FUNKCIONALNOST LOGISTIČKO-DISTRIBUCIJSKIH CENTARA KAO LUČKIH POZADINSKIH TERMINALA (DRY PORT TERMINALA) - CASE STUDY CITY OF ZAGREB

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1 Ph.D., KRISTIJAN ROGIĆ TOMISLAV ROŽIĆ, B.Eng. University of Zagreb Faculty of transport and traffic sciences Vukelićeva 4, Zagreb GORAN KOLARIĆ, B.Eng. Ministry of Science, Education and Sports Donje Svetice 38, Zagreb FUNKCIONALNOST LOGISTIČKO-DISTRIBUCIJSKIH CENTARA KAO LUČKIH POZADINSKIH TERMINALA (DRY PORT TERMINALA) - CASE STUDY CITY OF ZAGREB FUNCTIONALITY OF LOGISTICS DISTRIBUTION CENTERS AS A INLAND PORT TERMINAL (DRY PORT TERMINALS) - CASE STUDY CITY OF ZAGREB ABSTRACT Technical - technological advances and globalization influence on the development of logistics and distribution methods from point of manufacture to point of consumption. To make this process as successfully as possible, a need of building logistics - distribution centers has occurred, where goods are collected, stored, upgraded and prepared for further distribution to customers. One of the possible functions of logistics distribution centers is their transformation to so called "Inland port terminals" (dry ports). Inland port terminals represent inland intermodal terminal directly connected with the seaport / seaports, where users can leave / pick up their cargo in the same way as in the seaport. The task of the inland port terminal is collecting goods for overseas transport over long distances and distribution of goods at the local, regional and international level. Application of the inland port terminals concept in the seaport hinterland, can increase capacity of the seaport terminal, and thereby eliminate the problem of lack of space or inappropriate access to the hinterland. KEY WORDS: inland terminals, logistics-distribution centers, intermodal terminals, City of Zagreb

2 1. INTRODUCTION Technical - technological advances and globalization influence on the development of logistics and distribution methods from point of manufacture to point of consumption. To make this process as successfully as possible, a need of building logistics - distribution centers has occurred, where goods are collected, stored, upgraded and prepared for further distribution to customers. One of the possible functions of logistics distribution centers is their transformation to so called "Inland port terminals" (dry ports). Inland port terminals represent inland intermodal terminal directly connected with the seaport / seaports, where users can leave / pick up their cargo in the same way as in the seaport. The task of the inland port terminal is collecting goods for overseas transport over long distances and distribution of goods at the local, regional and international level. Seaport quality connection with its hinterland affects on seaports competitiveness and its competitiveness in the global supply chain. Because of all the above, seaports and maritime carriers are trying to implement the integration of seaports with the hinterland, where the inland port terminals fit with direct rail, road and water connections to the seaports themselves. 2. FUNCTIONS OF LOGISTICS DISTRIBUTION CENTERS Today's logistics - distribution centers are complex systems within which it is possible to perform several different activities parallel. One can only be a logistical, such as the storage of goods, but, depending on the concept, there can be performed and various industrial and service activities. Wideness of activities and facilities within each LDC depends on the characteristics of the distribution center location and volume of transported goods. Distribution centers with less movement of goods usually offer basic logistics functions, possibly providing so called value added services. With increasing quantities of manipulated goods the possibility of getting a variety of services within a single LDC grows. In this chapter it will be given an overview of possible services and activities of the LDC. It will be described only those services significant for the transformation of LDC in inland port terminal. 2.1 LOGISTIC STRUCTURE AND LDC CONTENTS Logistic - distribution center (LDC) basically is a system that produces a wide range of different services for different groups of users in different areas of logistics and its associated activities Thus in the system of logistics services may occur services in the following areas 1 : intermodal transport; city logistika; logistics outsourcing; logistics services of warehousing; supply logistics and distribution logistics; 1 Babić, D.: Model kategorizacije logističko-distribucijskih centara, doktorska disertacija, Fakultet prometnih znanosti, Zagreb, 2010.

