talking freight seminar freight and economic development glen weisbrod economic development research...
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Talking Freight SeminarTalking Freight Seminar Freight and Economic Freight and Economic
DevelopmentDevelopment
Glen WeisbrodGlen Weisbrod
Economic Development Economic Development Research Group, Inc.Research Group, Inc.
2 Oliver Street, 92 Oliver Street, 9thth Floor FloorBoston, MA 02109 USABoston, MA 02109 USA
www. edrgroup.comwww. edrgroup.com
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Three ThemesThree Themes
1. Freight Flows: changing due to National & Global Economic Markets.
2. Economic Development: depends on Market Access & Competitiveness.
3. Infrastructure Investment: directly affects Costs & Competitiveness.
33
Freight Growing Faster than Pop.Freight Growing Faster than Pop.Trends…
0%
5%
10%
15%
20%
25%
1992 1993 1994 1995 1996 1997 1998 1999 2000
MfgShipmentValue
Population
Freight ton-miles
Value of Mfg
Freight Ton-Miles
Population
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Changing Freight PatternsChanging Freight Patterns
• Higher value/weight
• Higher time sensitivity
• Overnight delivery
• Small package delivery trucks
• Air & Marine port dependence on rail & hwy
• Rail & truck companies focus on long-hauls
Trends…
55
Congestion Costs of Delay
Overnight Delivery Services –earlier pickup deadlines, fewer deliveries per driver
Manufacturers –overtime for handling deliveries
Concrete mixer trucks –shrink delivery area (spoilage)
Shippers, Air/Water Ports, Rail – miss delivery deadlines or pad schedules
Economic Development…
66
Competitiveness & ProductivityCompetitiveness & Productivity
Effects on Business Location & Growth…
• Breadth of Suppliers & Labor Inputs
• Size of Customer Delivery Markets
• Economies of Scale in Serving Markets
• Transportation Choice: Reliability, Modes
Economic Development…
77
Urban Freight LimitationUrban Freight Limitation
• Higher Cost to Serve Markets
• Reduced Schedule Reliability
• Reduced Access & Scale Economies
Smaller Market Area can be served within requirements for cost and service quality
Economic Development…
Reduced Opportunity for Attracting and Growing Business …
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Example: Vancouver BC International Trade Gateway
Urban Econ Development…
99
Vancouver No Build ScenarioVancouver No Build Scenario
Ground Transport • Cars – increase in travel expense ($134 million/yr)
• Trucks – raise shipper costs; reduce business competitiveness & attraction ($280 million/yr)
• Rail – capacity limitation: businesses seek alternative routes at higher cost (1100 railcars/day)
Ports • Marine ports – higher cost, shift activity elsewhere• Airport – raise costs for airport use
Diff: Build vs. Not
Urban Econ Development…
1010
Vancouver Economic ImplicationsVancouver Economic Implications
Economic Value of Gateway 30 Port Terminals, 22 Rail Yards, Airport, Border Crossings On Site: 75,000 jobs, W. Canada: 145,000 jobs
Economic Impact of Constraint on Growth:• 7,300 to 16,300 jobs• $ 475 million to $ 1.1 billion of GDP /year
Economic Stakes for Cost Competitiveness:• Over 150,000 jobs in production industries produce over
$30 billion of exports /yr that depend on Vancouver Gateway competitiveness
Urban Econ Development…
1111
Vancouver…
To Trans Can Hwy
To US Border
Urban Econ Development…
1212
Strategies for Port/Gateway AreasStrategies for Port/Gateway Areas
• Access Corridor – Los Angeles (Alameda Corridor)
• Satellite Ports– NY Port Inland Distribution Network
• Feeder System – Rotterdam (Inland Ports)
Urban Economic Development…
1313
Example: Chicago Rail YardsExample: Chicago Rail Yards
• 74 rail yards, 17 for intermodal (rail-truck)
• delays at 600 grade crossings
http://hometown.aol.com/chirailfan/watchmap.htmlhttp://hometown.aol.com/chirailfan/watchmap.html
• congestion from 3200 daily truck trips transferring cargo from yard to yard
•Abandoned & under-utilized rail yards
Urban Econ Development…
1414
Chicago Scenario ImpactsChicago Scenario ImpactsScenarios (with & without reuse of abandoned rail yards)
• Base Case: existing facilities, adjust over time• Shift Intermodal to Rim: periphery of region• Rationalization: Consolidate w/upgraded infrastructure• Minimal Rail Freight in City: Intermodal moves to periphery;
loose-car business de-marketed • Bypass Chicago: Reroute trains to bypass routes
Urban Econ Development…
1515
NCHRP Study 8-42NCHRP Study 8-42How Can We Use Rail Freight Solutions to
Address Roadway Congestion
• Converging interests of private sector transport carriers and public planning agencies
• Reducing Congestion and Road/Rail conflicts that adversely affect business profits, public safety and economic development opportunities
• Developing Framework for Decision-making
Economic Development…
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Rural Freight LimitationsHigher Trucking Cost –due to “deadheading”
Lower Availability When Needed –reliability reduced by vehicle shortages, delays
Higher Rail Cost –full line cost for rail service to/from intermediate locations
Rural Economic Development…
Smaller Market Area can be served within requirements for cost and service qualityLower Value Added of existing products
Reduced Opportunity for Attracting and Growing Business …
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Example: Appalachian Corridor TExample: Appalachian Corridor TRural Economic Development…
NY-17, Now I-86, Southern Tier Expressway
Mountain Region of Southwest NY State, Near Pennsylvania Line
Area had been economically distressed and losing jobs
I-86 designation brought new freight distribution, manufacturing, and traffic-serving businesses.
