Excerpts from a Presentation made at Wayne State University
April 24, 2009, by Richard E. Blouse Jr.
Excerpts from a Presentation made at Wayne State University
April 24, 2009, by Richard E. Blouse Jr.
ood morning, it is good to be here every corner of the world to seek out infrastructure - the roads, railways, water
with all of you. I want to thank opportunities for jobs and investment for routes, international border crossings
Wayne State University for hosting the Detroit region. We regularly travel to and airports - to become a large center of
today’s discussion on an issue the Detroit Europe, Asia, the Middle East, Africa and international commerce.
Regional Chamber is very much invested South America to make global connections
in – transforming our region into a major for our local economy. We have worked for And just as importantly, we have the
center of international commerce. fifteen years to develop these relationships. intellectual capacity and human capital to
be a hub of global trade. Our workforce is
Now you may be asking yourself - what A robust trading infrastructure is absolutely well equipped to move goods around the
is TranslinkeD? This is what I am here to crucial to help support these relationships globe effectively and efficiently.
discuss with you today. and connections to create jobs and attract We have been doing it for generations as
investment for our region. And, this is why the automotive capital of the world.
TranslinkeD is the chamber’s vision to we our leading the TranslinkeD initiative.
leverage the Detroit region’s assets into Is there an opportunity to capitalize on
a global logistics hub for moving people, REGIONAL ECONOMIC global trade? Absolutely! Prior to the
goods and ideas around the world. It is part OPPORTUNIT Y recession, global volumes were increasing
of our economic development strategy to year over year.
put southeast Michigan back on a path to Regional economies grow by being globally
prosperity. If we do this right, TranslinkeD connected and unified. There is a direct correlation between the
has the potential to grow hundreds of amount of TEU’s – twenty-foot equivalent
thousands of new jobs and billions in When talking about this vision for becoming unit - a measurement used in intermodal
investment for the Detroit region. a global logistics hub, we are referring to a transportation - a region can process and its
larger region than just Detroit. This larger GDP The more TEU’s that move through a
The chamber, as an organization region includes Windsor, Port Huron, Flint, region, the greater the economic impact on
representing over twenty thousand Ann Arbor and Toledo. Detroit is at the that region. Trade volumes directly affect a
businesses from across the Detroit region, heart of this larger region
has an interesting perspective because so and therefore is the most
many of our members are plugged into critical component of
the global economy. They understand the creating a global logistics
importance of open trade and the economic hub. Our region is what
benefit that comes from nations freely ties this concept of a global
exchanging goods and services. We hear logistics hub together.
from our members all the time about how
best to tap into increasing global trade. To visualize it, you can see
not only the ideal geographic
Enhancing our global links will help us position, but also see the
strengthen our economic base. Our transportation assets within
region needs an infrastructure system that each component that are
supports a positive transformation. more valuable in the greater
Building a system for future investment and
a more diversified economy are two very Detroit is ideally suited to
important imperatives for our region. capitalize on the way global
commerce is conducted in
The chamber’s economic development today’s fast-paced world.
team leads business missions into We have the transportation
local economy. It’s this simple - the more the moment. However, once we get past the United States and the Far East, while
trade, the better the economy. these formidable obstacles, we will be well movements between Europe and the west
on our way to having global trade resume coast of the United States and Canada
Projections for the logistics industry its natural growth rate of four to eight comprise the second highest volume of
estimate a three-fold increase from three percent annually. trade through the canal.
trillion annually to fourteen trillion by 2020.
Global insight predicts a 250 percent So, our focus should be on the future. China has become the biggest player in
increase in North American truck traffic Whether it’s 2009 or 2012 where we see trade along the North American east coast.
because of the increases in trade and the recovery, our strategy needs to look at China’s volume of container trade through
logistics industry. volumes and opportunities in five, ten, north Atlantic ports grew three times faster
fifteen and twenty years from today. than any other region between the years
A logical question that arises from all of 2001 to 2003. This trend is expected to
this talk about tapping into the benefits of The question we need to ask ourselves is continue, especially as expansion of the
global trade is – what about the economic where do we want to be in that same time Panama Canal will allow more Pacific to
recession? It’s a good question and one frame and how do we take advantage of Atlantic trade to occur.
that is worth spending a little bit of time those opportunities?
Global trade has certainly slowed in Europe to
Asia to East Coast
recent months because of the world-wide West 3
recession - but this is cyclical in nature and Coast
trade will rebound. So, we should not be
discouraged from implementing a plan to “Silk Road”
SE Asia and
turn the Detroit region into a logistics hub. MENA via
Suez Canal to
2 North America
According to World Trade Organization, the
collapse in global demand has caused a Panama Canal
roughly nine percent contraction in exports to East Coast
worldwide. This began in late 2008 and
has continued into 2009. It explains the
approximate ten percent decline in cargo
throughput most ports have experienced
over the last year.
