Translinked Regional Freight Study

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Translinked Regional Freight Study

  1. 1. Translinked Freight Study December 2011 Prepared for: Detroit Regional Chamber
  2. 2. Translinked Freight StudyTable of Contents1 EXECUTIVE SUMMARY ................................................................................................................................... 1 1.1 TRANSLINKED ................................................................................................................................................... 1 1.2 RECOMMENDATIONS ......................................................................................................................................... 2 1.3 REGIONAL FREIGHT FLOWS ................................................................................................................................. 5 1.4 INDUSTRY TRENDS AND LOCATION COMPARISON .................................................................................................... 92 DETROIT BEA FREIGHT FLOWS ..................................................................................................................... 11 2.1 INTRODUCTION ............................................................................................................................................... 11 2.2 DETROIT BEA TOTAL CARGO............................................................................................................................. 12 2.3 DETROIT BEA TRUCK CARGO ............................................................................................................................ 16 2.3.1 Total ....................................................................................................................................................... 16 2.3.2 Domestic Inbound and Outbound .......................................................................................................... 18 2.3.3 Domestic Internal and Through Cargo ................................................................................................... 22 2.3.4 Imports and Exports ............................................................................................................................... 22 2.3.5 Canada ................................................................................................................................................... 23 2.3.6 Mexico ................................................................................................................................................... 24 2.4 DETROIT BEA RAIL CARGO ............................................................................................................................... 25 2.4.1 Total ....................................................................................................................................................... 25 2.4.2 Domestic Inbound and Outbound .......................................................................................................... 27 2.4.3 Domestic Internal and Through ............................................................................................................. 31 2.4.4 Imports and Exports (excl. NAFTA) ........................................................................................................ 31 2.4.5 Canada ................................................................................................................................................... 32 2.4.6 Mexico ................................................................................................................................................... 33 2.5 OTHER TRANSPORT MODES .............................................................................................................................. 33 2.6 CORRIDOR SPECIFIC FLOWS............................................................................................................................... 33 2.6.1 Halifax Freight Flows ............................................................................................................................. 33 2.6.2 Montreal Freight Flows .......................................................................................................................... 34 2.6.3 U.S. Intermodal Rail Corridors ............................................................................................................... 353 TOLEDO AND WINDSOR FREIGHT FLOWS .................................................................................................... 37 3.1 TOLEDO, OHIO ............................................................................................................................................... 37 3.2 WINDSOR, ONTARIO ....................................................................................................................................... 384 INDUSTRY TREND ANALYSIS ........................................................................................................................ 40 4.1 EXISTING TRANSPORTATION INFRASTRUCTURE AND LOCATION SELECTION FACTORS ..................................................... 40 4.1.1 Logistics and Transportation Infrastructure Summary .......................................................................... 40 4.1.2 Rail ......................................................................................................................................................... 41 4.1.3 Highways ............................................................................................................................................... 43 4.1.4 Ocean Gateways .................................................................................................................................... 44 4.1.5 Airports .................................................................................................................................................. 45 4.1.6 Toledo, OH ............................................................................................................................................. 46 4.1.7 Windsor, ON .......................................................................................................................................... 47 4.2 INLAND STRATEGIES AND NETWORK OPTIMIZATION............................................................................................... 48 4.3 REAL ESTATE INFRASTRUCTURE .......................................................................................................................... 51 4.4 LABOR AND DEMOGRAPHIC PROFILE ................................................................................................................... 52 4.5 BUSINESS AND TAX ENVIRONMENT..................................................................................................................... 53 4.6 FOREIGN TRADE ZONES .................................................................................................................................... 53 4.7 TRENDS IN TRANSPORTATION AND THE NEAR-TERM OUTLOOK ................................................................................ 54 i | TranSystems
  3. 3. Translinked Freight Study 4.7.1 Trucking Industry ................................................................................................................................... 54 4.7.2 Trends in U.S. Containerized Trade ........................................................................................................ 57 4.7.3 Trends in Intermodal Rail ....................................................................................................................... 62 4.8 REPRESENTATIVE SERVICE PROVIDERS AND SHIPPERS ............................................................................................. 675 DETROIT BEA FREIGHT FORECAST ................................................................................................................ 70 5.1 INTRODUCTION ............................................................................................................................................... 70 5.2 METHODOLOGY .............................................................................................................................................. 70 5.3 ECONOMIC REVIEW AND OUTLOOK .................................................................................................................... 71 5.4 FREIGHT FLOW FORECAST................................................................................................................................. 736 COMPARATIVE LOCATION ANALYSIS ........................................................................................................... 77 6.1 INTRODUCTION ............................................................................................................................................... 77 6.2 REGIONAL TRUCK/RAIL LOGISTICS COMPARISON................................................................................................... 77 6.2.1 Transit Time Hurdle ............................................................................................................................... 78 6.2.2 Total Landed Cost Comparison .............................................................................................................. 78 6.2.3 Rail Transits ........................................................................................................................................... 79 6.2.4 Transportation Cost Indication by Gateway .......................................................................................... 79 6.2.5 Trucking Transits and Market Coverage ................................................................................................ 80 6.3 LOCATION PROFILES – COLUMBUS AND CHICAGO.................................................................................................. 85 6.3.1 Columbus, OH ........................................................................................................................................ 85 6.3.2 Chicago, IL.............................................................................................................................................. 86 6.4 REGIONAL COMPARISON SUMMARY ................................................................................................................... 