3 logistics of waste and recycling materials; logistics of hazardous materials; transport services; value added logistics services; packaging and repackaging refinement proccesing, reprocessing and assembly of products inspection labeling and quality control manufacturing activities trade personalization (crosdocking) transportation stock market; train services; human Resource Management; consulting services; optimization of transport chains; customer service center; Free Zone other contents LDC aims to realize the concept of complete logistics services, or use of terminal-related services such as maintenance, repairs and cleaning of containers, special services in storage, etc. A very important role of LDC is also in the international transit of goods, in export-import flows for the needs of regional and national economy. It is possible to connect LDC at the international level in order to achieve acceleration and rationalization of goods flows. The concentration of services in one place, gives the LDC epithet "hotel for the goods". For the development of transport and logistics system on the level of Republic of Croatia it is necessary to build LDC in Croatia. Hereinafter will be described mentioned services, applicable to the inland port terminals and their environment. Road freight traffic negatively affects the living environment, primarily with emission of damaging gases: carbon - monoxide, carbon - dioxide, nitrogen oxide, generating traffic congestion and noise pollution, etc. To reduce these emissions in the transport sector, it is possible by using the intermodal transport technologies, by development of ecological vehicles and less polluting vehicles, better utilization of traveled distance and cargo space.

4 Intermodal transport Road freight traffic negatively affects the living environment, primarily with emission of damaging gases: carbon - monoxide, carbon - dioxide, nitrogen oxide, generating traffic congestion and noise pollution, etc. To reduce these emissions in the transport sector, it is possible by using the intermodal transport technologies, by development of ecological vehicles and less polluting vehicles, better utilization of traveled distance and cargo space. Logistics and distribution centers are positioned in a way to attract freight, transport flows, and one way is their connectivity with major intermodal freight flows in the region. Centre has a function of servicing and concentration of intermodal transport flows in all combinations and technologies for road, rail, water and air transport (container, Huck-pack, Ro-Ro, etc.). LDC are the suitable place to develop and apply intermodal transport technologies. That the application of systems and technologies of intermodal transport can be effective it is necessary to meet certain requirements: Resolve administrative difficulties (lack of regulations in the field of combined transport and divergence of standards of the transport infrastructure and equipment,, transport and information systems.) Organizational harmonization with planning, organizing transport and cargo handling, organization of complementary services (customs, police), IT and cargo tracking (the lack of systems and shared databases) and the lack of clear procedures in the transport process Improving of transport infrastructure that does not favor the development combined transport system and the problems and weaknesses are evident right from the planning of the construction and interconnection of roads and terminals in a single combined transport system by transport corridors, in accordance with the requirements of the European Union. Special problem represent the undeveloped terminals for combined transport at the point of transport units origin in factories or by users for handling transshipment units (containers or removable cargo units). Education and training of personnel customized for operations of intermodal transportation. City logistics Research of urban areas logistics problems, especially large cities, gives different results and practical solutions. Problems and the complexity of logistics in urban areas have given rise to the development of different conceptions of city logistics, and one solution is consolidation and streams to multiple users via LDC. Logistic distribution centers are based on traffic favorable locations on the outskirts of cities or in the metropolitan area, and connect the input output streams, coordinating the flow of goods in the supply and distribution of urban areas 2. Studies of individual systems through cooperation and consolidation of Logistics distribution centers show that it is possible to reduce costs by 5 to 20%. Application of these systems in urban areas, the number of vehicle miles is reduced to 60%, which helps reduce the fleet for the same volume of transport tasks. Size deliveries increased by 15%, and 2 Babić, D.: Model kategorizacije logističko-distribucijskih centara, doktorska disertacija, Fakultet prometnih znanosti, Zagreb, 2010.

