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Transcript of The Detroit Region's Opportunity: Creating Jobs by Developing the Transportation, Distribution and...
THE DETROIT REGION’S OPPORTUNITY
March 1 – July 31, 2011
Creating Jobs by Developing the Transportation, Distribution and Logistics Sector
A Report on Progress to:
• New Economy Initiative for Southeast Michigan (NEI)
• Michigan Economic Development Corporation (MEDC)
Carolyn Gawlik
Detroit Regional Chamber Foundation
One Woodward Avenue, Suite 1900
Detroit, Michigan 48232
The Detroit Region’s Opportunity
Page 1
The Detroit Region’s Opportunity C R E AT I N G J O B S B Y D E V E L O P I N G T H E T R A N S P O R TAT I O N , D I S T R I B U T I O N A N D L O G I S T I C S S E C T O R
Table of Contents
BACKGROUND .................................................................................................................... 2
REVIEW OF GRANT FUNDS EXPENDED TO DATE ............................................................... 2
PROGRESS IN MEETING OVERALL PROGRAM OBJECTIVES ............................................... 2
WORKSTREAMS ................................................................................................................... 3
BENCHMARKS AND METRICS ACHIEVED ............................................................................ 4
Workstream 1 ........................................................................................................................................... 4
Workshop 1 ............................................................................................................................................ 4
Workshop 2 ............................................................................................................................................ 5
Workshop 3 ............................................................................................................................................ 5
Survey Results: Hub Capability Perceived Importance vs. Region’s Perceived Performance . 5
Workstream 2 ........................................................................................................................................... 7
Workstream 3 ........................................................................................................................................... 7
Regional Freight Study ......................................................................................................................... 7
Freight Infrastructure Study ................................................................................................................. 8
Workstream 4 ........................................................................................................................................... 8
Workstream 5 ........................................................................................................................................... 9
Website ................................................................................................................................................... 9
Social Media .......................................................................................................................................... 9
Newsletter ............................................................................................................................................ 10
Workstream 6 ........................................................................................................................................ 10
SIGNIFICANT EVENTS OR CONDITIONS THAT HAVE IMPACTED ABILITY TO MEET PROJECT OBJECTIVES........................................................................................................................................... 11
ADDITIONAL INFORMATION THAT MAY BE OF INTEREST ............................................... 11
APPENDIX A: FINANCIAL SUMMARY ............................................................................... 12
APPENDIX B: TRANSLINKED PROJECT MAP ..................................................................... 13
APPENDIX C: PROJECTED STRATEGIC OUTCOMES .......................................................... 14
The Detroit Region’s Opportunity
Page 2
BACKGROUND In 2007, the Detroit Regional Chamber embarked on a mission to leverage the Detroit region’s transportation assets for business attraction. The importance and value of the region’s freight movements are monumental for the national economy. Few areas in the country can match the number and variety of assets in this region. Our history in manufacturing and logistics related to the automotive industry has given us access from the major international ports to the heart of manufacturing and production in the United States. TranslinkeD was introduced at the 2008 Mackinac Policy Conference and was made of Detroit Regional Chamber and Detroit Regional Economic Partnership members to strategically plan our future logistics and mobility resources. TranslinkeD’s focus is to develop the Detroit area into a globally recognized northern border supply chain cluster.
In spring of 2010, the Detroit Regional Chamber and Michigan State University released a study concluding that Metro Detroit could create up to 66,000 new jobs and $10 billion in new annual economic development if the region develops a coordinated, cross-border supply chain management strategy. That fall, the New Economy Initiative for Southeast Michigan and the Michigan Economic Development Corporation granted the Detroit Regional Chamber Foundation an award to develop a regional logistics and supply chain hub in the Detroit trade area. This report describes the activities of the Detroit Regional Chamber Foundation on this work from March 1 through July 31, 2011.
REVIEW OF GRANT FUNDS EXPENDED TO DATE The attached spreadsheet provides a financial summary of the Transportation, Distribution, and Logistics (TDL) project (see Appendix A).