88List of TablesTable 1-1: Selected Regional Freight Flows in 2009 .................................................................................................................................................5Table 1-2: Inbound and Outbound Freight Forecast for 2020 – Base, Low and High ....................................................................................8Table 2-1: Warehouse-able Commodities ............................................................................................................................................................... 14Table 4-1: Detroit Logistics Summary....................................................................................................................................................................... 40Table 4-2: West Coast Transit Time Comparison (Transit Days): Shanghai to Detroit .......................................................................... 45Table 4-3: East Coast Transit Time Comparison (Transit Days): Hong Kong and Rotterdam to Detroit .......................................... 45Table 4-4: Detroit MSA Warehouse Vacancy and Lease Rates, Third Quarter 2011 ................................................................................ 51Table 4-5: Detroit-Warren-Livonia, MI Employment by Industry Percent Changes between 2001 and 2011 .................................... 52Table 4-6: Tax Foundation Business Tax Climate Rank for Selected States ................................................................................................. 53Table 4-7: Sample of Logistics Providers in the Study Region – Located in Michigan ................................................................................. 67Table 4-8: Sample of Logistics Providers in the Study Region – Located in Ohio and Ontario ............................................................... 68Table 4-9: Sample of Major Shippers in the Study Region ................................................................................................................................... 69Table 5-1: Real Gross Domestic Product by MSA within the Detroit BEA ................................................................................................... 71Table 5-2: Economic and Industry Factors Related to Goods Movement in the East North Central Region and the Detroit BEA:Ten-Year Annual Growth Rates, 2010-2020 .......................................................................................................................................................... 72Table 5-3: Forecast of Inbound and Outbound Freight Flows ........................................................................................................................... 74Table 5-4: Macro Forecast Growth Rates by Transport Mode ......................................................................................................................... 75Table 5-5: Inbound and Outbound Freight Forecast for 2020 – Base, Low and High ................................................................................. 76Table 6-1: Estimated Rail Transits in Hours from Key Port Gateways to Selected Midwest Points ...................................................... 79Table 6-2: Translinked Study Area Cost* Evaluation by North American Port Gateway ......................................................................... 80Table 6-3: U.S. and Canada Population within 10-Hour Truck Drive-Time of Detroit and Selected Cities ........................................ 81Table 6-4: Truck Transit Time from Detroit and Selected U.S. Distribution Hubs to Major Cities ...................................................... 83Table 6-5: Estimated Truckload Costs from Detroit and Selected U.S. Distribution Hubs to Major Cities ........................................ 84Table 6-6: Columbus Regional Logistics Summary ............................................................................................................................................... 85Table 6-7: Chicago Regional Logistics Summary ................................................................................................................................................... 86Table 6-8: Detroit, Chicago and Columbus Summary Table............................................................................................................................. 88List of FiguresFigure 1-1: Map of Translinked Region ........................................................................................................................................................................1 ii | TranSystems
  4. 4. Translinked Freight StudyFigure 1-2: Detroit BEA Cargo in 2009 by Transport Mode.................................................................................................................................6Figure 1-3: Detroit BEA Cargo in 2009 by Trade Flow ..........................................................................................................................................7Figure 1-4: Detroit BEA Cargo Tons in 2009, Total and Warehouse-able .......................................................................................................7Figure 1-5: 10-Hour Truck Drive-Time Area Comparison: Detroit, MI, Chicago, IL, Columbus, OH, and Harrisburg, PA ........... 10Figure 2-1: Map of Detroit BEA .................................................................................................................................................................................. 11Figure 2-2: Detroit BEA Cargo in 2009 by Transport Mode.............................................................................................................................. 12Figure 2-3: Detroit BEA Cargo in 2009 by Trade Flow ....................................................................................................................................... 13Figure 2-4: Value per Cargo Tons .............................................................................................................................................................................. 14Figure 2-5: Detroit BEA Cargo Tons in 2009, Total and Warehouse-able .................................................................................................... 15Figure 2-6: Detroit BEA Truck Cargo by Trade Flow in 2009........................................................................................................................... 16Figure 2-7: Detroit BEA Truck Cargo in 2009 – Top Ten Commodity Groups .......................................................................................... 17Figure 2-8: Detroit BEA Inbound and Outbound Truck Cargo in 2009 – Top 20 Commodity Groups ............................................... 18Figure 2-9: Detroit BEA Inbound and Outbound Truck Cargo in 2009 – Top 20 Freight Lanes ............................................................ 19Figure 2-10: Domestic Inbound Truck Freight ....................................................................................................................................................... 20Figure 2-11: Domestic Outbound Truck Freight ................................................................................................................................................... 21Figure 2-12: Detroit BEA Import Truck Cargo in 2009....................................................................................................................................... 22Figure 2-13: Detroit BEA Export Truck Cargo in 2009....................................................................................................................................... 23Figure 2-14: Detroit BEA - Canada Truck Cargo in 2009 ................................................................................................................................... 23Figure 2-15: Detroit BEA - Mexico Truck Cargo in 2009 ................................................................................................................................... 24Figure 2-16: Detroit BEA Rail Cargo by Trade Flow in 2009............................................................................................................................. 25Figure 2-17: Detroit BEA Rail Cargo in 2009 – Top Ten Commodity Groups ............................................................................................ 26Figure 2-18: Detroit BEA Inbound and Outbound Rail Cargo in 2009 – Top 15 Commodity Groups ................................................. 27Figure 2-19: Detroit BEA Inbound and Outbound Rail Cargo in 2009 – Top Freight Lanes .................................................................... 28Figure 2-20: Domestic Inbound Rail Freight ............................................................................................................................................................ 29Figure 2-21: Domestic Outbound Rail Freight........................................................................................................................................................ 30Figure 2-22: Detroit BEA Import Rail Cargo in 2009 ........................................................................................................................................... 31Figure 2-23: Detroit BEA Export Rail Cargo in 2009 ........................................................................................................................................... 31Figure 2-24: Detroit BEA - Canada Rail Cargo in 2009 ....................................................................................................................................... 32Figure 2-25: Detroit BEA - Mexico Rail Cargo in 2009 ....................................................................................................................................... 33Figure 2-26: Detroit BEA – Cargo Flows from the Halifax Area in 2009 ....................................................................................................... 34Figure 2-27: Detroit BEA – Cargo Flows with the Montreal CMA in 2009................................................................................................... 35Figure 2-28: Detroit BEA - Top-10 U.S. Intermodal Rail Lanes by Cargo Tons in 2009 ............................................................................ 