5 vehicle occupancy of over 100%. Number of vehicle entries in each urban area is reduced by 30 to 60% 3. With the introduction of cooperative systems increases the reliability of delivery, reduces the required labor force, reduce delivery time, noise and emissions of greenhouse gases, etc. If we consider the case of the city of Zagreb, where freight transport affects all participants in city life, it must be seen in terms of the following stakeholders: residents, carriers, customers, drivers of passenger cars, public transport drivers, merchants and city government. Research conducted in cities of similar size and characteristics as the city of Zagreb has encompassed all of these participants and found that among other things 4 : Delivery drivers - when delivering goods retail store in 30% of cases at the point of disembarkation find at least one vehicle that is already done unloading of goods. Recipients of goods - in delivering the goods in 75% of cases of goods passing through the sales area, and in 40% of cases resulting delay and interruption in sales due to unloading and acceptance of goods. Customers in 25% of cases on their way to sale object they found a delivery vehicle. Passenger vehicles drivers in the afternoon load peak in 10% of cases on their way they meet with three delivery vehicles. The drivers of public transport during the day and during one tour in 60% of cases meet one delivery vehicle. In peak periods, this number is much higher, up to 90%. Pedestrians in 60% of cases during the "walk" meet with delivery vehicle in unloading proces. Possible solution of city logistics in city of Zagreb is in the formation of logistics nodes, in which will be transformed the remote transportation flows, transit transportation and local transportation. An important role should have LDC Zagreb, as the center on the edge of the city that would become a "city gate" in terms of cargo traffic. Distribution logistics Distribution logistics is also called the physical distribution of goods or simply distribution. Simply it can be said that the distribution logistics is of transport of goods between producers and consumers. Distribution logistics is defined as "a stage that follows the production of goods from the moment they are commercialized to their delivery to consumers. It encompasses a variety of activities and operations, which ensure that the goods are made available to customers, whether they are the processors or consumers, facilitating choice, purchase and use of goods" 5. Reverse logistics Logistics operators were in the past mainly focused on supplying markets with semi-finished and finished products. In other words, they were oriented mainly to deliver products to customers, and little engaged in the process of a possible return of goods, materials, packaging, etc. 3 Studija izvodljivosti izgradnje logističko-distributivnog centra u Dugom selu, Fakultet prometnih znanosti, Zagreb, Ibidem 5 Segetlija, Z., Lamza-Maronić, M.: Distribucijski sustavi trgovinskog poduzeća: Distribucijska-Logistika- Informatika, Ekonomski fakultet Osijek, 1995.

6 Reverse logistics in logistics - distribution centers is defined as the management of material resources, which are obtained from the reverse logistics service provider customers. This includes any materials, packaging or products received from clients. Earlier return logistics materials was considered as collection of used, obsolete or damaged products as well as packaging of what is received from the customer to the delivery at the point of final disposal. The goal is an efficient system of reverse logistics to getting maximum value from returned products and materials, with minimal costs. Logistic - distribution centers can be included in these reverse processes because their operators are part of a primary distribution chain. Taking advantage of the existing channels of reverse flows can be achieved economical realization of reversing processes. Value added logistics services Range of needs and requirements set by clients to logistics operators has a constant tendency to increase. Clients require activities that increase the value of their products. Traditional services of LDC and specialized operators are basic activities that are related to the receipt of shipments, storing, preparing for shipping, distribution. On development of value added logistics services activities affects the need to meet the constant changes in market demand.as a result, occur the activities that create the final product that is moving towards the client. Tasks that were traditionally performed at the end of the production line is being moved out of manufacturing facilities and executing the logistics distribution centers by the contracting parties, or logistics operators. Manufacturers of industrial or central warehouse holding stocks of basic products as far as possible and disposed of their distribution until the prompt appears for some special model or type of product in construction, folds and adjusts customer request in a logistic center. Therefore, the