FHWA Study compared it to a similar area with no new highway connections
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Highway & Mfg EmploymentHighway & Mfg EmploymentRural Economic Development…
Manufacturing 1995 1997 2000
Southern Tier West 0.0% -0.3% 1.6%
North Country Central 0.0% -4.9% -13.2%
NY State Total 0.0% -6.2% -14.0%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
1995 1997 2000
Southern Tier West
N. Country Central
NY minus NYC
Southern Tier West
N. Country Central
1919
Example: Janesville, WIExample: Janesville, WI
• Auto Mfg – GM, Chrysler• Parts Mfg –to S Carolina (BMW),
Mexico & Mich. (Ford), Ontario & Missouri (Chrysler)
Regional automotive mfg cluster
• Reliance on just-in-time mfg, increasing needs for air and reliable truck movements
• Current facilities cannot meet this need, reducing productivity and efficiency in mfg
• Potential loss of jobs to Mexico or Canada
Rural Economic Development…
2020
WisDOT: Multi-Modal Freight AccessWisDOT: Multi-Modal Freight AccessRail DelayRoad Delay Airport Constraints
Airport Improvements ($9.1 million) Highway Access & Rail Crossing
Improvements ($13.5 million)
Rural Economic Development…
2121
ARC Export Transportation StudyARC Export Transportation Study
Overseas Exports are IntermodalOverseas Exports are Intermodal Truck to Air Rail or Truck to Sea
Rural Economic Development…
2222
Appalachian Development HighwaysAppalachian Development Highways
Serve historically isolated areas; improve access
Link to major markets and trade routes
Motivated by econ development
Rural Economic Development…
2323
ARC Export Export StudyARC Export Export Study
Florida
New York York
Michigan
Auto Parts, Upholstered FurnitureAuto Parts, Upholstered Furniture
New York
Florida
Maryland
Michigan
Texas
Food Processing MachineryFood Processing Machinery
Rural Economic Development…
2424
ARC Study FindingsARC Study Findings
• There are limited E-W freeways, rail lines & inter-modal connections across Appalachia, raising costs & constraining export opportunities.
• States in eastern side export more to Europe because of easier access to east coast ports.
• States in the western side export more within North America because of better access to industrial parts of Canada and Mexico.
Rural Economic Development…
2525
…business growth & attraction depends on connections to markets, not just presence of a highway…
Freight Connections Alone Do Not Cause Economic Development
Conclusions…
ARC Guide: help planners identify opportunities related to new highways, and actions needed to pursue them.
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• Lost opportunity for economic growth, good-paying jobs, new jobs for next generation.
Potential Benefits of Infrastructure Investment…• Opportunity for success is not lost.
But Failure to Provide Freight Access Constrains Economic Development
Conclusions…
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……On the WebOn the WebFHWA Economic Development Studies (incl. I-86) www.fhwa.dot.gov/planning/econdev
Vancouver Freight Gateway Studyhttp://www.edrgroup.com/pages/n32.html
North Country Transportation Studies www.danc.org/ncts
Chicago Rail Freight Studywww.edrgroup.com/pages/n25.html
ARC Guide to Economic Opportunities from Highwayswww.edrgroup.com/pages/n11.html
Library of Economic Impact Studies www.edrgroup.com