36Figure 3-1: Port of Toledo Cargo ............................................................................................................................................................................... 37Figure 3-2: Port of Toledo Commodity Mix ........................................................................................................................................................... 37Figure 3-3: Detroit BEA Domestic Freight Flows with Toledo BEA, 2009 .................................................................................................... 38Figure 3-4: Windsor, Ontario CMA Freight Flows in 2009 ................................................................................................................................ 39Figure 3-5: London, Ontario CMA Freight Flows in 2009 .................................................................................................................................. 39Figure 4-1: Class I Railroad Map with Container Ports........................................................................................................................................ 42Figure 4-2: Regional Highway Map ............................................................................................................................................................................. 43Figure 4-3: Detroit Truck Border Crossings .......................................................................................................................................................... 44Figure 4-4: Current Rail System in Windsor ........................................................................................................................................................... 47Figure 4-5: Comparison of Container Sizes............................................................................................................................................................. 48Figure 4-6: Example of Distribution Center Network ......................................................................................................................................... 49Figure 4-7: Example of Distribution Center and Cross-Dock Network......................................................................................................... 50Figure 4-8: Detroit-Warren-Livonia, MI Number of Employees by Industry, August Year over Year, 2001 – 2011 (000) ............ 52Figure 4-9: Indexes of Trucking Volume (TL and LTL), U.S. Industrial Production and Real GDP: 1995-2010 (1995=100) ........... 54Figure 4-10: Indexes of Real Revenue per Load for Truckload Freight versus Real Diesel Fuel Prices: 1995-2010 (1995=100) ... 55Figure 4-11: Indexes of Truckload Loads by Length-of-Haul Segment: 1996-2010 (1996=100) .............................................................. 56Figure 4-12: Growth of U.S. Containerized Import and Export Loads, 1995-2010 ..................................................................................... 58Figure 4-13: Far East as a Share of U.S. Containerized Imports and Exports, 1995-2010 ......................................................................... 59Figure 4-14: Trends in the Composition of U.S. Containerized Imports and Exports, 1995-2010 ......................................................... 60Figure 4-15: Annual North America Intermodal Rail Volume, 2000 to 2010 ................................................................................................ 62Figure 4-16: Growth of North America Intermodal Service by Equipment Type, 2000 to 2010 ............................................................ 63Figure 4-17: Quarterly Average Intermodal Train Speeds for North American Class I Railroads, 2000-2010 ................................... 63Figure 4-18: Midwest Inbound Intermodal Volume from West Coast and Share, 2000 to 2010 ............................................................ 65Figure 4-19: Detroit BEA - Top-10 U.S. Intermodal Rail Lanes by Cargo Tons in 2009 ............................................................................ 66Figure 5-1: Forecast of Detroit BEA Inbound and Outbound Freight Flows – Warehouse-able Commodities ................................. 73Figure 6-1: 10-Hour Truck Drive-Time Area Comparison: Detroit, MI, Chicago, IL, Columbus, OH, and Harrisburg, PA ........... 82 iii | TranSystems
  5. 5. Translinked Freight Study Executive Summary1 EXECUTIVE SUMMARY1.1 TranslinkedThe Detroit Regional Chamber is one of the largest chambers of commerce in the country. The Chamberseeks to power the economy of southeast Michigan through economic development programs, advocacy,strategic partnerships and valuable member benefits. One key initiative of the Detroit Regional Chamber’sEconomic Development activities is Translinked.The goal of Translinked is to create an industry cluster of excellence around transportation, distribution andlogistics in the region comprising southeast Michigan, northwest Ohio and southwest Ontario. TheTranslinked strategy envisions the mobilization of public, private and academic resources around aconsensus on the physical, financial and institutional infrastructure necessary to create this cluster. Thisinitiative seeks to attract more freight, perform value-added service and become a key intermodal supplyhub. The overall goal of Translinked is to create an efficient and cost-effective first-tier multimodaltransportation and logistics hub in southeast Michigan, northwest Ohio and southwest Ontario. Translinkedis supported by the Michigan Economic Development Corporation (MEDC), the New Economy Initiative(NEI), and the Detroit Regional Chamber.The Translinked region (Figure 1-1) includes major freight centers, including Detroit, Ann Arbor, Lansing,Flint and Port Huron in Michigan, Toledo in Ohio and Windsor and Sarnia in Ontario, Canada. The regionencompasses major manufacturingactivity (e.g. the automotive industry)and is situated on the principal border Figure 1-1: Map of Translinked Regioncrossings for overland trade betweenthe United States and Canada. Acomprehensive set of freightinfrastructure supports regionaleconomic activity, including rail androad border crossings, airports, marineports, rail yards, and interstate highwaysand rail corridors. The region is alsoconnected by rail and highway to majorU.S. and Canadian international seaports, including New York/New Jersey,Halifax, Montreal and Norfolk on theEast Coast.The Translinked Freight Study provides,subject to the availability of data onregional freight movements, a data-driven analysis of existing regionalfreight movements, an assessment ofkey freight industry trends, and makesrecommendations on how to furtherdevelop the Translinked region. Source: Detroit Regional Chamber 1 | TranSystems
  6. 6. Translinked Freight Study Executive Summary1.2 RecommendationsThe evaluation of freight flows and industry trends drive the following recommendations for futuredevelopment of the Translinked initiative: Establish a Translinked Commercial Marketing Initiative Involve the Private Sector, Remove Barriers that Slow Down Decision Making Remove Variability from the Border Crossing Process Include Rail Facilities and Third Party Logistics Providers (3PLs) that Reduce Transportation Costs, and Increase Flexibility Marketing Initiative and Freight CorridorsThe recommendations and next steps are discussed below.Establish a Translinked Commercial Marketing InitiativeTranslinked opportunities are with companies that have specific distribution needs, such as a highconcentration of customers in Northern Michigan, over to Toronto, and including the US Midwest.Companies that require fastest ocean transits from China or Europe, especially for high value goods, ormanufacturers that receive materials used in production from nearby sources are potential candidates. Next Steps: Develop Translinked Marketing Plan TranSystems recommends a detailed, company by company analysis to identify opportunities based on the specific advantages of the Translinked region. Develop a list of potential Translinked customers. Identifying and selling value will require detailed knowledge of the customer’s business, particularly its supply chain; and facts about the customer’s inventory and supply chain strategy. Carefully identify (segment) beneficial cargo owners (BCO) with high costs, complicated supply chains, or poor inventory performance. Conduct private sector outreach to gather input. Develop supply chain straw-men using various distribution strategies and present them to shippers to assess the viability of Translinked as a supply chain hub. Demonstrate how a Translinked location reduces lowest landed costs. Present regional advantages, such as the CSX intermodal facility in North Baltimore, OH to private sector logistics managers. Once strategies are validated, market regional advantages in industry publications, such as DC Velocity, Inbound Logistics, Journal of Commerce, and American Shipper. The KC (Kansas City) Smartport initiative is an excellent model for marketing strategies that may be applicable to the Translinked initiative.Involve the Private Sector, Remove Barriers that Slow Down Decision MakingTime is of the essence. Comments made during interviews as part of this study suggest there is a perceptionthat the overall direction and ownership of Translinked is unclear, and the initiative lacks sufficientinvolvement from commercial interests. Commercial participation will be necessary to lend support and 2 | TranSystems