logistics distribution centers have developed some additional activities, such as labeling / marking of goods, merge, manual assembly of parts, packing and repacking, then high-value activities, such as sterilization, filling, mixing, painting, final assembly, installation, etc. All of this is supported by service activities relating to customs brokerage, financial advocacy, billing, insurance, information management, etc. The difference between the traditional and highly productive LDC VAL makes a number of services in their facility. With transport function of LDC, the services of goods adding value is the essence of today's LDC. It is at the VAL services these days that can get the biggest financial benefit, so it is LDC Zagreb s mission to impose itself as a center of logistics services, ie value added logistics services at the national level and beyond. Storage function of LDC Warehouse is a place where you place and keep different materials, semi-finished and finished products. The concept can be understood in a broader or narrower terms. In a broader sense warehouse is "next constructed, closed or semi-closed and undeveloped, fenced or unfenced area for storing the goods and everything is in close conjunction with the warehouse, which is an integral part." In so embraced the concept of going and warehouse facilities in which to perform various additional tasks that are an integral part of the process of storage. In a narrow sense however is strictly limited storage space where you store and keeps goods. Thus, the space and the goods together make term storage in the narrow sense. However, the problem of storage, it is possible to observe complete only if the warehouse is viewed in a broader sense. Thus understood notion includes three parts: the handling of goods, i.e., the movement of goods from origin to destination, storage of goods, i.e. protection of goods from a variety of physical and / or chemical influences and methodology, which includes the

7 selection and application of various resources, working methods and information necessary the work processes in the warehouse. The LDC the most storage systems appear in the variants of insourcing and outsourcing. Form of outsourcing storage facilities in our region was most often recognized as the public warehouse and belonged to the first phase of the outsourcing concept where a company whose core business is logistics service chose to transfer the function of storage to external service providers. The centers appear and warehouses for their own needs using companies that have significant and specific storage requirements. Irrespective of variant, storage functions within the LDC occur for several reasons: good infrastructure connections with different types of transport (road, rail, inland water ways); Direct connection to major transport flows provides a good organizational connection with certain types of transport (water line connections and rail transportation); the possibility of assistance on the other subsystems in terms of manipulative transshipment activities and equipment; unnecessary investment for small and medium businesses, companies with variable volume storage requirements, etc. to the storage system with modern technology; easier, cost-effective and flexible approach to the use of special storage facilities (warehouses and cold storage of hazardous substances, etc.); presence of roadside services (customs, veterinary, sanitary, inspection services, shipping agency, customs control, consignment sales, etc.); presence logistics operators for complete service in the supply chain; changing types of transport and form of distribution, etc. Storage is equally important function of LDC and background of port terminals. If these reasons appear storage function in LDC's observe the aspect of one of the functions of the port terminal in Zagreb background, it can be seen that the construction of the port terminal background Zagreb has the potential of developing storage function, with the gravitational zone of km FUNCTION OF LDC AS AN INLAND PORT TERMINAL (DRY PORT TERMINAL) Since the dominant intermodality took place in the ports and maritime transport, it is necessary to develop the activities of goods transport to ports hinterland 7. The way in which ports can extend its "know-how" in order to enhance its strategic objectives is to participate in the development of inland port terminals network. Such terminals apart from providing services like customs clearance, warehousing, packaging, repackaging, etc., they are intermodaly oriented and possess the infrastructure and equipment required for shippers and logistics operators. Major impact on the 6 Rožić, T., Ščukanec, A., Bačura, M.: Goods flow analysis as defining element of LDC location - case study City of Zagreb, DEVELOPMENT OF LOGISTICS BUSINESS AND TRANSPORT SYSTEM, Rodrigue, J.-P., Debrie, J., Fremont, A, Gouvernal, E.: Functions and actors of inland ports: European and North American dynamics, Journal of Transport Geography, Vol. 18, No. 4, pp , 2010.