At this point, the grant managers anticipate no revisions in the budget.
PROGRESS IN MEETING OVERALL PROGRAM OBJECTIVES The TranslinkeD project includes collaboration with Michigan State University, Wayne State University, Southeast Michigan Council of Governments, key business leaders and transportation, distribution and logistics leaders, academic and research thought leaders, and economic development organizations throughout southeast Michigan, northwest Ohio, and southwest Ontario.
The project has been divided into several workstreams (see page 3).
The Detroit Region’s Opportunity
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1
• Recommendations for a regional entity, together with an organizational structure that can be implemented and sustainably funded (working jointly with Michigan State University)
• Establishment of a base investor group to promote and build the logistics industry through the regional entity
2
• Development of supply chain pilot projects to demonstrate the value proposition for an international TDL hub (collaborating with lead organization Michigan State University)
3
• Design a truly regional economic development strategy for the TDL sector – informed by NEI – and conduct the appropriate economic analyses
4• Development of an education campaign to inform key stakeholders (collaborating with lead organization Michigan State University)
5• Creation of a unified TDL brand strategy, marketing messages, and marketing plan for the region
6• Provision for the necessary contractual services and appropriate administrative support
WORKSTREAMS
The Detroit Region’s Opportunity
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BENCHMARKS AND METRICS ACHIEVED
Workstream 1
The Detroit Regional Chamber worked with Michigan State University, Wayne State University, and SEMCOG to hold a series of three workshops focused on the design of a regional intermediary. Key stakeholders representing industry, universities, and economic development groups throughout the region contributed to the success of these workshops by providing valuable input of regional opportunities and challenges, thorough analysis of benchmark data, and thoughtful discussion. Detailed presentations and results of each workshop can be found at www.translinkeddetroit.com.
Workshop 1
March 11, 2011 41 attendees The March 11th workshop challenged participants to assess and prioritize hub capabilities, evaluate regional hub organizational and governance models, and identify the next steps in creating a regional logistics intermediary. Four main categories of capabilities are supply chain expertise, economic development, strategic infrastructure/intermediary funding, and collaboration. The region was assessed in each of these categories relative to eleven other logistics hubs in the U.S. and Canada.
Attendees determined the most critical capabilities of a successful hub are customer service and reliability, supply chain labor, hub operations cost, strategic corridor identification, understanding the global landscape, marketing, international border, airport capability, interstate highways, rail network, streamlined government, and community involvement.
Four governance models were reviewed: port authority, port authority “lite,” public/private partnership, and industry collaborative. Strengths and weaknesses for each were documented, and necessary model refinements were noted.
HUB CAPABILITIES
•Economic competitiveness and lowest supply chain cost to serve•Supply chain sustainability•Infrastructure/modal support
Supply Chain Expertise
•Competitive tax environment•Ability to serve global markets
Economic Development
•Infrastructure support and capabilitiesStrategic Infrastructure/ Intermediary Funding
•Joint commission or authority•Strategic alliances
Collaboration
The Detroit Region’s Opportunity
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Workshop 2
April 29, 2011 35 attendees The April 29th workshop worked to finalize the design of the regional intermediary and develop a plan for organizational implementation. Participants determined metrics for measuring hub success. Primary metrics are the number of direct and indirect jobs created and the economic development activity measured in dollars. Secondary metrics include the number of new businesses attracted, the business retention rate, the ratio of public/private investment, and the volume and value of inbound and outbound shipments. Attendees assessed how the benchmark cities compared in these categories. One key finding is that the Detroit-Toledo-Windsor region already compares quite favorably in the volume and value of shipments.
Participants discussed the fit of a public/private partnership organizational model in the region. Obstacles to implement this model were identified, and opportunities to mitigate potential issues were reviewed. Regarding an operating board, key areas the group considered centered around striking a balance between having a board large enough to be representative, yet small enough to be nimble. The need for a champion was clearly expressed.