  7. 7. Translinked Freight Study Executive Summarycredibility to the project. It should be noted that recent improvements in Ohio, such as CSX’s NorthwestOhio Intermodal Terminal at North Baltimore, Norfolk Sothern’s Heartland Corridor Initiative servingColumbus, and BNSF’s Chicago rail terminal adjacent to the CenterPoint Intermodal Park have been noticedin the industry. Successes in the Translinked region itself, such as improvements at the Port of Toledo, havebeen attributed to public/private cooperation and agreed priorities. Barriers impeding Translinked progressshould be identified, and addressed. Slow-moving initiatives will lose out to locations that are established,and proven, and that have active engagement with the private sector. Next Steps: Identify and Remove Barriers to Progress Focus and prioritize opportunities based on strengths identified in the Marketing Plan, and gather private sector support as quickly as possible. Solicit active and ongoing participation on the Translinked committee from companies such as railroads and third party logistics companies to provide a sense of what is commercially viable. The CN Railroad for example actively participated in the design, and invested $25 million in the new West Coast ocean terminal at Prince Rupert, BC - private investment will signal commercial viability. The Detroit Intermodal Freight Terminal (DIFT) may be another example of a successful transportation related public/private development. Public sector involvement and coordination is crucial, but all parties should adhere to commercially based priorities. A failure to agree on priorities may signal an inability to move the project forward, and a review of Translinked overall goals and makeup is advised.Remove Variability from the Border Crossing ProcessSupply chain managers work to eliminate events that introduce variability into supply chains. The Translinkedregion opportunities will be aided by addressing perceptions about the unpredictability of border crossings.The inclusion of the Toronto area population of 5 million within a distribution range served by theTranslinked region will elevate the effectiveness of the region as a transportation hub. Therefore, addressingperceptions about unpredictable crossing delays is critical. Next Steps: Assess and Manage Border Crossing Perception As part of the development of the Translinked Sales/Marketing plan, gather border crossing information, including an assessment of perceived vs. real barriers, expected delays, and suggestions for improvement. Based on this input, develop strategies to correct misconceptions about crossing delays, or work with US and Canadian customs agencies to develop programs that reduce variability in border wait times. An evaluation of the effectiveness of the Fast Past program, which allows truckers to us the “FAST” lane, and reduces the amount of paperwork, should be included in the analysis. 3 | TranSystems
  8. 8. Translinked Freight Study Executive SummaryInclude Rail Facilities and Third Party Logistics Providers (3PLs) that ReduceTransportation Costs, and Increase FlexibilityDistribution centers (DC) on-site at rail terminals, including multiple rail carriers, will reduce truck drayagecosts. Include railroads and shippers in terminal location and design discussions. The presence of 3PLservices, such as warehouse and distribution services, will enable shippers to introduce flexibility to theirsupply chains and will provide distribution options in the Translinked region without requiring shippers tocommit capital to an owned facility. Next Steps: Confirm importance of the Detroit Intermodal Freight Terminal (DIFT) during the development of the Translinked Marketing and Sales Plan. Revitalize and develop a sense of urgency around the DIFT rail project if potential users are attracted to this kind of facility. Explore willingness of large DCs, trucking companies; 3PL’s to locate near new DIFT facility, and zone appropriately if needed to support logistics facilities.Marketing Initiative and Freight CorridorsThe Translinked region is strategically located on several major trade corridors, notably cross-border withCanada. In addition, the region’s consumers and industry are served by several important port gateways inthe U.S. (e.g. ports of New York/New Jersey, Norfolk and Los Angeles/Long Beach) and Canada (the portsof Halifax, Montreal and Prince Rupert). In developing the Translinked marketing initiative discussed above,focus should be placed on companies that could benefit from the following freight corridors: International trade via: − Canadian ports of Halifax, Montreal and Prince Rupert. − U.S. Northeast ports, notably New York/New Jersey, Norfolk, and Baltimore. Investments in rail infrastructure by CSX and NS are making these gateways even more accessible for the Translinked region. − U.S. West Coast ports, which are the principal gateways for U.S. trade with the Far East. Highway and rail corridors serving major consumption markets in the U.S. Cross-border highway and rail corridors with major consumption markets in Canada, notably markets in Ontario.The marketing initiative should also incorporate testing the perceived value of the different North AmericanGateways, such as the Prince Rupert Gateway, with the fastest transit from China, or the Halifax Gateway,and evaluate shipper preferences of North American gateways into the study area. The market strategyinitiative should include shippers who transport the fastest growing commodities. For example, Machineryand Parts Manufacturing, and Electronics Manufacturing have projected ten-year annual growth rates of 4.4percent and 5.0 percent respectively. Keep in mind that these growth rates may reflect a recovery fromsteep declines experienced during the economic downturn; however, logistics service opportunities mayemerge as the recovery continues. 4 | TranSystems
  9. 9. Translinked Freight Study Executive Summary1.3 Regional Freight FlowsRegional economic activity generates inbound, outbound and internal freight flows. The Translinked regionalso sees freight moving through the region between Canada and the rest of the U.S. An overview ofselected regional freight flows in 2009, the latest year for Transearch Freight Data1, is presented in Table1-1. The main characteristics of freight flows are discussed below. Table 1-1: Selected Regional Freight Flows in 2009 Tons by Tons by Tons by Tons by Other Total Total Tons Truck Rail Water Modes Value Detroit BEA Freight Flows in 2009 (Million Tons and Billion $) Total 286.60 206.07 52.81 26.60 1.12 $413.5 1 Domestic 212.00 160.42 30.85 20.69 0.04 $248.8 Inbound 107.54 66.10 22.44 18.99 0.02 $107.1 Outbound 51.30 42.00 8.20 1.07 0.02 $101.7 Internal 47.07 46.22 0.21 0.63 0.00 $26.1 Through 6.09 6.09 0.00 0.00 0.00 $13.9 Canada 54.02 34.09 18.85 0.00 1.08 $129.7 Inbound 5.97 3.37 1.95 0.00 0.65 $18.3 Outbound 3.16 2.40 0.39 0.00 0.37 $10.7 Through 44.89 28.32 16.51 0.00 0.06 $100.7 Mexico 2.64 1.12 1.52 0.00 0.00 $14.0 Inbound 1.63 0.56 1.07 0.00 0.00 $10.1 Outbound 0.94 0.49 0.45 0.00 0.00 $3.6 Through 0.08 0.07 0.01 0.00 0.00 $0.2 Import & Export 2 17.93 10.44 1.59 5.91 0.00 $21.1 Detroit BEA – Toledo BEA Freight Flows in 2009 (Million Tons and Billion $) Total 3 15.81 14.57 0.35 0.89 0.00 $6.95 Inbound 10.84 9.82 0.14 0.88 0.00 $4.47 Outbound 4.97 4.74 0.21 0.01 0.00 $2.47 Detroit BEA – Windsor CMA Freight Flows in 2009 (Million Tons and Billion $) 4 Total 1.42 1.16 0.19 0.00 0.07 $4.75 Inbound 0.25 0.19 0.06 0.00 0.00 $1.28 Outbound 0.18 0.13 0.00 0.00 0.05 $0.39 Through 0.99 0.83 0.13 0.00 0.02 $3.08 (1) Domestic flows include some international cargo that moves as “domestic” freight – e.g. overseas imports moving in domestic 53-foot containers from the U.S. discharge port to the Detroit BEA. (2) Overseas import and export cargo that moves intact between U.S. ports and the Detroit BEA. (3) Freight moving between the Detroit BEA and the Toledo BEA. (4) Freight moving between the Detroit BEA and the Windsor CMA, and freight moving through the Detroit BEA between the Windsor CMA and the rest of the U.S. Source: IHS Global Insight Transearch Data1 This Study includes content supplied by IHS Global Insight (USA), Inc; Copyright 2011 IHS Global Insight (USA), Inc. 5 | TranSystems
  10. 10. Translinked Freight Study Executive SummaryDetroit BEA Freight FlowsThe Detroit-Warren-Flint Business Economic Area Figure 1-2: Detroit BEA Cargo in 2009 by(Detroit BEA) covers the cities of Detroit, Flint and Transport ModeWarren, and surrounding areas. The Detroit BEAhad total estimated cargo flows amounting to 287million tons in 2009 with an estimated value of$414 billion. Total cargo comprises severaldifferent transport modes – truck, rail, water (viathe Great Lakes), air and other – and includes alltrade flows, domestic and international, inbound,outbound, internal (movements within the DetroitBEA) and through (not stopping in the DetroitBEA).Truck is the dominant mode with 72 percent ofcargo volume and 81 percent of cargo value, thelarger share of value reflecting the higher-valuecommodities that move via truck. Rail handles bothlower-value and higher-value commodities, and itaccounts for 18 percent of both volume and value.The water mode accounts for 9 percent of tons butless than one percent of value due to the low-value Note: Includes domestic and international, and all directionsbulk commodities shipped by water. The highest – inbound, outbound, internal and throughvalue freight is shipped by air. Source: Derived from IHS Global Insight Transearch DataTotal cargo is spread across different directionsand trades (Figure 1-3). Domestic cargo accounts for 74 percent of total tons and 60 percent of value.Domestic cargo includes some international cargo that moves as domestic freight to or from U.S. ports (e.g.New York/New Jersey). International trade related to Canada accounted for 19 percent of tons and 31percent of value, while international trade with Mexico was one percent of tons and 3 percent of value.Import and Export trade that moves intact to and from U.S. ports accounted for 6 percent of tons and 5percent of value.Inbound and outbound cargo amounted to 183 million tons in 2009 with an estimated value of $270 billion.These flows are driven by industry and consumption, and generate the principal demand for warehousingand logistics facilities. The largest directional flow is inbound to the Detroit BEA.The region also has a large volume of internal cargo movement (18 percent of total tons and 7 percent ofvalue), a significant share of which is truck shipments to and from warehouses within the region and drayageof containers to and from intermodal rail yards. A large amount of cargo also moves through the DetroitBEA, notably between Canada and other regions of the U.S., and is handled by the border crossing points inthe Detroit BEA. 6 | TranSystems