Adding to that is the expansion of the
The WTO is predicting global trade will Panama Canal where Chinese shipments
continue to weaken for the next few GLOBAL TR ADE ROUTE will be even more capable on larger ships,
quarters. However, it will resume its carrying more TEU volume and by-passing
normal annual upward trajectory - which Let’s look at Atlantic shipments. Consider congested west coast ports.
was approximately at a six percent growth how cargo travels between the Atlantic
rate in 2007- once the global economic and Pacific oceans. Where you’d expect China continues to lead the world in
crisis subsides. the greatest movements is from South economic expansion with its GDP
America, Europe and northern Africa. What increasing about nine percent a year,
Whether this growth in global trade will you might not expect is the tremendous despite the current economic mess most
occur at the end of 2009 or sometime in Chinese increases. Chinese trade made of the rest of the world finds itself in today.
2010 is entirely dependent upon when the greatest year over year increases in This growth is expected to continue well
the economic recovery finally takes hold. Atlantic trade, growing significantly faster into the near future.
But, all the historical data and economic than trade from any other region of the
forecasting indicate global trade will world. Increasing Atlantic shipments even more is
eventually be on the rise again. the growth of Indian trade through the Suez
According to the Panama Canal authority, Canal. The development of the new “Silk
Certainly, turning the global economy the majority of the traffic through the Road” includes greater imports and exports
around is the largest obstacle we face at canal moves between the east coast of out of India into the western hemisphere.
Also, India is not far behind China in terms Kansas City has
of population so that market will continue to implemented the
grow as well. Smartport, which
In fact, there is continued economic growth connects BNSF rail
in Asia as booming middle-class populations to the west coast
with increasing disposable income sprout in of the U.S. and to
many nations in that part of the world. The Lazaro Cardenas
Port in Mexico
national intelligence council has calculated
the world’s population will increase to over
seven billion by the end of 2010. Ninety-
has connected with
five percent of this growth will occur in the port of Virginia
developing nations such as China and India. via Norfolk southern
This presents many new markets to sell rail through the
and buy goods within the world economy. Hartland Corridor.
This relationship allows shippers a direct
distribution point into the Midwest and a
closer connection to their end users.
Further, CSX is looking at a project called
the national gateway to build their inland
and ocean port connections.
So what is our
The real question
is: where isn’t our
CAPACIT Y SHORTFALL
Now that we’ve looked at the greater
THE INL AND PORT
hemispheric movements, let’s see how
trade is moving into the U.S. An inland port, which is ultimately what THE DETROIT INL AND PORT
Seventy-five percent of ports along the east we are trying to accomplish for the Detroit
and west coasts will encounter significant region, is a physical site located away from Despite the absence of such activity in our
capacity problems in the next few years traditional coastal borders. Inland ports region, Detroit already has the makings and
ahead. By 2024, these ports will be well may also be referred to as dry ports or structure of an inland port. Our region has
over their capacity. intermodal hubs. been the inland port for the auto industry
A number of regions throughout the for over 100 years.
In fact, ports at Oakland, Los Angeles, Long country have
Beach, Charleston, Virginia and New Jersey implemented
will begin experiencing capacity constraints vast infrastructure
as early as 2012. investments, alliances
with ocean ports and
This shrinking capacity issue has brought strategic economic
about a solution: the inland port development plans.
As I stated earlier, the Detroit region is are still present today. If fact, they are corridor. This is a major north-south artery
uniquely situated to take advantage of more important than ever considering how in nation’s highway system. In addition, all
growing global trade. We are geographically much trade has grown and is expected the key east-west roads are connected to
positioned well to plug into existing trade to grow in the coming decades. Not only i-75 in some fashion.
routes - from the “Silk Road” that moves are we integrally connected to the great The I-75 corridor feeds a production
through the middle east to the trade that lakes waterways, but to major railways pipeline, if you will, that runs along eastern
moves between the Atlantic and Pacific and roadways that span out across the quadrant of the United States. A lot of
oceans via the Panama Canal. continent as well. factories, plants and distribution centers
rely on i-75 because of their proximity to
The best connection from those trade A lot of times, moving goods through this important roadway.
routes to the industrial Midwest is our Detroit via Canada is faster and less On top of cargo arriving by water and
region. expensive than using other ports. rail, we have three airports – Willow Run,
Detroit Metro and Bishop International.
We are blessed with the good fortune of For example, the travel time from These add an important and necessary air
being located near the source of the Saint Rotterdam, which is the second busiest component to TranslinkeD.
Lawrence Seaway. This river is Mother port in the world after
Nature’s entrance way for the heartland of Shanghai, to Halifax is five
North America. It is no accident that Detroit days while Traveling from
has been a historically important location for Rotterdam to New York would
more than three hundred years. take seven days. Then there
is the cost advantage. Moving
Fort Detroit, first established by the French goods through Canada is less
in the early 1700s and later controlled expensive than anywhere on
by the British up until the war of 1812, the east coast.
was considered a strategic post for both
facilitating trade and military dominance Using the advantage of the
on the continent. The reason is simple. Saint Lawrence Seaway,
Detroit is a major gateway into and out of Detroit is a viable alternative
North America. for moving goods from Europe
to the Midwest of the U.S.
