data interchange) that have greatly speed up the processing of information and removing delays typical of paper transactions. The most significant development has been the mechanization of loading and unloading activities. Mechanization has been facilitated by the use of units of standard dimensions such as the pallet and most importantly, the container. The container, in particular, has revolutionized terminal operations.

For the mode most affected by high terminal costs, ocean transport, ships used to spend as much as three weeks in a port undergoing loading and loading. The much larger ships of today spend less than a couple of days in port. A panamax container ship requires approximately 750 worker/hours to be loaded and unloaded. Prior to containerization it would have required 24,000 worker/hours to handle the same volume of cargo. The rail industry too has benefited from the container, which permits trains to be assembled in freight yards in a matter of hours instead of days. Many mechanized terminals are now being automated, which further expands their productivity and lowers their labor costs. Still, automation involves significant capital expenditures.




Reduced terminal costs have had a major impact on transportation and international trade. Not only have they reduced over-all freight rates, and thereby re-shaping competition between the modes, but they have had a profound effect on transport systems. Ships spend far less time in port, enabling ships to make many more revenue-generating trips per year. Efficiency in the airports, rail facilities and ports greatly improves the effectiveness of transportation as a whole.

Activities in transport terminals represent not just exchanges of goods and people, but constitute an important economic activity. Employment of people in various terminal operations represents an advantage to the local economy. Dockers, baggage handlers, crane operators and air traffic controllers are example of jobs generated directly by terminals. In addition, there are a wide range of activities that are linked to transportation activity at the terminals. These include the actual carriers (airlines, shipping lines etc.) and intermediate agents (customs brokers, freight forwarders) required to carry out transport operations at the terminal. It is no accident that nodes that include a major airport, port or a rail terminal are also important economic poles.

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