  11. 11. Translinked Freight Study Executive Summary Figure 1-3: Detroit BEA Cargo in 2009 by Trade Flow Source: Derived from IHS Global Insight Transearch DataWhen evaluating the region’s cargo, it is helpful tofocus on commodities that are more suited to Figure 1-4: Detroit BEA Cargo Tons in 2009,added-value logistics services or undergo some form Total and Warehouse-ableof manufacturing process. Such commodities will beof primary interest to the development of industryand logistics services. The broadly defined“warehouse-able” commodities are those with arelatively high value per metric ton and/orcommodities that are processed (e.g. food products)as opposed to raw materials (e.g. grain). Thesecommodities are more likely to require added-valuelogistics services.Warehouse-able cargo was an estimated 141 milliontons in 2009, 49 percent of total Detroit BEA cargo.Warehouse-able cargo accounted for an estimated90 percent of total cargo value, which reflects thehigher value nature of warehouse-able commodities(e.g. consumer products). These commoditiesaccounted for 42 percent of inbound tons, and their Source: Derived from IHS Global Insight Transearch Datashare was highest in the cross-border inbound trade– 64 percent of tons from Canada and 99 percent oftons from Mexico – and compared to 41 percent of domestic inbound tons. Warehouse-able commoditiesaccounted for 66 percent of total outbound tons. Penetration by trade was – domestic outbound 68 percentof domestic tons, shipments to Canada 48 percent and shipments to Mexico 87 percent. 7 | TranSystems
  12. 12. Translinked Freight Study Executive SummaryDetroit BEA Freight Flow ForecastThe forecast of inbound and outbound freight (warehouse-able) commodities is presented in Table 1-2. TheBase projections of cargo flows driven by assumptions related to regional, national and internationaleconomic activity, and relationships between industry inputs and outputs. Total inbound and outboundfreight is projected to have increased from 89.9 million tons in 2009 to 97.8 million tons in 2010, driven byrecovery from the recession and growth of industries in the region. Total inbound and outbound freight isprojected to increase to 126.0 million tons in 2020, based on domestic economic growth and the expansionof cross-border trade with Mexico and Canada, and growth of trade with overseas markets. The projected10-year (2010 to 2020) compound annual growth rate (CAGR) is 2.6 percent. Table 1-2: Inbound and Outbound Freight Forecast for 2020 – Base, Low and High Inbound Freight (Warehouse-able Commodities) 2020 Tons CAGR 2010 to 2020 Trade 2009 Tons 2010 Tons Base Low High Base Low High Domestic 44,334,660 47,678,414 59,970,374 57,318,605 63,775,639 2.3% 1.9% 3.0% Canada 3,835,424 4,232,502 5,513,774 5,127,613 5,798,233 2.7% 1.9% 3.2% Mexico 1,613,233 1,761,005 2,981,832 2,708,501 3,145,764 5.4% 4.4% 6.0% Import 1,205,197 1,343,248 2,028,841 1,859,298 2,273,105 4.2% 3.3% 5.4% Grand Total 50,988,514 55,015,169 70,494,821 67,014,016 74,992,742 2.5% 2.0% 3.1% Outbound Freight (Warehouse-able Commodities) 2020 Tons CAGR 2010 to 2020 Trade 2009 Tons 2010 Tons Base Low High Base Low High Domestic 34,989,373 38,422,157 49,083,371 44,989,601 51,752,543 2.5% 1.6% 3.0% Canada 1,512,627 1,665,247 2,218,630 2,059,365 2,308,990 2.9% 2.1% 3.3% Mexico 812,665 927,945 1,451,046 1,369,738 1,658,503 4.6% 4.0% 6.0% Export 1,581,080 1,796,395 2,756,368 2,495,304 3,036,918 4.4% 3.3% 5.4% Grand Total 38,895,745 42,811,744 55,509,415 50,914,008 58,756,955 2.6% 1.7% 3.2% Inbound & Outbound Freight (Warehouse-able Commodities) 2020 Tons CAGR 2010 to 2020 Trade 2009 Tons 2010 Tons Base Low High Base Low High Domestic 79,324,033 86,100,571 109,053,745 102,308,206 115,528,183 2.4% 1.7% 3.0% Canada 5,348,051 5,897,749 7,732,404 7,186,977 8,107,223 2.7% 2.0% 3.2% Mexico 2,425,898 2,688,950 4,432,877 4,078,239 4,804,267 5.1% 4.3% 6.0% Import & Export 2,786,277 3,139,643 4,785,209 4,354,602 5,310,023 4.3% 3.3% 5.4% Grand Total 89,884,258 97,826,912 126,004,235 117,928,024 133,749,697 2.6% 1.9% 3.2% Source: TranSystems Forecasts and IHS Global Insight 2009 data.Low and high case projections are also presented in Table 1-2. The basis for these alternative projections isthat the principal driver of freight flows is economic activity, represented by indicators such as disposableincome and industrial production. In addition, housing-sensitive commodities are subject to moreuncertainties going forward due to uncertainty as to the timing of recovery in regional housing markets. Ingeneral, the sensitivities for non-housing related commodities (e.g. transportation equipment) are -0.5to+0.5 percent per year. Secondary traffic is assumed to be 25 percent housing-related and the sensitivities are 8 | TranSystems
  13. 13. Translinked Freight Study Executive Summary-0.2 to +1.5 percent per year. The growth sensitivities for international flows are -1.5 to +1.5 percent peryear. A stronger recovery in regional, national and international economic activity would be expected todrive a healthy growth of international trade. Total inbound and outbound shipments of warehouse-ablecommodities are projected to have 10-year compound annual growth rates of 1.9 percent under the LowCase and 3.2 percent under the High Case.The projections indicate that truck shipments will grow at a slightly faster rate than shipments by rail. Thisresult is driven by several factors – (1) the macro nature of the forecast models, with their underlyingassumptions on industry input and output relationships, and fixed modal shares for individual commodities,(2) the large amount of freight moving between the region and truck friendly origins and destinations in theEast North Central region, and (3) the current transportation mode distribution. However, the macroforecast models do not take into account significant transportation industry factors that are expected toaccelerate the growth of rail usage. The trucking industry is faced with several challenges that areencouraging shippers to expand the use of rail in their supply chains. These factors include fuel priceincreases, favoring rail over highway transport, the cost of recruiting and maintaining truck drivers,investments by railroads in intermodal rail hubs tied to logistics parks, and increased marketing andattractive pricing by railroads of shorter haul intermodal rail services. For these reasons, it is likely that theuse of rail in the supply chain strategies of shippers will expand in the future.Detroit BEA – Toledo BEAIn 2009, 15.0 million tons of domestic freight moved between the Detroit BEA and the Toledo BEA, 10.4million tons inbound from the Detroit BEA and 4.6 million tons outbound from the Detroit BEA. Truck isthe dominant mode accounting for 92 percent of inbound freight and 96 percent of outbound freight.Detroit BEA – Windsor CMAThe Windsor area has a diversified economy with a strong presence in the automotive sector, agriculture,and food products, and emerging sectors that include high tech manufacturing. A total of 1.4 million tons offreight moves to and from the Detroit BEA, and to and from other regions of the U.S through the DetroitBEA. Truck is the dominant mode of transport, accounting for 88 percent of freight shipped to the WindsorCMA and 72 percent of the tons shipped from the Windsor CMA. The respective shares for rail were 5percent and 28 percent.1.4 Industry Trends and Location ComparisonLogistics managers are continuously evaluating their logistics networks to squeeze excess transportationexpenses and other costs out of their supply chains. The availability of all transportation modes is essentialin order to enable logistics managers to have the flexibility to choose the mode that best suits shipmentneeds. Lowest-cost transportation options, such as rail, are selected provided that service is available, andtransit time and reliability meet service level requirements. Trucking costs are the largest portion of thesupply chain expense. Locating DCs in high-density customer/supplier areas reduces trucking expensesenough to more than compensate for lower ocean and rail costs to competing regions. Because of this,supply chain strategies that reduce trucking as much as possible have been a major goal of supply chainmanagers. Warehouse locations are chosen based on the cost of the facility, and their proximity tocustomers and suppliers, thereby reducing trucking costs. Labor, green initiatives, government incentives,etc. are considered after transportation service and rate level requirements are met, and theseconsiderations typically influence a specific site location among competing sites that meet transportationrequirements. 9 | TranSystems
  14. 14. Translinked Freight Study Executive SummaryThe Translinked region performs well under a variety of criteria used by shippers and manufacturers toselect locations, including transportation infrastructure (rail and highway and airports), access to oceangateways for international trade, and the availability of warehousing and distribution facilities.The Translinked region must compete against two regional hubs – Columbus, OH, and Chicago, IL – thatare well established and in a strong position to compete for DC operations in the Midwest. Columbus has ahigher U.S. and Canadian population reach, and Chicago has superior rail and air cargo services, as well as alarge Midwest distribution reach. Both of these locations have competitive labor and industrial real estatecosts as well. Translinked region opportunities are with companies with specific distribution needs, such as ahigh concentration of customers in Northern Michigan, over to Toronto, and including parts of the U.S.Midwest. Companies that require fastest ocean transits from China or Europe, or manufacturers thatreceive materials used in production from nearby sources are other potential candidates. Figure 1-5: 10-Hour Truck Drive-Time Area Comparison: Detroit, MI, Chicago, IL, Columbus, OH, and Harrisburg, PA Source: TranSystems 10 | TranSystems
  15. 15. Translinked Freight Study Existing Freight Flows2 DETROIT BEA FREIGHT FLOWS2.1 IntroductionThe first step in the evaluation of freight flows is to address the Detroit BEA2, which encompasses the mainTranslinked centers of Detroit, Flint, Ann Arbor, Lansing and Port Huron. As shown in Figure 2-1, theDetroit BEA covers the eastern portion Michigan and the major freight corridors through SoutheastMichigan. Figure 2-1: Map of Detroit BEA Source: TranSystemsThe primary source for freight flows related to the Detroit BEA is the Transearch Database from IHSGlobal Insight3. This database provides statistics on domestic freight flows, and cross-border freight flowswith Canada and Mexico. The latest year available for this study was 2009, which was a depressed year for2 BEAs are designated by the Department of Commerce and each Economic Area represents a major economic center3 This Study includes content supplied by IHS Global Insight (USA), Inc; Copyright 2011 IHS Global Insight (USA), Inc. 11 | TranSystems