Workshop 3
June 10, 2011 31 attendees The June 10th workshop focused on synthesizing the results of a survey conducted of all prior workshop participants and invitees from both the Opportunity Assessment and the Regional Intermediary Design workshops. Respondents expressed their thoughts on the importance of each hub capability and the current regional performance.
Survey Results: Hub Capability Perceived Importance vs. Region’s Perceived Performance
1 = not important
5 = very important
1 = lagging
3 = average
5 = above average
The Detroit Region’s Opportunity
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Those surveyed identified existing obstacles to implementing a successful regional intermediary.
1 = minor challenge, 5 = major challenge
OPEN-ENDED SURVEY RESPONSES
Respondents urged the proposed intermediary to emphasize specific regional strengths. These included the airport, skilled supply chain labor, interstate highways, and the international trade corridor.
2.81
2.92
3.03
3.22
3.64
3.69
3.89
3.92
1 1.5 2 2.5 3 3.5 4 4.5
Operating Board Structure
Value Proposition Design
Promoting Hub Capabilities
Competitive Hubs
Global Perception of Region
Regional Collaboration
Funding for Infrastructure
Cultural Mindset
"Keep building the momentum
for this."
"Very important
and strategic work. Let's
get going."
"Thank you for taking on this challenge and keep up the great work!"
"This seems like a great opportunity to coalesce behind logistics and supply chain with real job generation and growth potential that plays to our strengths and capacity to perform if we will just
work together."
The Detroit Region’s Opportunity
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Workstream 2
The Chamber continues to support the work of MSU and A.T. Kearney on several pilot service bundles that will demonstrate the value proposition for moving freight through the region. A seminar was held on April 1, 2011 to present the opportunities to a diverse group of potential firms. The intermediary design workshops also encouraged attendees to refer potential firms. The objective is to identify three to five different types of client companies for the value proposition demonstration.
Workstream 3
Regional Freight Study
The design of a regional economic development strategy for the TDL sector will be informed and influenced by the outputs from the first two workstreams. In May 2011, an RFP was released to perform an extensive regional freight study.
This project undertakes a comprehensive, data-driven analysis of regional freight movements and opportunities focusing on trade corridors, trade lanes, and other corridors of opportunity. The freight study builds upon the Opportunity Assessment for a Regional Supply Chain Hub published in May 2010 by Michigan State University and the Detroit Regional Chamber.
The overall goal is to identify and develop freight-related economic development opportunities by conducting a regional freight analysis with the objectives to obtain and analyze data and forecast freight by mode of transport.
A key purpose of the study will be to develop a freight flow summary that will document existing regional freight movements by commodity, mode, volume, and value. The summary will also include, but not be limited to, freight flows from relevant corridors of competition including the Port of Halifax, Port of Montreal, and Port of Virginia. This project will also summarize economic trends and forecasts that would impact the study area and detail strengths, weaknesses, opportunities and threats that could affect freight-related economic development opportunities in the study area.
The base area of this project is defined as southeast Michigan, northwest Ohio, and southwest Ontario. This study involves truck, rail, water, and air freight flows to, from, within, and through the
The Detroit Region’s Opportunity
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region. Many freight flow origins and destinations extend beyond these boundaries, so the study must consider the linkages to state, national, and international freight systems and markets.
Key deliverables include the following:
• Document current freight flows by commodity, origin and destination, mode, volume and value
• Analyze current freight flows and identify trends by industry and corridor to anticipate future freight movement needs
• Identify deficiencies in the corridors as they relate to freight movement
• Identify key industries, major shippers, and carriers in a freight system market analysis
• Highlight value-added services currently being performed to the freight, the logistics companies currently providing these services, and how the study region could fit
• Compare the cost and timing of moving freight through this regional supply hub to the cost and timing of existing or alternative routes through other regions
• Identify freight bottlenecks and other operation and safety deficiencies
• Forecast future freight flows by corridor, mode and commodity
Based on thorough review of the submitted proposals, the Chamber has sourced the regional freight study to supply chain consulting firm TranSystems. The 14-week study will identify freight-related economic development opportunities and forecasts in the region.
