Release: March 04, 2019

North American Geo-Hierarchy Update

What is it?

The majority of North America ports have been regrouped and restructured at the regional and sub-regional levels to better align ports and rail ramps along lines of geographical proximity, price correlation, and size.

Notable changes include:

• Organizing ports together in new regions that correlate better on price
• Reducing the scope of regions such that aggregation occurs over smaller areas
• Adding more granularity to the East Coast region
• Complete restructuring of rail ramp regions within North America

Additionally, a number of locations are being removed from the geo-hierarchy because they were terminals within other ports or their volume patterns changed to the point of no longer being representative of the region. The removed locations are as follows:

• Bécancour, QC (CABEC)
• Hamilton, ON (CAHAM)
• Gulfport, MS (USGPT)
• Bridgeport, CT (USBDR)
• Portsmouth, NH (USPSM)
• Victoria, BC (CAVIC)
• Portsmouth, VA (USPTM)
• San Pedro, CA (USSPQ)
• Port Elizabeth, NJ (USPEB)
• Georgetown, SC (USGGE)

Figure 1 — Old North American Top-Level Geo-Hierarchy Structure	Figure 2 — New North American Top-Level Geo-Hierarchy Structure

Why did we build it?

The geo-hierarchy for North America is structured to reflect market patterns, which are dynamic and can see significant changes over the years. Xeneta regularly updates geo-hierarchies across all continents to ensure that our platform provides an appropriate matching between freight movement and its associated volumes and prices.

With the updated North American geo-hierarchy, customers will find that North American regions will be easier to target for benchmarking, regional benchmarks will be more accurate, and regions with many ports and rail ramps will have clearer boundaries.

Example use case

1. A customer wants to compare the price of shipping to Canada’s west coast and the US’s west coast. They can select the appropriate region — Canada West Coast and US West Coast, respectively — from the geo-hierarchy and look at the market rates. Previously, ports on the US North West coast (Portland, Seattle, and Tacoma) were grouped together with Canadian West Coast ports (Vancouver, Victoria, and Prince Rupert) and resulted in aggregated rates that did not provide a clear distinction for rates to Canada versus rates to the US.
2. In the old geo-hierarchy, rates for Dallas and Chicago would be aggregated together because both cities fell under the US East Rail Ramp region. This could distort prices because of the significant distance between the two cities. Under the new geo-hierarchy, Chicago is grouped in the Chicago Rail Ramps region, and belongs to the greater US Midwest Rail Ramps region. Dallas now belongs to the TX Rail Ramps region. The two cities will no longer be aggregated together, leading to better benchmarking data for the user.