  16. 16. Translinked Freight Study Existing Freight Flowseconomic activity and freight activity. However, the database is still appropriate for providing a profile offreight flows related to the Detroit BEA. This database is supplemented by statistics on U.S. containerizedtrade from JOC Piers and data on cross-border flows from the Bureau of Transportation Statistics.2.2 Detroit BEA Total CargoThe Detroit-Warren-Flint Business Economic Area (Detroit BEA) covers the cities of Detroit, Flint andWarren, and surrounding areas. It had a population of 6.9 million in 2009, with Total Personal Income (TPI)of $247 billion, and per capita income of $35,713.4 The Detroit BEA ranked 10th by population, 12th by TPIand 75th by per capita income out of the country’s 179 BEAs tracked by the Bureau of Economic Analysis.The Detroit BEA borders five other BEAs5 that had a combined population of 4.2 million in 2009, generatingTPI of $134 billion, and per capita income of $31,738.The Detroit BEA had total estimated cargo flows Figure 2-2: Detroit BEA Cargo in 2009 byamounting to 287 million tons in 2009 with an Transport Modeestimated value of $414 billion. Total cargocomprises several different transport modes(Figure 2-2) – truck, rail, water (via the GreatLakes), air and other – and includes all trade flows,domestic and international, inbound, outbound,internal (movements within the Detroit BEA) andthrough (not stopping in the Detroit BEA).Truck is the dominant mode with 72 percent ofcargo volume and 81 percent of cargo value, thelarger share of value reflecting the higher-valuecommodities that move via truck. Rail handles bothlower-value and higher-value commodities, and itaccounts for 18 percent of both volume and value.The water mode accounts for 9 percent of tons butless than one percent of value due to the low-valuebulk commodities (e.g. iron ore) shipped by water.The highest value freight is shipped by air, but aironly handles 0.03 percent of total tons and 0.35 Note: Includes domestic and international, and all directionspercent of total value. In 2009, the values per cargo – inbound, outbound, internal and throughton by transport mode were $1,616 for truck, Source: Derived from IHS Global Insight Transearch Data$1,456 for rail, $63 for water, and $17,445 for air.As shown in Figure 2-3, total cargo is spread across different directions and trades. Domestic cargoaccounts for 74 percent of total tons and 60 percent of value. Domestic cargo includes some internationalcargo that moves as domestic freight to or from U.S. ports (e.g. New York/New Jersey). For example, animport will be “converted” to domestic freight when it, for example, enters an import distribution center(IDC) and then departs the IDC in domestic equipment for the Detroit BEA.International trade related to Canada accounted for 19 percent of tons and 31 percent of value, whileinternational trade with Mexico was 1 percent of tons and 3 percent of value. Import and Export trade that4 Data is for 2009 from the Bureau of Economic Analysis5 Alpena, Traverses City, Grand Rapids-Muskegon-Holland, Fort Wayne-Huntington-Auburn, and Toledo-Fremont 12 | TranSystems
  17. 17. Translinked Freight Study Existing Freight Flowsmoves intact to and from U.S. ports accounted for 6 percent of tons and 5 percent of value. For example,this trade flow includes imports and exports moving in international marine containers by intermodal railservice between the Detroit BEA and U.S. ports.The main cargo flows of interest in this Study are inbound and outbound, which together amounted to 183million tons in 2009 with an estimated value of $270 billion, 64 percent of total tons and 65 percent of totalcargo value. These flows are driven by industry and consumption, and generate the principal demand forwarehousing and logistics facilities, within the Detroit BEA. The largest directional flow is inbound to theDetroit BEA, 43 percent of tons and 36 percent of value. Outbound flows account for 21 percent of tonsand 29 percent of value, the higher share of value driven by the presence of higher value manufacturedgoods in the outbound trade from the Detroit BEA.The region also has a large volume of internal cargo movement, 18 percent of total tons and 7 percent ofvalue. Nearly 70 percent of internal traffic is truck shipments to and from warehouses within the region (forexample, deliveries from warehouses to stores), drayage of containers to and from intermodal rail yards,and movements of petroleum refining products. The internal cargo category includes an element of doublecounting of the inbound and outbound flows. For example, an inbound shipment enters a warehouse in theDetroit BEA and then departs the warehouse as a local delivery to a store or manufacturing plant. There isalso a large amount of cargo moving through the Detroit BEA, notably between Canada and other regions ofthe U.S., and handled by the border crossing points in the Detroit BEA. Through freight is generated byeconomic activity unrelated to the Detroit BEA. Figure 2-3: Detroit BEA Cargo in 2009 by Trade Flow Source: Derived from IHS Global Insight Transearch DataThe cargo flows identified above have considerable variation in terms of value per cargo ton. Whiledomestic inbound is the largest cargo flow it has one of the lowest values per cargo ton due to the presenceof a large volume of lower-value commodities. By contrast, higher-value commodities dominate theinternational cargo flows. As shown in Figure 2-4, the highest values per cargo ton are present in the cross- 13 | TranSystems
  18. 18. Translinked Freight Study Existing Freight Flowsborder trade with Mexico and Canada, due to thelarge presence movement of manufactured goods in Figure 2-4: Value per Cargo Tonsthese lanes.When evaluating the region’s cargo, it is helpful tofocus on commodities that are more suited toadded-value logistics services or undergo someform of manufacturing process. Such commoditieswill be of primary interest to the development ofindustry and logistics services in the Detroit BEA.The broadly defined “warehouse-able”commodities are those with a relatively high valueper metric ton and/or commodities that areprocessed (e.g. food products) as opposed to rawmaterials (e.g. grain). These commodities are morelikely to require added-value logistics servicesincluding warehousing and distribution services.Commodity groups are identified as warehouse-able (Table 2-1) based on value per ton data, Source: Derived from IHS Global Insight Transearch Datacommodity characteristics and judgment usingexperience from prior projects. Given the broadcommodity groups in the source data, a commoditygroup may contain a mixture of higher value and lower value components. Table 2-1: Warehouse-able Commodities Warehouse-able Commodity Groups Other Commodity Groups (Higher Value / Distribution Potential) (Lower Value / Distribution Potential) Alcoholic Beverages Pharmaceutical Products Agricultural Products Petroleum Products All Other Machinery Plastics And Rubber Base Metal Rocks Stone And Sand Base Metal Articles Printed Materials Cereals Wood Products Food Products Textiles And Articles Chemical Products Waste And Scrap Electronics Tobacco Products Coal Furniture Transportation Equipment Fertilizer Live Animals And Fish Vehicles And Parts Logs And Rough Lumber Misc Manufactured Prod Mineral Products Source: TranSystemsWarehouse-able cargo was an estimated 141 million tons in 2009, 49 percent of total Detroit BEA cargo.Warehouse-able cargo accounted for an estimated 90 percent of total cargo value, which reflects the highervalue nature of warehouse-able commodities (e.g. consumer products). 14 | TranSystems
  19. 19. Translinked Freight Study Existing Freight FlowsThe distribution of warehouse-able commodities by Figure 2-5: Detroit BEA Cargo Tons in 2009,direction is shown in Figure 2-5. Looking at the Total and Warehouse-ableinbound flow, these commodities accounted for 42percent of inbound tons. Their share was highest inthe cross-border inbound trade – 64 percent of tonsfrom Canada and 99 percent of tons from Mexico –and compared to 41 percent of domestic inboundtons.Warehouse-able commodities accounted for 66percent of total outbound tons. Penetration by tradewas – domestic outbound 68 percent of domestictons, shipments to Canada 48 percent and shipmentsto Mexico 87 percent.Warehouse-able commodities are also a prominentpart of through cargo, with a 71 percent share.Through cargo is mostly freight moving betweenCanada and other parts of the U.S. More detaileddiscussion of cargo flows, with an emphasis on Source: Derived from IHS Global Insight Transearch Datainbound and outbound flows, is provided in Section2.3 (truck cargo), Section 2.4 (rail cargo), andSection 2.5 (other modes). 15 | TranSystems
  20. 20. Translinked Freight Study Existing Freight Flows2.3 Detroit BEA Truck Cargo2.3.1 TotalTruck is the dominant transportation mode for freight moving in, out, within and through the Detroit BEA,accounting for 72 percent of tons and 81 percent of cargo value in 2009. This truck freight is generated bylocal consumption and industrial production, local and regional distribution, and freight movements throughthe Detroit BEA between other regions (e.g. Canada to other parts of the U.S.). Total truck freightamounted to 206 million tons with a total value of $333 billion.Truck cargo comprises a variety of flows and truck modes as shown in Figure 2-6. The largest segment bytonnage is domestic inbound freight, which accounted for 32 percent of tons in 2009 and 29 percent of totalvalue. This segment is followed by domestic internal6 (22 percent and 8 percent), and domestic outbound(22 percent and 8 percent). Truck freight related to Canada (inbound, outbound and through) is alsosignificant with 17 percent of tons and 30 percent of value; Canada’s larger share of value is due to theshipment of manufactured goods, notably finished motor vehicles and motor vehicle parts and accessories. Figure 2-6: Detroit BEA Truck Cargo by Trade Flow in 2009 Note: Canada and Mexico is classified as Truck, which captures both truckload and LTL service. Source: Derived from IHS Global Insight Transearch DataTruck cargo moves by several different truck modes – truckload, less-than-truckload (LTL), private fleet, andtruck (freight moving to and from Mexico and Canada). Private fleet involves freight handled by private in-house truck fleets, such as those operated by retailers, as opposed to commercial common carriertruckload services. LTL is a relatively specialist sector involving the transport of higher value and/or timesensitive and/or small volume freight. Trade with Canada and Mexico is classified under a general “Truck”category and this cargo is largely moved by commercial truckload service. Truckload freight is the principal6 Freight with its origin and destination within the Detroit BEA 16 | TranSystems
