Freight’s Role in Economic Freight’s Role in Economic Development: Development:

Urban & Rural CasesUrban & Rural Cases

Glen WeisbrodGlen WeisbrodEconomic Development Economic Development Research Group, Inc.Research Group, Inc.

2 Oliver Street, 92 Oliver Street, 9thth Floor FloorBoston, MA 02109 USABoston, MA 02109 USA

gweisbrod@edrgroup.comgweisbrod@edrgroup.com

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Economic Development PerspectiveEconomic Development Perspective

Freight Focus on Access / Connections• Invest to provide connectivity (linkages);• Benefit is primarily in maximizing accessibility to

resources & markets.

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Relevance of the Econ Devel ViewRelevance of the Econ Devel View

• Areas left out of the interstate highway system; lacking basic connections

• Existing connections degrading due to congestion

• New connections justified by emerging global economy (intermodal, air, seaport connections)

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Case StudiesCase Studies

• Vancouver, BC Gateway: Impact Study and Actions.

• Appalachian International Trade Clusters:

Needs and Opportunities.

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Greater Vancouver Gateway CouncilGreater Vancouver Gateway Council

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Elements of StudyElements of Study

Regional economic development consequences of investment (vs. failure to invest) in road & rail system improvements to address rising traffic congestion.

Involvement of the Greater Vancouver Gateway Council, Greater Vancouver Transportation Authority (GVTA / TransLinks), BC Transport, Transport Canada and Dept. of Western Economic Diversification

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Central or Peripheral?Central or Peripheral?

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Global ChangeGlobal Change• Technology – intermodal, containerized• Trade Corridors – Pacific Rim growth• Consolidation – mega ports and gateways

Globalization…

Highest Value (’02) Minerals & Coal Wood Fertilizer Mechanical Equip Paper

Fastest Growth (’92-’02) * Electrical Machinery * Plastics * Furniture * Instruments * Motor Vehicles

W. Canada Exports

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Western Transport DependenceWestern Transport Dependence

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60

Saskatchewan

Ontario

Nova Scotia

Newfoundland+PEI

Alberta

Quebec

Br. Columbia

New Brunswick

Manitoba

Concentration of Jobs in Transportation, Rel to Canada Average

Western Provinces

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Westward Flows to AsiaWestward Flows to Asia

Asia $11bAsia $11bThrough VancouverThrough Vancouver(Pacific Marine Gateway)(Pacific Marine Gateway)

Europe/Africa $3b

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Relative Growth in Container TrafficRelative Growth in Container Traffic

0%10%20%30%40%50%60%70%80%90%

100%

NorthAmerica

Canada West Coast(US andCanada)

Vancouver

1991-1996 1996-2001

North Canada West Coast Vancouver America (US-Canada) Gateway

Growth of TEUs

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Regional Growth ProjectionsRegional Growth Projections

0

100

200

300

400

500

600

2001 2021

Air Cargo

Truck Cargo

Rail Cargo

Maritime Cargo

2002 – 2021 ForecastsPopulation +42%Car Traffic +39%Truck Traffic +56%Rail tonnes +60%

Cargo Shipments in BC, (millions of tonnes)

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Concern for CompetitivenessConcern for Competitiveness

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Border Facilities

30 Marine Terminals, 22 Rail Yards 6 Border Crossings, 1 Airport

On Site: 75,000 jobs W. Canada: 145,000 jobs, $19B output

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Objectives of the MCTSObjectives of the MCTS

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To Trans Can Hwy

To US Border

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Transport Capacity Issues Transport Capacity Issues (2021)(2021)

Invest in Major Corridor Transportation System …or Status Quo?

Compared to the Investment Scenario…• “Status Quo” traffic congestion will add over

112,000 vehicle-hours of delay daily• “Status Quo” rail bridge limitations will reduce

train activity by 11/day

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Analysis ProcessAnalysis Process

Analysis process (DelCan, GVTA and Economic Development Research Group) :

• detailed traffic simulation model• railroad facility supply/demand forecasting• four province economic simulation models• international trade and competitiveness model• analysis of infrastructure scenarios on

production, imports/exports, & cost sensitivity.