8 structure and functioning of the inland port terminals is the development and rationalization of intermodal transport operations. Inland port terminals can be seen as an "extended doors" of seaports, through which the transport of the goods can be better controlled and adjusted to the conditions in the ports. Development of inland port terminals represents integration between maritime and inland freight transport 8. Inland port terminals can be characterized by destination as close, midrange and distant inland terminal 9. Distant inland port terminals are the most conventional of all mentioned and have the longest history. The main reason for their implementation is distance and the amount of cargo that makes rail as the most favorable for freight transport, weighing the cost of cargo transportation. Benefits of distant inland port terminals resulting from freight transshipment from road to rail, resulting in reduced congestion on the gates to ports and their surroundings 10. Since one train can replace about 35 trucks in Europe, the impact on the environment by applying these concepts can be greatly reduced 11. Midrange inland port terminals are located at a distance from the port, which generally covers road transport. At such terminals certain operators are directly served by the inland port terminals, while others are served from closer intermodal terminal. In such examples of midrange inland port terminal serve as consolidation point for different rail services, therewith that the administration and technical equipment specific to maritime transport, such as different scanners necessary for the safety and inspection of user are necessary only at one terminal, whether in inland port terminal or at container port terminal. At close inland port terminals, solving local transportation problems associated with ports is of exceptional importance to the ports. Most of the ports don t have enough storage capacity and it is therefore necessary to implement inland port terminals at the edge of town where the port is located. Such terminals consolidated road transport to / from maritime operators outside the town, offering rail service to the port, resulting improved seaport access and decreased roads congestion in the city. For such service reliable rail service is necessary to avoid the delay of loading containers on the ship, and thus the delay of the ships 12. Figure 1a shows the conventional transportation into the hinterland through the seaport, which is based upon numerous links by road and only few by rail, which is usually limited to serving larger centers at relatively large distance from the port. Figure 1b shows the division of inland port terminals to close, midrange and distant to related road and rail connections. 8 Notteboom, T., Rodrigue J.-P.: Port regionalization: towards a new phase in port development, Maritime Policy and Management, 32 (3), pp , Roso, V.: The Dry Port Concept, Department of Technology Management and Economics, Chalmers University of Technology, ISBN , Göteborg, Woxenius, J., Roso, V. and Lumsden, K. (2004), The Dry Port Concept - Connecting Seaports with their Hinterland by Rail, ICLSP Conference Proceedings, Dalian, China, pp Roso, V.: The Dry Port Concept, Department of Technology Management and Economics, Chalmers University of Technology, ISBN , Göteborg, Roso, V., Woxenius, J. and Lumsden K.: The dry port concept: connecting container seaports with the hinterland, Journal of Transport Geography, Vol. 17 No. 5, pp ,

9 a b Inland port terminal Intermodal terminal Direct transport Seaport Road Rail City Figure 1. Comparison of conventional connection of seaports with its hinterland (a) with the concept of inland port terminal (b) Source: Roso, V.: The Dry Port Concept, Department of Technology Management and Economics, Chalmers University of Technology, ISBN , Göteborg, Today, ports are not competing only in customs tariffs and transshipment capabilities, but also in the quality of access to their hinterland. This competition requires port focus on transport links, demand for services in its traditional hinterland, and the development in areas outside their immediate market. By increasing container traffic ports connection with the hinterland becomes a key factor in the competitiveness and port advantages. Apart from environmental benefits, inland port terminals also brings a competitive advantage to the seaports by extending their hinterland, in fact enables seaport access to areas outside their basic gravitational zone, offering shippers low prices and high quality service. Direct benefits from inland port terminals have and rail operators by shifting containers from road to rail, which increases their business volume. Shippers see their advantage in the fact that wellorganized inland port terminal can offer them a greater range of logistics services in the hinterland. 