  21. 21. Translinked Freight Study Existing Freight Flowstruck mode with 44 percent of both cargo tons and value. Private Fleet truck shipments are the secondlargest truck mode measured by tons (38 percent) and the third largest by value (23 percent), which reflectsthe lower value basic materials (e.g. gravel and sand) that are a significant amount of this truck mode.A profile of regional truck cargo (domestic and international, all directions) by commodity group is providedin Figure 2-7. The largest commodity group is Nonmetallic Minerals, which amounted to 31 million tons in2009 and 15 percent of the region’s truck cargo, and involves shipments of low value materials includingsand and gravel. The second largest commodity group is Secondary Traffic (28 million tons and 14 percent),which is largely made up of Warehouse and Distribution Center traffic (for example, deliveries of consumerproducts from warehouses to stores) but also includes some freight drayage related to intermodal rail yardsand airports. Farm Products (28 million tons and 14 percent) includes grains, livestock, fruits and vegetables,and other agricultural products. Food or Kindred Products (11 percent) includes a blend of intermediaryproducts for further processing and final products, and examples are animal by-products, pet food,fresh/chilled/frozen meat, soft drinks and mineral water, and canned fruits and vegetables. The top fourcommodity groups are then followed by a mixture of industrial inputs and outputs – chemicals, petroleumand coal, primary metal products, etc. Transportation Equipment (ranked eighth with 4 percent of trucktons) captures the shipment of Motor Vehicles and Motor Vehicle Parts or Accessories by truck.The commodity ranking shifts when a filter is applied to identify the warehouse-able commodities, thosesuited to warehousing and logistics services (see background discussion in Section 2.XX). Secondary Trafficbecomes the top commodity group and bulk-focused commodities fall down the rankings (e.g. FarmProducts and Nonmetallic Minerals). The second and third ranked commodity groups are Food or KindredProducts and Chemicals or Allied Products. Further analysis of commodities, with a focus on thewarehouse-able commodities, is provided in the discussion of domestic and international truck flows bydirection (inbound, outbound, etc.) presented below. Figure 2-7: Detroit BEA Truck Cargo in 2009 – Top Ten Commodity Groups Source: Derived from IHS Global Insight Transearch Data 17 | TranSystems
  22. 22. Translinked Freight Study Existing Freight Flows2.3.2 Domestic Inbound and OutboundDomestic inbound and outbound flows together account for 52 percent of truck cargo tons related to theDetroit BEA. This cargo is generated by industry and consumption within the Detroit BEA, and demand inthe rest of the country.In 2009, the Detroit BEA had inbound truck cargo of 66 million tons with an estimated value of $95 billion.Approximately 41 million tons (62 percent) with a value of $87 billion (92 percent) is classified aswarehouse-able cargo. As shown in Figure 2-8, nearly all the top commodity groups shipped inbound to theDetroit BEA fall into the warehouse-able category. Some of the more significant individual warehouse-ablecommodities are Warehouse and Distribution Center freight, a variety of dry food products (e.g. soft drinksand canned goods), Motor Vehicle Parts and Accessories, and Forest Products. The lower-value and definedas non-warehouse-able commodities include Grains, Broken Stone and Riprap and Petroleum RefiningProducts.The Detroit BEA generated 42 million tons of outbound cargo with a value of $76 billion in 2009. Anestimated 31 million tons (74 percent) with a value of $73 billion (95 percent) was defined as warehouse-able cargo. The top outbound commodity group (Figure 2-8) was Secondary Traffic, nearly all falling into theWarehouse and Distribution Center category. Other individual outbound warehouse-able commoditiesinclude Grain Mill Products, Motor Vehicles, and Motor Vehicle Parts and Accessories. Figure 2-8: Detroit BEA Inbound and Outbound Truck Cargo in 2009 – Top 20 Commodity Groups Source: Derived from IHS Global Insight Transearch Data 18 | TranSystems
  23. 23. Translinked Freight Study Existing Freight FlowsDomestic inbound and outbound truck freight is heavily concentrated in short-haul lanes with regionssurrounding the Detroit BEA. Figure 2-9 shows the top partner BEAs measured by tons. Based on 2009data, the top-ten partner BEAs accounted for 70 percent of inbound and outbound truck tonnage, and allthese BEAs were in the states of Michigan, Ohio, Illinois and Indiana. The next ten BEAs accounted for 12percent of inbound and outbound freight, and four of these BEAs were in Ohio and Wisconsin. More distantBEAs ranked in the top-twenty were New York, Buffalo, Pittsburg, Los Angeles, Rochester and Minneapolis.The distribution by lane is little changed when focusing on the warehouse-able commodity segment. As alsoshown in Figure 2-9, the top ten part BEAs are all in Michigan, Ohio, Indiana and Illinois, and they accountedfor 68 percent of warehouse-able cargo tons. Prominent among the partner BEAs are important logisticshubs, including Chicago, IL. Figure 2-9: Detroit BEA Inbound and Outbound Truck Cargo in 2009 – Top 20 Freight Lanes Source: Derived from IHS Global Insight Transearch Data 19 | TranSystems
  24. 24. Translinked Freight Study Existing Freight FlowsFigure 2-10: Domestic Inbound Truck Freight 20 | TranSystems
  25. 25. Translinked Freight Study Existing Freight FlowsFigure 2-11: Domestic Outbound Truck Freight 21 | TranSystems
  26. 26. Translinked Freight Study Existing Freight Flows2.3.3 Domestic Internal and Through CargoThe Detroit BEA had internal7 truck cargo of 46 million tons with an estimated value of $26 billion. Much ofthis traffic is of lower value commodities and the largest commodity is Nonmetallic Minerals (17.1 milliontons). Other main commodity groups are Secondary Traffic (7.1 million tons), Farm Products (6.5 milliontons), Petroleum or Coal Products (6.4 million tons), Clay, Concrete, Glass or Stone (4.1 million tons),Chemicals or Allied Products (1.5 million tons), Lumber or Wood Products (1.3 million tons), and Waste orScrap Materials (1.0 million tons).Higher-value warehouse-able cargo was an estimated 13 million tons (28 percent) and accounted for 75percent of the value of internal cargo. The largest component of the warehouse-able cargo is SecondaryTraffic, which is made up of Warehouse and Distribution Center traffic (5.6 million tons), drayage of railintermodal cargo to and from ramps (1.5 million tons), and a small amount of air freight drayage.A large volume of domestic cargo flows through the Detroit BEA without stopping. In 2009, this domesticthrough cargo amounted to 6.1 million tons with an estimated value of $14 billion. A majority of this cargo,4.7 million tons or 76 percent, originates in and is destined for the Grand Rapids BEA, west of the DetroitBEA. Approximately, 5.4 million tons or 89 percent with a value of $13.7 billion is classified as warehouse-able. The two main warehouse-able commodities were Secondary Traffic and Food or Kindred Products,which together accounted for 51 percent of warehouse-able commodity tons.2.3.4 Imports and ExportsThe IHS Global Insight database provides estimates of import and export shipments that move intactbetween the international ocean port (e.g. Port of New York/New Jersey) and the Detroit BEA. Theseestimates do not capture all international freight moving in these corridors, much of which moves indomestic equipment as domestic freight. For example, a containerized import will be “converted” todomestic freight when it, for example, enters an import distribution center (IDC) near the Port of LosAngeles and then departs the IDC in domestic equipment for the Detroit BEA. Similarly, export cargo canbe shipped in domestic equipment to the international gateway port and then transloaded for shipmentoverseas. These types of moves are captured asdomestic shipments and thus are included in thedomestic inbound and outbound data presented earlier. Figure 2-12: Detroit BEA Import TruckAdditionally, the import and export data do not include Cargo in 2009trade with Canada and Mexico, which are reviewedseparately in Sections 2.3.5 and 2.3.6 respectively.The Detroit BEA had import cargo, excluding cross-border trade with Canada and Mexico, of 5.0 milliontons in 2009 with a value of $12 billion. As shown inFigure 2-12, this cargo is broken down into severalflows. The inbound flow of 1.4 million tons representsimports, mainly of warehouse-able commodities, viainternational cargo gateways to the Detroit BEA. Thetop two gateways are New York (19 percent of tons)and Los Angeles (16 percent of tons). Source: Derived from IHS Global Insight Transearch Data7 Internal refers to freight with its origin and destination within the Detroit BEA. 22 | TranSystems