Freight Infrastructure Study
Additionally, the Chamber serves on SEMCOG’s Infrastructure Study Advisory Committee. SEMCOG is leading an infrastructure study that will examine the region’s freight infrastructure from multiple perspectives. The project will assess the transportation network’s ability to supply current and future freight-intensive southeast Michigan industries with efficient and reliable goods movement. Connecting freight projects to economic development will aid in making informed decisions about how to realize the best return on investment while programming limited transportation funds while maximizing our transportation assets for their economic development potential. The Study Advisory Committee is a working group that will provide expert insights that will be used to guide the course of the study, review the study’s progress, and shape the study’s products and recommendations.
Workstream 4
As part of the TranslinkeD initiative, the Detroit Regional Chamber seeks to inform and educate regional stakeholders about the opportunity to develop the transportation, distribution, and logistics sector. Some recent opportunities for education and program outreach included:
Engineering Society of Detroit ESD Institute Global Freight Hub Symposium March 2-3, 2011 Presentation: TranslinkeD 21st Annual Wayne State University – University of Windsor Symposium “International Competition, Regulatory Coordination and the Future of the Auto Industry in North America” March 31, 2011 Presentation: Developing a Bi-National Logistics Hub
The Detroit Region’s Opportunity
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Detroit Regional Aerotropolis Branding Workshop April 7, 2011 Shape an authentic and uniquely compelling brand story to tell to new industries, investors, and supply chain businesses through future marketing and promotional efforts Mackinac Policy Conference Economic Development Breakfast June 2, 2011 Provided a Transportation, Distribution and Logistics program overview to a mix of public partners, private sector leaders and government officials. TransformeD Media Event at Southwest Solutions June 22, 2011 Vision of TranslinkeD and how this transportation/logistical hub opportunity will spur economic development in the city and region Windsor-Essex Chamber Transportation Policy Committee Member Ongoing Works regularly on transportation related issues in Windsor, Essex County, Ontario, Canada and the United States. Items related to supply and competition, framework legislation for industry, infrastructure investments, airports, highways, ports, railways and border crossings are priorities for this Committee. The Detroit Regional Chamber takes every opportunity to participate at community events and speaking engagements.
Workstream 5
The inputs for creating a unified regional TDL brand, marketing messages and marketing strategy will flow from the outputs of workstreams 1 – 4.
Website
To increase awareness of the region’s TDL potential and to develop the Detroit Regional Chamber as a trustworthy and relevant resource of information regarding the TDL industry in the region, the TranslinkeD website, www.translinkeddetroit.com, was overhauled in April and May of 2011. The site is also accessible through the Regional Initiatives portion of www.detroitchamber.com. Website content was reorganized and the copy was rewritten. A real-time stream of social media was incorporated to indicate fresh, ongoing activity on the front page. Slides from the presentations at the Michigan State University workshop series were added, along with updated facts and statistics about the region. The status of current TDL projects, such as the Continental Rail Gateway, the Detroit Intermodal Freight Terminal, the New International Trade Crossing and others were updated. New maps, studies, and other resources were added as well.
Social Media
Social media efforts for TranslinkeD were enhanced in order to engage the public and increase awareness of the initiative. A revamping of the TranslinkeD initiative’s Twitter account led to an increase in followers by more than 100 percent from April to August. To keep TranslinkeD staff aware of the latest news and information related to the TDL industry in the region, several Google Alerts were set up to alert staff on a daily basis when relevant articles are published on the web. TranslinkeD posts tweets many times each day, linking followers to articles about freight
The Detroit Region’s Opportunity
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and supply chain in the region along with breaking news regarding the initiative. The steady stream of information appears on the TranslinkeD Twitter feed and on the TranslinkeD home page. This establishes TranslinkeD as a source of up-to-the-minute news and information on the industry, adding to the initiative’s credibility while increasing awareness of the area’s TDL assets and updating the public on the work taking place through the initiative. Several prominent outlets have posted re-tweets from TranslinkeD to their own Twitter followers, including Governor Snyder’s communications director Geralyn Lasher, Macomb County executive Mark Hackel, the Detroit News Hub, the Detroit Free Press and others.