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Direct EffectsDirect EffectsGround Transport • Cars – increase in travel expense ($134 million/yr)• Trucks – raise shipper costs; reduce business

competitiveness & attraction ($280 million/yr)• Rail – capacity limitation: businesses seek

alternative routes at higher cost (1100 railcars/day)

Ports • Marine ports – higher cost, shift activity elsewhere• Airport – raise costs for airport use

Diff: Build vs. Not

2020

Results: Economic ImplicationsResults: Economic Implications

Effects for City, Metro, Province and W. Canada

Economic Impact:• 7,300 to 16,300 jobs• $ 475 million to $ 1.1 billion of GDP /yearEconomic Stakes:• Over 150,000 jobs in production industries

produce over $30 billion of exports /yearTotal Benefit (incl. personal time)• $806 million to $1.5 billion of benefit value /year

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Plans In ProgressPlans In Progress

A New Crossing of the Fraser River and Regional Road Improvements

                                           

Improve the Major Road Network through eight new road projects and a new crossing of the Fraser River. Build the Richmond-Airport-Vancouver rapid transit line linking airport and downtown/waterfront.

ALSO…North Fraser Perimeter Road Fraser Highway Widening Dollarton Bridge Expansion (river crossing) Coast Meridian Overpass (rail yard crossing)204 Street Overpass (rail track crossing)Main Street Widening (port access for trucks). Murray-Clarke Connector (crossing RR tracks at port)David Avenue Extension (river crossing)

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Analysis of Global Competitiveness of Selected Industries and Clusters in the Appalachian Region

Study Components:• Industry Analysis• Market Analysis• Transportation Analysis

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Selection of Export ClustersSelection of Export Clusters

• State Initiatives and Targeted Industries• Location in Appalachia• Growth in Foreign Demand• Competitive Pressures• Current Trade Relations• Prospects for Geographic Expansion• Regional Economic Impacts & Leakages

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Selected IndustriesSelected Industries

• Electronic Components • Food Processing Machinery• Packaging Machinery• Wooden household Furniture • Upholstered Household Furniture• Auto Parts

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Foreign MarketsForeign Markets

Motor Food Upholstered WoodenVehicle Processing Packaging Electronic Household Household

Destination Parts Machinery Machinery Components Furniture FurnitureAfrica 0.6% 2.3% 1.4% 0.8% 0.9% 1.3%Asia 11.1% 20.8% 12.5% 30.2% 18.0% 28.4%Australia 1.2% 3.2% 3.9% 1.2% 0.9% 0.5%Canada 65.6% 20.6% 26.1% 25.6% 48.9% 42.6%Central America 0.2% 3.3% 3.1% 1.4% 3.4% 7.0%Europe 10.3% 32.1% 38.1% 25.7% 22.3% 15.3%Mexico 9.5% 8.5% 9.3% 9.9% 3.4% 3.0%South America 1.5% 9.3% 5.6% 5.1% 2.2% 1.8%

Appalachian Exports by Industry and Destination(Percent of Appalachian Industry Exports)

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Transportation Mode by Transportation Mode by CommodityCommodity

Commodity Highway Rail Water Air

Furniture 95.61% 3.94% 0.03% 0.42%

Machinery 95.89% 2.75% 0.38% 0.98%

Electrical Equipment 94.38% 3.70% 0.09% 1.83%

Transportation Equipment 87.24% 12.16% 0.09% 0.51%

Transportation Mode Shares Used to Deliver Exports to Port of Ladingby Commodity

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““Ports” for Appalachian ExportsPorts” for Appalachian Exports

• Most important ports of shipments out of US– Detroit, MI– New York, NY (the port and JFK Airport)– Miami (the port and Miami International)

• Other ports– Buffalo-Niagara Falls, NY and Champlain-

Rousse Point, NY; Charleston SC; Norfolk, VA; Baltimore, MD; Laredo and Dallas-Fort Worth, TX; and Jacksonville, FL