  27. 27. Translinked Freight Study Existing Freight FlowsThe outbound flow of 1.0 million tons is import cargo arriving in the Detroit area from overseas and thenshipped to a final destination outside the Detroit BEA. The largest two commodities are Primary MetalProducts (53 percent of tons) and Clay, Concrete, Glass or Stone (29 percent). Final destinations areprimarily the regions surrounding the Detroit BEA. The internal flow, at 2.5 million tons, is cargo identifiedas imports arriving in the Detroit BEA (for example, via the Great Lakes) that remain in the Detroit BEA.The largest commodity in this segment is Nonmetallic Minerals (1.8 million tons).Figure 2-13 shows the breakdown of export cargo by Figure 2-13: Detroit BEA Export Truckdirection. The Detroit BEA had total export cargo of Cargo in 20095.4 million tons in 2009. The outbound flow of 2.2million tons represents exports via internationalgateways outside the Detroit BEA. The largest gatewaywas Los Angeles (37 percent of tons) followed byToledo, OH (11 percent) and Houston, TX (8 percent).The top three commodity groups were Chemicals orAllied Products, Waste or Scrap Materials, and FarmProducts.The inbound flow of 0.5 million tons captures exportsshipped from other parts of the country to the DetroitBEA, and then exported overseas. Origins areprincipally the areas around Detroit. Finally, the internal Source: Derived from IHS Global Insight Transearch Dataflow captures exports originating within the DetroitBEA and shipped overseas via the Detroit BEA. Thisflow amounted to 2.5 million tons.2.3.5 CanadaAs a major border crossing point, the Detroit BEA has a significant volume of truck freight generated bylocal and U.S. trade with Canada. In 2009, total volume was 34 million tons with a value of $98 billion.As shown in Figure 2-14, the largest part this freight, 28 Figure 2-14: Detroit BEA - Canada Truckmillion tons or 83 percent, moved through the Detroit Cargo in 2009BEA to and from other parts of the U.S. This throughfreight is dominated by warehouse-able cargo, includingshipments of Food or Kindred Products, Chemicals orAllied Products, Transportation Equipment, Pulp, Paperor Allied Products, Farm Products and Rubber or MiscPlastics.The inbound truck trade from Canada to the DetroitBEA amounted to 3.4 million tons with a value of $9.4billion. Locations in Ontario are the source for 89percent of the inbound truck freight from Canada. Thetop three commodity groups are TransportationEquipment (32 percent of tons), Primary Metal Products Source: Derived from IHS Global Insight Transearch Data(19 percent), and Food or Kindred Products (7percent). 23 | TranSystems
  28. 28. Translinked Freight Study Existing Freight FlowsThe outbound truck trade to Canada from the Detroit BEA was 2.4 million tons with a value of $7.9 billion.Ontario dominates the outbound trade and was the destination for 95 percent of outbound tons. Majorcommodity groups were Primary Metal Products (25 percent of tons), Transportation Equipment (25percent), Farm Products (11 percent), and Chemicals or Allied Products (9 percent).Finally, the source database provides estimates of freight flows by truck (and rail) between the Detroit BEAand Canadian port hinterlands, including Halifax. These data are reviewed in Section 2.6 in a discussion offreight flows along specific corridors.2.3.6 MexicoTruck trade with Mexico amounted to only 1.1 million tons with a value of $5.4 billion. This small amount oftruck freight, 42 percent of total trade volume with Mexico, reflects the preference for rail in the long-distance corridor between the Detroit BEA and Mexicoand the likelihood that some Mexican trade flowsthrough import distribution centers in other parts of the Figure 2-15: Detroit BEA - Mexico TruckU.S. prior to arrival in the Detroit area, thus arriving in Cargo in 2009Detroit as a domestic shipment.As shown in Figure 2-15, inbound truck freight fromMexico amounted to 0.56 million tons. This freight isprimarily higher-value commodities and the largestcommodity groups were Transportation Equipment (38percent), Machinery (13 percent), and ElectricalEquipment (12 percent).The outbound trade to Mexico was 0.49 million tonsand is dominated by Chemicals or Allied Products (50percent), which includes plastics and synthetic fibers. Source: Derived from IHS Global Insight Transearch Data 24 | TranSystems
  29. 29. Translinked Freight Study Existing Freight Flows2.4 Detroit BEA Rail Cargo2.4.1 TotalRail is predominant over longer distances and it was the transport mode for 18 percent of tons and 19percent of cargo value moving in, out, within and through the Detroit BEA in 2009. This rail freight isgenerated by local consumption and industrial production, and freight movements through the Detroit BEAbetween other regions (e.g. Canada to other parts of the U.S.). Total rail freight amounted to 53 milliontons with a total value of $77 billion.Rail involves a variety of trade flows and modes as shown in Figure 2-16. The largest segment by tonnage isdomestic inbound freight, which accounted for 42 percent of tons in 2009 but only 14 percent of total value,due to the presence of low-value coal shipments, which account for 67 percent of the domestic inboundtonnage. Canada rail shipments (by carload and intermodal) account for 17 percent of tons and 30 percentof value, due to the presence of higher-value manufactured goods in this trade. Rail shipments through theDetroit BEA between Canada and other U.S. regions dominate the Canada rail flows, accounting for 88percent of tonnage. The third largest trade flow is domestic outbound shipments from the Detroit BEA,accounting for 16 percent of tons and 33 percent of value, the larger share of value due to outboundshipments of higher value commodities (e.g. Transportation Equipment). Rail shipments with Mexico areanother high value commodity trade, accounting for 3 percent of rail tons and 11 percent of rail cargo value.Rail cargo involves different types of rail modes – carload, intermodal (that is, container or trailer on flatcar),and rail (freight moving to and from Canada and Mexico). Lower value commodities dominate movementsby carload, which accounted for 57 percent of tons and 36 percent of value. Intermodal rail, with 4 percentof tons and 14 percent of value, handles higher value commodities. Trade with Canada and Mexico isclassified under a generic rail mode. Intermodal rail has a presence in these trades due to the many highervalue commodities shipped. Figure 2-16: Detroit BEA Rail Cargo by Trade Flow in 2009 Source: Derived from IHS Global Insight Transearch Data 25 | TranSystems
  30. 30. Translinked Freight Study Existing Freight FlowsA profile of regional rail cargo (domestic and international, all directions) by commodity group is provided inFigure 2-17. The largest commodity group is inbound shipments of Coal, which amounted to 15 million tonsin 2009 and 28 percent of the region’s rail cargo. The other top commodities are Chemicals and AlliedProducts (13 percent of tons), Transportation Equipment (12 percent), Petroleum and Coal Products (8percent), and Primary Metal Products (8 percent). Transportation Equipment is primarily Motor Vehiclesand Motor Vehicle Parts or Accessories. Agricultural and consumer related commodities, Food Products (5percent) and Food or Kindred Products (4 percent) also appear in the top ten commodity groups.The commodity ranking shifts when a filter is applied to identify the warehouse-able commodities, thosesuited to warehousing and logistics services (see background discussion in Section 2.2). The total amount ofwarehouse-able rail cargo is estimated at 21 million tons, dominated by Chemicals and Allied Products (32percent of warehouse-able tons) and Transportation Equipment (30 percent). Examples of commodities inthe Chemicals and Allied Products group are Plastic Materials and Synthetic Fibers, Soap or OtherDetergents, and Dyes.Further analysis of commodities, with a focus on the warehouse-able segment, is provided in the discussionof domestic and international rail flows by direction (inbound, outbound, etc.) presented below. A review ofintermodal rail corridors is provided in Section 2.6.3. Figure 2-17: Detroit BEA Rail Cargo in 2009 – Top Ten Commodity Groups Source: Derived from IHS Global Insight Transearch Data 26 | TranSystems
  31. 31. Translinked Freight Study Existing Freight Flows2.4.2 Domestic Inbound and OutboundDomestic inbound and outbound flows together account for 58 percent of rail cargo tons related to theDetroit BEA. This cargo is generated by industry and consumption within the Detroit BEA, and demand inthe rest of the country.In 2009, the Detroit BEA had inbound rail cargo of 22 million tons with an estimated value of $11 billion.Approximately 15 million tons (65 percent) with a value of $486 million (5 percent) was inbound shipmentsof coal. Warehouse-able rail cargo amounted to 3.2 million tons with a value of $8 billion (77 percent). Asshown in Figure 2-18, the top-15 rail commodities shipped inbound to the Detroit BEA are a mixture ofwarehouse-able and other commodities. Four of the five top commodities are lower value and bulk-focusedcommodities, and these are nearly all shipped by carload service. Carload service moved 78 percent of thewarehouse-able commodities, including shipments of transportation equipment (e.g., Motor Vehicles inspecialized auto railcars). The remaining 22 percent of the warehouse-able commodities (e.g. Motor VehicleParts or Accessories) move by intermodal service (that is, container or trailer on flatcar).The Detroit BEA generated 8 million tons of outbound cargo with a value of $25 billion in 2009. Anestimated 3.8 million tons (46 percent) with a value of $23.7 billion (94 percent) was defined as warehouse-able cargo. The top outbound commodity group was Transportation Equipment (58 percent of outboundtons), which moved by carload service and intermodal rail service. The two other main warehouse-ablecommodities were Miscellaneous Mixed Shipments by intermodal rail and Food or Kindred Products, nearlyall shipped by carload service. Figure 2-18: Detroit BEA Inbound and Outbound Rail Cargo in 2009 – Top 15 Commodity Groups * The chart excludes coal shipments, which amount to 14.6 million tons. Source: Derived from IHS Global Insight Transearch Data 27 | TranSystems
  32. 32. Translinked Freight Study Existing Freight FlowsApart from coal and iron ore related shipments, rail freight is widely dispersed across origin and destinationregions (Figure 2-19). The top four lanes involve inbound coal shipments from Wyoming, West Virginia andKentucky and mainly inbound iron ore shipments from the Cincinnati, OH BEA. Outside of these top fourlanes, rail freight is widely dispersed by origin and destination. Some of the larger lanes include BEAscentered on ports and distribution hubs – for example, Chicago, New York, and Kansas City.The distribution by lane shifts when focusing on the warehouse-able commodity segment, with port andlogistics hub related BEAs, as well as large population centers, more prominent. The mix of origins reflectsinbound shipments related to local industry, notably the automotive sector, and for local consumption.Similarly, the outbound destinations are partly driven by shipments by the automotive sector, both offinished vehicles and components. Figure 2-19: Detroit BEA Inbound and Outbound Rail Cargo in 2009 – Top Freight Lanes Source: Derived from IHS Global Insight Transearch Data 28 | TranSystems

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