Centrality, flexibility and floating stocks: A quantitative evaluation of port-of-entry choices

Ports provide a number of logistical choices concerning storage, onward transport and postponement. We investigate the flexibility offered by ports of a central location with respect to hinterland transport. This is illustrated through a case in which a number of alternative strategies are evaluated by means of simulation. We provide a simulation model and illustrate it with a case using detailed cost data, which allows us to quantify the value of the rerouting alternatives. A strategy that employs regional distribution centers coupled with a European Distribution Center results in the lowest cost per container. The superiority of this policy over standard centralized or decentralized distribution networks is largely based on the optimal balance between inventory and transportation cost, and the flexibility it offers.