2828Florida

States or Origin &% of ARC Exports:•TN- 22%•AL- 20%•WV-15%

Key Ports for Export:•Detroit MI•Port Huron MI•Buffalo NY•Miami FL•Jacksonville FL

AUTO PARTS EXPORTSAUTO PARTS EXPORTS

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FOOD PROCESSING MACHINERY EXPORTS FOOD PROCESSING MACHINERY EXPORTS

Florida

Texas

States or Origin &States or Origin &% of ARC Exports:% of ARC Exports:•PA - 28%PA - 28%•GA- 20%GA- 20%•SC- 14%SC- 14%•OH- 12%OH- 12%

Key Ports for Export:Key Ports for Export:•Laredo TXLaredo TX•JFK Int. Airport NYJFK Int. Airport NY•New York NY .New York NY .•Detroit MIDetroit MI•Port Huron MIPort Huron MI

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PACKAGING MACHINERY EXPORTS PACKAGING MACHINERY EXPORTS

Florida

Texas

States or Origin &States or Origin &% of ARC Exports:% of ARC Exports:•SC - 65%SC - 65%•GA- 16%GA- 16%

Key Ports for Export:Key Ports for Export:•New York NY .New York NY .•Buffalo NYBuffalo NY•Laredo TXLaredo TX•JFK Airport NYJFK Airport NY•Miami Int. Airp’t FLMiami Int. Airp’t FL•Miami FLMiami FL•Champlain NYChamplain NY•Charleston SCCharleston SC

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ELECTRONIC COMPONENTS EXPORTS ELECTRONIC COMPONENTS EXPORTS

Florida

States or Origin &% of ARC Exports:•WV- 31%•PA- 20%•GA- 13% •MS- 11%

Key Ports for Export:•JFK Int. Airport NY•Miami Int’l Airp’t FL•Buffalo NY•Detroit MI•Port Huron MI

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Rail & Air Intermodal FacilitiesRail & Air Intermodal Facilities

TOFC / COFC Facilities

Airport Facilities

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Intermodal Facilities Supporting Intermodal Facilities Supporting Auto Parts ExportsAuto Parts Exports

State Value of Auto Parts Exports from

Appalachia in $M (Avg 1998-2002)

Locations of TOFC/COFC Facilities in Appalachia

Locations of Rail Intermodal Facilities

Operated by CSX or NS

Alabama $727 Birmingham (2), Huntsville

--

Georgia $201 -- Atlanta (3), Austell, Savannah (2)

Maryland $277 -- Baltimore (2)

Ohio $300 -- Cincinnati, Cleveland, Columbus, Toledo

Tennessee $800 Kingsport, Knoxville

Memphis (2), Nashville

West Virginia $550 -- --

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ADHS - Appalachian Development Highway System

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ADHS Gaps IdentifiedADHS Gaps IdentifiedCorridor State and Location of Gaps

A TN, GAA1 GAB NC

B1, C OHD WV, OHG WV, KYH WVJ KY, TN

M, N, O, U PAS TNK TN, NCR KY

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Challenges for Connecting to Challenges for Connecting to Ports of LadingPorts of Lading

• Ports of lading and firm locations are related

• Appalachia in the middle of an auto mfg. corridor stretching from Canada to Mexico

• Eastern Counties in Appalachia exports more to Europe – easier access to east coast ports

• Western portion of in Appalachia exports more within North America – better access to key industrial areas in US, Canada, Mexico

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Attracting “Inward Investment” Attracting “Inward Investment” Related to Transport ConnectionsRelated to Transport Connections

Recent Offshore-Based Auto Assembly in Southern US & Mexico

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……On the WebOn the WebVancouver Gateway Council

Major Commercial Transportation Systemwww.gvgc.org

Appalachian Regional CommissionTransportation Studies

www.arc.gov

Economic Development Research GroupLibrary of Economic Impact Studies

www.edrgroup.com