The Transportation of the Future….
When I first took the wheel with my dad in the passenger seat, I remember him thinking he had his own brake pedal and his first driving advice as I wobbled in and out of my lane... "You need to keep your eyes further down the road to stay in between the lines."
For my final post, I would like to leave on a particular note for all of us to think toward the future. Not next year or even the next ten years. Think 20, 50 or even 100 years from now. That’s really the nature of the transportation and infrastructure game.
There are many exciting proposals that could change the face of the Detroit Region, both physically and economically. Aerotropolis, transforming Detroit into a logistics hub, the Ann Arbor to Detroit passenger rail, new rails to trails projects and really countless others that are all currently "in discussion." Many of these issues are political – simply because there are limited resources and not everything will come to fruition. Actually, the news that will hit the papers will be whether or not I-75 is expanded, if there is another exit off of 696 or how much the bill will be for the next budget year.
The daily, annual and immediate future needs our attention, but as we allocate billions each year to our thousands of projects, we need to consistently think about how those investments provide a future return to our region. As the nature of air travel changes, trade across land and through our borders increases exponentially and our style of living changes, we have to ask ourselves if the infrastructure we had been building in the past will suit us going forward.
Making the Investment
Current Conditions
Because of our big infrastructure needs in the Detroit Region, we have big bills. To give you an idea, here are some statistics from SEMCOG to put it perspective:
- 37,000 miles of public and local roads
- 3,551 bridges – 1,164 of which are deficient (down from 1,251 in 2000)
- Over $70 billion in road and transit needs
- Only $40 available in current revenue streams
SEMCOG has developed a nationally recognized asset management program that considers all of the regional transportation assets, their condition and how to best effectively maintain those assets. Effectively, this aggregates all of our individual needs into one big picture to see how it all works together. There is, as illustrated from the statistics, a much greater need than available funds. As with any budgeting process, this means priorities must be made.
Planning for the Future
When planning for retirement or investing for any particular purpose, your financial advisor will always start by asking about your goals. Those goals could be anything from your kid’s college to early retirement, but the root of the question is to figure out how much you need and how much time you have to get to that point.
The same is true for our infrastructure. We could plod along, reacting to another congested roadway or deteriorating bridge, all the while not improving the mobility and effectiveness of our system. Alternatively, we could decide what our economy and our citizens need to thrive in the long run and implement projects that nourish those needs.
Policy Implications
Two themes dominate the transportation landscape in Lansing today (actually, there are many more…but right this second, it’s two): planning and funding.
On the funding side, the Public Private Partnership (P3) has been eyed as the next solution to our unlimited wants and very limited budget. A number of regions have used this solution to own and operate, just operate or have direct input on their infrastructure assets and spending. The most successful and currently proliferated model is one in which a private entity manages a particular public asset.
On the planning side, the DRIC (Detroit River International Crossing), a study to look at an additional Detroit-Windsor border crossing, is stacking up support and opposition throughout the legislature. Unfortunately, this discussion has become emotional and that’s not what it’s about. In the next 30 years, total US-Canada trade by truck is expected to increase by 128% and vehicle traffic could climb by 57%. Research has indicated that the Detroit-Windsor border crossing could reach capacity as early as 2015.
Both discussions are centered in making and achieving goals for our future.That’s something any financial advisor would certainly endorse.
Hyper Regionalism
Regardless of geography, acting in concert with our neighbors just makes sense.
We’ve been beating the regionalism drum for years and years. Before we became the Detroit Regional Chamber, we were the Greater Detroit Chamber of Commerce. While there has been an improvement in the level of cooperation amongst the regional players, there is still some…ground to cover. Countless decisions affecting the health of our regional infrastructure are made at the local level. Dare I venture into the land consumption vs. population growth discussion…but our region likes to consume land. As an individual who strongly believes in free will, I say let the market decide. But I also believe in responsibility for your decisions…and the simple fact is that covering more land necessitates a greater infrastructure investment and maintenance cost.
Although we’ve all paid into that investment as a region, would everyone in the region be satisfied with their return on their investment?
Building the proper mobility network requires all of the counties and municipalities working together so we are happy with our investment. But that’s not the end of it. The network we build as a region needs to link to the bigger picture.
That is the next stage of regionalism.
The massive amount of trade going across the Detroit and Port Huron borders with Ontario demonstrates that we need an infrastructure that feeds and receives from the other side of the border. Further, that trade doesn’t end in Detroit or Windsor, it continues on through I-75, I-69, I-94, 401, 402, and the commercial rail network. This is obviously not a new thought process, the numerous trade corridor alliances have that figured out. Simply put, trade corridors are mutually interested regions collaborating to insure a highly functional infrastructure that facilitates a properly functioning economy with continual access to new opportunities.