Newsletter
Over 1,300 individuals who have indicated an interest in the transportation industry and subscribed to the TranslinkeD e-newsletter are contained in the Detroit Regional Chamber’s constituent database. On May 28 and July 27, e-newsletters were sent to these subscribers to keep them up-to-date on the initiative’s work. The open rate for these e-mails averaged 15.5%, which is consistent with Business and Finance sector industry averages (Source: http://mailchimp.com/resources/research). The click-through rate was over 25% of those readers, almost ten times higher than industry average, indicating that readers are actively engaged and curious about TDL in the region. On the days the e-newsletters were sent, website traffic spiked to more than four times the daily average.
Workstream 6
In recent months, the Chamber has made key hires that are critical to the success of the TranslinkeD initiative.
Benjamin Erulkar will serve as the Chamber’s new Senior Vice President of Economic Development. Erulkar recently served as Senior Advisor to the U.S. Chamber of Commerce where he directed the Corporate Community Investment Program for ‘Fortune 500’ members of the U.S. Chamber’s Business Civic Leadership Center. Previously, he served as U.S. Deputy Assistant Secretary of Commerce for Economic Development during the Bush Administration. In this role, Erulkar directed and coordinated all operations of the U.S. Economic Development Administration (EDA). Erulkar holds degrees from Harvard University (AB), John Hopkins University (MA) and University of Pennsylvania Law School (JD).
Erulkar’s economic development experience and leadership will serve to ensure that the TranslinkeD initiative, as part of the Chamber’s broader economic development effort, will play a major role in job creation and investment.
The Detroit Region’s Opportunity
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In April, Kerry Sharp joined the DRC as the TranslinkeD Program Coordinator. Sharp previously worked for United Way for Southeastern Michigan as a Blended Funding Associate and Compliance Manager. In this role, she managed fifteen nonprofit agencies who received funding from UWSEM and Wayne County, ensured their compliance with grant requirements, streamlined reporting processes and built relationships with funders and fundees. She has an extensive communications background and experience in promotion, branding, messaging, development and execution of communication strategies. Sharp holds a B.S. in Advertising and Public Relations from Grand Valley State University.
In her new role, Sharp develops consistent and continuous messaging regarding the region and its supply chain capabilities. She develops connections to key audiences and communicates information about activities and accomplishments.
SIGNIFICANT EVENTS OR CONDITIONS THAT HAVE IMPACTED ABILITY TO MEET PROJECT OBJECTIVES There have been none to date.
ADDITIONAL INFORMATION THAT MAY BE OF INTEREST TranslinkeD is in the process of developing a comprehensive organizational structure that will seamlessly integrate all regional logistics initiatives while maintaining momentum. This structure will allow the region to speak with one voice to key partners and customers internal and external to the region.