3.1 PORT OF RIJEKA INLAND PORT TERMINAL CONCEPT Application of the inland port terminals concept in the seaport hinterland, can increase capacity of the seaport terminal, and thereby eliminate the problem of lack of space or inappropriate access to the hinterland. This is precisely the case with the Port of Rijeka, which has very limited space for enlargement and certainly not enough space for the amount of cargo that is planned in the next decade. According to this, one of the important functions of LDC in Croatia may be a function of inland port terminal for the Port of Rijeka. In that way Port of Rijeka gets enough space, the possibility for organization additional logistics services in cooperation with the future LDC, as well as increasing terminal capacity. Although implementation of inland port terminals ports as sustainable logistics solutions include a significant investment, this concept can gradually generate a much higher total profit for all concerned

10 parties. Table 1 shows effects of inland port terminal concept on the participants of transport processes 13. Table 1. Effects of inland port terminal concept to the participants of the transport process Distant Midrange Close Seaports Less congestion Expanded hinterland Interface with hinterland Less congestion Dedicated trains Depot Interface with hinterland Less congestion Increased capacity Depot Direct loading ship-train Seaport cities Less road congestion Land use opportunities Less road congestion Land use opportunities Less road congestion Land use opportunities Rail operators Gain market share Day trains Gain market share Day trains Gain market share Road operators Less time in congested roads and terminals Less time in congested roads and terminals Less time in congested roads and terminals Avoiding environmental zones Shippers Improved seaport access Environment marketing Improved seaport access Environment marketing Improved seaport access Society Lower environmental Impact Job opportunities Regional improvement Lower environmental Impact Job opportunities Regional improvement Lower environmental Impact Job opportunities Source: Roso, V.: The Dry Port Concept, Thesis for the degree of doctor of philosophy, Department of Technology Management and Economics, Chalmers University of Technology, Göteborg, 2009b For mentioned reasons it is necessary that future LDC in Croatia is considered as inland port terminal for the Port of Rijeka and accordingly to that it is necessary to adapt all other infrastructure. Considering Port of Rijeka, modernization in all business segments is already in progress, and it can be said that the modernization of the Port of Rijeka, in technological and organizational terms, represents one of the biggest and most significant projects in this part of Europe 14. Modernization of the Port of Rijeka and modern road-rail infrastructure in Croatia deserve considerable attention. Due to Croatian joining to the EU that attention and interest are even more pronounced. Realization of Rijeka Gateway - Project and connecting port with their surroundings and the planned strategic projects of the Croatian Government in the field of road, rail and river traffic are aiming to bring the Port of Rijeka into highly developed ports in this part of the world. Modernization of the Port of Rijeka is a prerequisite for successful functioning of the Port of Rijeka as logistical platform, but also as overall transport system of Croatia. Without modernization of the 13 Roso, V.: The Dry Port Concept, Thesis for the degree of doctor of philosophy, Department of Technology Management and Economics, Chalmers University of Technology, Göteborg, Hauselmaier, S., Lončarić, I., Mataruga, A.: Strategija razvoja Luke Rijeka d.d., Pomorski zbornik 45 1, , 2007.

11 port of Rijeka and its transformation into a logistical platform "drops" the entire transport route of Rijeka - the Danube region, and thus most of the Croatian transport system. In the next ten years in Port of Rijeka,, the plan is to increase the traffic to one million TEU annually. The prerequisite for this is the modernization of the port infrastructure, and modernization and upgrade of the entire road and rail infrastructure of its surroundings. It can be expected that the road transport in Croatia maintain its share of the transport market by EU research, which means that one of the strategic objectives in the functioning of inland port terminals, is such modal split, they will certainly be able to process the increase in rail growth by itself, which will be added to even certain volume of cargo transportation. as a result of shifting freight from road to rail. In this sense, it is necessary to define rail traffic subsystem as part of intermodal transport chain in function of inland port terminal of certain seaport CITY OF ZAGREB AS A LOCATION OF INLAND PORT TERMINAL OF PORT OF RIJEKA In order to extend its performance and incomes Port of Rijeka must expand its orientation from the organizer of cargo transshipment into the initiator of development of transport chain and Croatian transport network. To achieve this port must develop strategic relationships with the transport modes