Sounds like a good investment.
Moving the Goods
Borders & Valuable Freight
Visually, anyone can see lots of trucks and people crossing our borders everyday. If there’s a back up, it’s more of a headache than a reminder of how important our daily cargo is to our local economy and to the country’s GDP. It doesn’t make the papers on a regular basis and it’s not something we hype to the nation or even visiting out-of-towners to impress them.
Conversely, anyone who visits the Port of Los Angeles or Savannah is simply aghast at the huge ships pulling in and out of port on a regular basis.
While size is impressive, value is what counts. The latest appraisal on the amount of trade crossing our borders in Detroit and Port Huron is over $160 billion. Alone, that number seems pretty impressive. Compared with the Port of Los Angeles, which stands at just over $120 billion and is ranked as the largest water port of entry, it really underscores how important this region is to the country.
While those numbers are amazing, they still don’t capture the 150,000 jobs that result from the existence of our border crossings and the number of employees making the daily trek into our hospitals, universities and automotive companies.
Transportation Attracts Attention
Even more disappointing than the lack of recognition locally, is the lack of recognition federally. Over the last year, the federal government designated a number of High Priority Trade Corridors, which corresponded to supportive funding. The only recognized corridor even remotely related to Michigan and the trade coming in from Canada was the I-69 corridor…and the dollars paled in comparison to the other corridors. If you look at a national map of trade by volume, our region looks relatively small and insignificant. There are simply massive amounts of goods moving out of Los Angeles into Louisville, Kansas City and Chicago.
Again, size is impressive, but value makes our GDP. It’s vital for our region to communicate the importance of our border to ourselves, the national business community and the federal government. There might be millions of Barbie dolls, Nikes and pants moving along the east-west corridors, but the products pumping out of Detroit are worth billions.
Transportation – the Circulatory System for Our Region
I’ve been a proud and faithful employee of the Detroit Regional Chamber for almost nine years. Those nine years have molded, mentored and nurtured my career to what it is today. Beginning in the business development area, my interest piqued in policy when I found there were a number of structural roadblocks to attracting and retaining business, not just in the Detroit Region, but Michigan in general. As home to the automotive industry, we have a distinct advantage of housing the world’s best logistics and supply chain experts. With a border that carries the most trade across any land port in North America, we have a connection to not only the North American market, but the global market. How we move anything into, through and out of this region is crucial to our economy and the prosperity of our citizens.
Transportation – a Rorschach Test
My foray into transportation issues for the Chamber a year ago flooded my plate with a whole new set of challenges and learning opportunities.Anytime I take on a new issue, I like to learn as much as I can through standard research and reading and by talking to people who are engaged in that particular business.The one thing that struck me immediately about transportation is that depending on your audience, there is one mode or one issue that embodies the word transportation. If I’m talking to UPS, they talk about logistics and supply chain, if it’s a conversation with Transit Riders United, their obvious concern is transit.There are a number of other examples (rail, ports, air…) where the word transportation conjures up a specific issue.
Transportation – The Big Picture
Many people associate the Detroit Regional Chamber’s number one transportation priority as transit, through our DARTA initiative. DARTA (Detroit Area Regional Transit Authority) died a slow painful death in the last state administration and then during a later attempt in the court system. Painful for us because we had put so much into the project and equally painful for the all of its supporters who were finally hopeful that transit in Detroit could be regional, strategic and have a broader appeal. As an occasional bus rider and someone who really values other transit systems, it was also personally heartbreaking.
While that was tough, the transportation story is not even close to complete for the Detroit Region. Transit was important to us because it meant the seamless movement of people through the region. All transportation issues are important to us because the business community depends on it everyday. If the components don’t reach the Mack Avenue plant, there will be no Jeep Grand Cherokees to sell. If the material doesn’t get to Lear, there won’t be any seating systems. If the paint doesn’t get to the Rouge Plant, the trucks can’t go to market. It seems obvious here, but what if the coal can’t reach the power plant? Or what if the produce can’t come in from California? What happens when you don’t have Internet access? No email. Yes, information is key to this discussion too. Getting stuck in a traffic jam on 696 in the morning seems like an individual frustration, but if that means a delay of 40,000 workers by 20 minutes to all sorts of workplaces, what is the impact to our output and our economic health? Huge.