The Detroit Region’s Opportunity
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APPENDIX A: FINANCIAL SUMMARY
Detroit Regional Chamber Foundation
TranslinkeD Department 53721 Report
As of June 30, 2011
Revenue and Expenditures Report
Oct 2010 - Sep 2012 Budget Oct 2010 - Jun 2011 Actual
Amount Percentage Amount Percentage
NEI Revenue $ 270,252.00 31% $ 50,921.21 36%
Chamber I/C Revenue 492,303.00 57% 80,739.86 57%
MEDC Revenue 99,878.00 12% 9,987.80 7%
Total Revenue $ 862,433.00 100.0% $ 141,648.87 100.0%
Salaries $ 366,843.00 42.5% $ 94,556.36 66.8%
Fringes 80,705.00 9.4% 15,755.71 11.1%
Travel 30,000.00 3.5% 10,967.61 7.7%
Hosting Seminars 16,000.00 1.9% 3,501.04 2.5%
Office Supplies 4,000.00 0.5% 957.61 0.7%
Postage 2,000.00 0.2% 0.44 0.0%
Printing 10,000.00 1.2% - 0.0%
Marketing Payments 122,130.00 14.2% - 0.0%
Contractual 150,000.00 17.4% 2,575.00 1.8%
Indirect Admin 80,755.00 9.4% 13,262.70 9.4%
Total Expense $ 862,433.00 100.0% $ 141,576.47 100.0%
Reconciliation of Payments Received and Amounts Deferred
Source of Funds Received Revenue Deferred
NEI $ 156,747.00 $ (50,921.21) $ 105,825.79
MEDC 9,987.80 (9,987.80) -
Total $ 166,734.80 $ (60,909.01) $ 105,825.79
Amount in Deferred Account 4000-53721.20 105,825.79
Amount to Reconcile $ -
The Detroit Region’s Opportunity
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APPENDIX B: TRANSLINKED PROJECT MAP
Project Who’s Involved Actual or Expected Outcomes
MSU/DRC Phase I Workshops(Series of 3)
100+ TDL professionals, public/private stakeholders, academics & economic
developers from across the region
Completed May 2010 Opportunity assessment identified potential
for 66K jobs, $10B investment over 10 years
MSU/DRC Supply Chain Intermediary Design
Workshops(Series of 3)
100+ TDL professionals, public/private stakeholders, academics & economic
developers from across the region
Completed June 2011 Identified benchmarking info Characteristics of an intermediary Regional capability assessment
TranslinkeD Freight Study DRC and vendor (TBD)
To be completed Fall 2011 Analysis of trade corridors Quantification of impact Development of value proposition Targeting shippers that will benefit from the
region
Infrastructure Study SEMCOG
To be completed Spring 2012 Document supply chain & transportation
conditions Prioritize infrastructure investments
Pilot ProjectMichigan State University
3-5 shippers
Selection process underway for pilot companies
Assess pilot company’s current supply chain Implement improved supply chain strategy Develop value proposition
Past: W
hat’s
been done
Present: W
hat’s
happening now
Future: What we
need to do
Executive Steering Committee
CEO-level stakeholders Guide & direct strategic plan Engage broad support Lead intermediary design and implementation
Status of Coordinated Work Efforts
Current State of the
Detroit Region:
$1.6 billion in goods cross the border daily and
235,000 TDL jobs exist
Opportunity:
66,000 new jobs and $10 billion in investment within
10 years
Goal:
Creation of a Transportation, Distribution
& Logistics Cluster of Excellence
The Detroit Region’s Opportunity
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APPENDIX C: PROJECTED STRATEGIC OUTCOMES
Local
≅ Local marketing & community outreach≅ Streamlined government & regional collaboration≅ Pilot implementation focused on leveraging business
partnerships
Multi-State & Multi-National
≅ Multi-state & multi-national collaborative board≅ Multi-state & multi-national strategic asset,
infrastructure & transportation plan≅ Global branding, marketing & communication plan≅ Supply chain management talent development
Strategic Initiatives: Transportation, Distribution & Logistics
Regional Intermediary
Assets & Infrastructure Integration
Build on Existing Strengths
≅ International trade corridor≅ Airports≅ Supply chain skilled labor≅ Interstate highways≅ Border crossing facilities≅ Railroad network
Economic Development
Driven By:
≅ Shared, collaborative, and transparent approach≅ Pilots to validate value proposition≅ Policy refinement≅ Job creation
Marketing & Communication
“Supply Chain Hub”
≅ Branding the geographic region≅ Changing the cultural mindset≅ Putting the region “on the map”
Talent & EducationWorkforce Assets
≅ Top supply chain management educational programs≅ Availability of human capital