that allow large volumes of transported cargo on a reliable, fast and efficient manner. Another way in which ports can achieve sustainability and availability is a quality connectivity with the hinterland. In order to achieve noted above, port should develop the port area in order to transship cargo on a reliable, fast and efficient manner, because this development could attracted the additional cargo volume. It is also necessary to expand port gravitation area to attract cargo outside the Croatian borders. Port must develop transport towards hinterland, so that it could be distinguished from other ports by creating a service network witch connects hinterland with the port, thereby developing the entire supply chain that gravitate to Port of Rijeka. Focusing on the development of connectivity with the port hinterland and development of the entire supply chain, port could increase the level of participation in the logistic chain of cargo transshipment. In order to achieve all of the above it is necessary to implementation and choose the location of inland port terminal of Port of Rijeka. One of the most important factors for successful business activities of inland port terminal is its geographical location and its location in relation to the most important economic centers in the country and the region 16. To determine the spatial dimension of a port hinterland, apart from transport cost it is necessary to take into account the demand for cargo transshipment on a certain port area and market characteristics 17. In practice, determining the port hinterland port is not only determined by transportation and other costs and market factors, but also the historical, psychological, political and personal factors that result in demand for transportation in a certain area. Operation and function of the inland port terminal at a certain location depend essentially on the structure and characteristics of cargo flows the terminal gravity area. The structure and intensity of cargo flows in a certain area is one of the most important criteria for the selection of macro location of 15 Mlinarić, T. J., Rogić, K., Rožić, T.: Methodology for Determining Dry Port System Transport Network - Case Study Port of Rijeka, DAAAM International Scientific Book 2011, ISBN: , pp , Trip, J., J., Bontekoning, Y.: Integration of small freight transport int he intermodal transport systems, Journal of Transport Geography, 10 (3), pp , Van Klink, A.A., Van den Berg, G.C.: Gateways and intermodalism, Journal of Transport Geography, 6 (1), pp. 1 9, 1998.

12 inland port terminals. Zagreb traffic knot position is suitable for organizing and attracting domestic and transit cargo flows, because he is connecting Adriatic ports as a significant generator of transit cargo flows and countries of Central and Eastern Europe as a destination or starting point of mentioned cargo flows. Zagreb traffic knot is one of the most important transport knots in Croatia, and one of the most important in this part of Europe. It the crossing point of traffic routes from West and Central and Southeast Europe with the directions from the Adriatic ports. The importance of Zagreb traffic knot is reflected in the fact that Zagreb is the largest city in Croatia by population and economic activity, and thus the largest generator of cargo flows necessary for the population supply and the daily flow of economic activity. Zagreb traffic knot is overlap with the Corridor X and Corridor Vb witch are strategically important for Croatia. Shortest link betwenn Zagreb and the Adriatic Sea is a road and railway line which connects it to the Port of Rijeka. This direction coincides with the branch of the Pan-European Corridor Vb. Linkage of Zagreb with Rijeka's harbor is an important element in generating of cargo flows, especially of cargo flows from the Far East and other overseas destinations which are further distributed to other European countries. The impact of Adriatic ports transport volume affects the transport activity in Zagreb traffic knot, because it appears as a natural hinterland and the node from which cargo directed from Adriatic ports can be distributed to their final destinations. in this case Zagreb can be seen as a center in which cargo can be classified, processed and select, for each direction and Adriatic ports. A transport connection of Zagreb traffic knot with ports on the Adriatic Sea is on is very high level reviewing the condition of the road network. The railway network is at a satisfactory level, however, if we want to achieve a higher intensity of transportation of cargo flows by rail from Adriatic ports it is necessary to modernized rail in a technical and technological terms, primarily the Zagreb and Rijeka knots as the most important railway hubs in Croatia. 