This would allow ships to
THE NORTH AMERICAN GATEWAY bypass the congested and costly ports Toledo is an important part of the equation
along the east coast. too. It has numerous transportation assets,
At the base of the St. Lawrence Seaway that when tied to ours, makes our case for
system, our region connects directly to the Likewise, goods arriving on west coast of a global logistics hub for this region even
Halifax and Montréal container ports by the U.S. from Asia that are to be distributed stronger.
road, rail and water. throughout North America could use the
Those characteristics that made Detroit Halifax Detroit route via the Panama Canal. In addition to our land connections, Detroit
so attractive for the past three centuries This allows shippers to sidestep the equally metro airport provides our region with
clogged and expensive enviable national and global access. You
ports along the west coast. may have heard of aerotropolis – an effort
You save time and money, to connect Detroit metro and willow run
two critical elements in into a new economic development corridor.
a fast-paced international The idea behind an aerotropolis is to
economy. leverage a region’s airport, or in our case
airports, to attract jobs and investment from
I -75/I - 9 4 CORRIDOR the logistics industry.
Which leads me to another Other regions around the nation and
important factor that world, such as Louisville and Frankfort are
benefits Detroit as a major successfully using this concept to create
logistics hub - the I-75 thousands of new jobs and businesses.
Aerotropolis is a pivotal piece of TranslinkeD Yes!
by supporting our vision for creating a Our state and local leaders will need to
broader global logistics hub for the entire Other regions modeling themselves as demonstrate they can work together
region. inland ports have brought all of the pieces towards a unified goal and vision.
So while other regions are building capacity To get where we need to go with
to attract trade, we have a natural trading Detroit has all the right pieces – TranslinkeD, we will need to change the
advantage through our multi-modal international roads, transcontinental actors involved. We need a broader, global
geographic region. railroads, international airports and abundant approach and to include more people in the
waterways - to be a global logistics hub dialogue. This will require educating the
You can see a heavy concentration of but we have never put them together in general public about the needs and benefits
NAFTA-based trade centered around the such a way to take full advantage of their of this plan. Only then can we bring the
base of the great lakes connecting into economic impact. If we can arrange these TranslinkeD vision to fruition.
Mexico through Texas. pieces to fit together properly, we will
improve and increase our capacity and Time is of the essence because Detroit
It is no accident that the international border connectivity to quickly move cargo around has global competitors. If we do not do
crossings between Detroit and Windsor the world. Thus, we will have achieved our this other regions will – and the jobs and
comprise the largest trade passage in the goal of becoming a global logistics hub and investments we hope to have here will
world in terms of the net worth of cargo. on international gateway inland port. flow to those regions that have their acts
Over two hundred billion of trade moves together. Kansas, Virginia, South Carolina
through the region each year – much of this Improving and connecting our waterways, and Georgia already have plans on the
due to NAFTA. Three hundred million of railroads and roads is also vital to advancing table to become centers of global trade.
just-in-time deliveries alone pass through our ability to move goods effectively. It is a race against the clock to be the first
the Detroit Windsor region every day. It to cross the finish line as a leading hub of
is because of our location and connection, We also need to increase our warehouse international activity.
through water, rail and roads, to the rest of capacity.
the continent. You can see we have our work cut out
We will need this increased storage ability for us. It is not going to be easy, but it is
These multiple connections translate into once trade picks back up, especially if we absolutely necessary if we want to diversify
hard numbers. plan on being a center of international our economy, create new jobs and attract
commerce. more investment for the Detroit region.
Detroit ranked fifth in national exports We need to put ourselves on the map as
in 2008 - behind Los Angeles, Seattle and Finally, we need to draw this responsibility a major global logistics hub. TranslinkeD is
New York, but ahead of Chicago. And the under an authority or governance structure the road map to do this and to get us back
trade is going out of the region is in good that can market and administer a logistics on a path to prosperity.
balance with the trade coming in – key hub.
for shipping companies to maximize their This is the message the chamber is working
movement. While the Detroit region has all the on delivering to help educate the public as
components for being an epicenter of well as business, community and political
This does not only apply to trade, Michigan international commerce, we lack a unified leaders. We all need to be on the same
moves more commodity value than any vision and voice from our business, page working towards the same goal if we
other state. community and political leadership. All hope to achieve this ambitious plan.
too often, our region is caught up in petty,
The opportunity and efficiency offered by parochial politics. Such provincial histrionics
the region is ideal for companies in any will only hold our region back. We need
mode of transportation and at any level of our entire community working towards
the supply chain. the same goal of putting all the pieces
of the global logistics hub together. Our
So, is this it? We already have a robust congressional legislators should have the
trading network. Do we need to do single focus of securing as many federal
anything? resources as possible for investing in our
roads, waterways, rail lines and borders.