4. CONCLUSION Gradual growth of containerized has resulted in congesting of container terminals and ports,, traffic jams near the port and extended delivery time of containers. Because of all above mentioned, ports, and maritime operators are trying to implement the integration of ports with the hinterland, where the inland port terminals fit with direct rail, road and inland water ways connections to the ports themselves. Definition of inland port terminals presents them as inland terminals directly connected with the port /ports by rail network. But inland port terminals may also be logistics - distribution centers witch except for direct rail links with the port / ports offers its customers a wide range of different services for different groups of users in different logistics areas and its accompanying activities. implementation of inland port terminals, it is realized transferring large amounts of freight from road to rail module, which contributes to the reduction of environmental pollution by using environmentally friendly modes of transport. Thus direct benefit from the inland port terminals have and rail operators, increasing their volume of business. Except environmental benefits, inland port terminals also bring competitive advantage to the seaport since it extends its hinterland and, in other words enables access to areas outside their basic gravitational zone, offering shippers low prices and

13 high quality service. Shippers see their advantage in the fact that their well-organized inland port terminal can offer a greater range of logistics services in the hinterland. Development of inland port terminals is trend which presents integration between maritime and domestic cargo transportation, or represents the process of port regionalization. For mentioned reasons it is necessary that future LDC in Croatia is considered as inland port terminal for the Port of Rijeka and accordingly to that it is necessary to adapt all other infrastructure. In that way Port of Rijeka gets enough space, the possibility for organization additional logistics services in cooperation with the future LDC, as well as increasing terminal capacity. The ideal location of the modern inland port terminal could be the City of Zagreb, primarily its geographical position and the location in relation to the most important economic centers in the country and the region. The implementation of inland port terminal in Croatia or in other words Zagreb may have a significant role in the further development of transport and logistics system on the level of Republic of Croatia. LITERATURE 1. Babić, D.: Model kategorizacije logističko-distribucijskih centara, doktorska disertacija, Fakultet prometnih znanosti, Zagreb, Babić, D.; Ščukanec, A.; Rogić, K.: Criteria of Categorizing Logistics and Distribution Centers, Promet - Traffic & Transportation ( ) 23, 4; , 2011 Hauselmaier, S., Lončarić, I., Mataruga, A.: Strategija razvoja Luke Rijeka d.d., Pomorski zbornik 45 1, , Mlinarić, T. J., Rogić, K., Rožić, T.: Methodology for Determining Dry Port System Transport Network - Case Study Port of Rijeka, DAAAM International Scientific Book 2011, ISBN: , pp , Notteboom, T., Rodrigue J.-P.: Port regionalization: towards a new phase in port development, Maritime Policy and Management, 32 (3), pp , Riessberger, K., Winkler, M.: Logističko-distribucijski center Zagreb, studija izvodljivosti, Graz, prijevod prof. Lahorka Crnković, Rodrigue, J.-P., Debrie, J., Fremont, A, Gouvernal, E.: Functions and actors of inland ports: European and North American dynamics, Journal of Transport Geography, Vol. 18, No. 4, pp , Roso, V., Woxenius, J. and Lumsden K..: The dry port concept: connecting container seaports with the hinterland, Journal of Transport Geography, Vol. 17, No. 5, pp , Roso, V., Woxenius, J. and Lumsden K..: The dry port concept: connecting container seaports with the hinterland, Journal of Transport Geography, Vol. 17 No. 5, pp , Roso, V.. The Dry Port Concept, Department of Technology Management and Economics, Chalmers University of Technology, ISBN , Göteborg, Roso, V.: The Dry Port Concept, Department of Technology Management and Economics, Chalmers University of Technology, ISBN , Göteborg, Roso, V.: The Dry Port Concept, Thesis for the degree of doctor of philosophy, Department of Technology Management and Economics, Chalmers University of Technology, Göteborg, Rožić, T., Ščukanc, A., Bačura, M.: Goods flow analysis as defining element of LDC location - case study City of Zagreb, DEVELOPMENT OF LOGISTICS BUSINESS AND TRANSPORT

14 SYSTEM SUPPORTED BY EU FUNDS / Pavlin, Stanislav ; Šafran, Mario (ur.). - Zagreb, Hrvatska : Fakultet prometnih znanosti, p (ISBN: ), Segetlija, Z., Lamza-Maronić, M.: Distribucijski sustavi trgovinskog poduzeća: Distribucijska- Logistika-Informatika, Ekonomski fakultet Osijek, Trip, J., J., Bontekoning, Y.: Integration of small freight transport int he intermodal transport systems, Journal of Transport Geography, 10 (3), pp , Van Klink, A.A., Van den Berg, G.C.: Gateways and intermodalism, Journal of Transport Geography, 6 (1), pp. 1 9, Woxenius, J., Roso, V. and Lumsden, K. (2004), The Dry Port Concept - Connecting Seaports with their Hinterland by Rail, ICLSP Conference Proceedings, Dalian, China, pp