Posts Tagged ‘economic development’

Thoughts on the Future of Freight Infrastructure and Corridors

Monday, November 8th, 2010

Earlier this year, I received a link to an article in Site Selection Magazine that referenced the 2010 ITTS Freight in the Southeast Conference.  (http://www.siteselection.com/ssinsider/snapshot/intersection.htm).  What caught my notice was the reference to the  comments from various speakers.  Also, the AASHTO Journal did a similar small writeup on the Conference in February (http://www.aashtojournal.org/Pages/021910freight.aspx).

Both articles stressed the importance of examining freight and transportation. The lead article in the Site Selection magazine site was a good wrap-up of what I believe – we are in the midst of a transformational shift in our culture, especially when it comes to examining a more proactive, pro business framework to create and develop jobs for our regions.  (Look at the Governor’s Cup contest in Site Selection Magazine.)

The AASHTO journal stressed the belief I have that the Southeast has the latent capacity to lead the U.S. out of its current economic stagnation.  While I don’t believe we will be returning to the heady days of 2007 any time soon, the Southeast, with its proximity to transportation, labor issues, economic conditions, incentives, etc., should be the leader in the future of the U.S.  These comments were echoed by a great cover from the Economist Magazine of a old, bewildered surfer, representing California, watching a young cowboy charge ahead into the waves.  (The Economist, July 11-17th, 2009.)  While Texas is not in the ITTS region, it does speak about the regional shift that is occurring from the traditionally dynamic engines of growth to new, and as of yet, undeveloped regions.

At a AASHTO meeting in Biloxi in October, 2010, I spoke at the Special Committee on Intermodal Transportation and Economic Expansion.  Constrained by time, I distilled down my observations into five main points:

  1. Logistics and economic development are seen as innovative ways to both create jobs while providing access to local businesses,
  2. The role of ports and hinterlands is becoming more important, especially as rural regions want access to global markets,
  3. The role of exports remains a critical element in any future U.S. economic expansion,
  4. The result of these trends is that people see intermodal connections as critical, especially corridors, with new opportunities for those who can capitalize on them (for example, the Panama Canal expansion),
  5. The challenges to making this a reality remain legacy obligations,  a lack of linking strategic needs to projects, and funding.

Going forward, papers like the Southern Growth Policies Board “The Road to Recovery… is Named Main Street”, or the 2010 Georgia Logistics Summit, hosted by the Center of Innovation for Logistics, all highlight that we need a different way of thinking about our region and its contribution to the nation.  This contribution depends upon our access to markets.  It depends upon our region’s transportation networks.

    The Broken Triangle

    Wednesday, January 20th, 2010

    In December, I served as a panelist on a DOT listening session held in New Orleans.  I was struck by the differences regarding the perceived role of the federal, state and local governments in transportation decisions.   As in other related meetings, the discussion on personal travel dominated the session, with freight given some attention, sometimes as a method to secure public-private partnerships or for economic development.  No question, freight transportation differs from passenger travel.  Many in the freight area want to focus on point to point logistics systems, while others are attempting to improve local operations at ports, intermodal terminals, and gateways.

    Today, our nation struggles to identify its transportation future.  When the US was flush with money and political will, it was easy to build the transportation system that today serves as the nation’s backbone.  Now, an ever maturing system, with ever expanding sets of wants and needs, has pulled that system into an unworkable mass. Adding to this uncertain future is the need to balance state budgets while creating and/or retaining jobs.  In some ways, the rush to settle everything in this round of reauthorization seems problematic, given the differences of opinion as to the nature of the federal role in transportation infrastructure funding.  However, for the “transportation issue” to really be settled, I think the greatest barrier lies at the State level, in what I call “the broken triangle”.

    How will a State prioritize its needs to sustain or promote economic opportunities will depend upon how much weight the State gives to balancing spending in one of three areas: legacy obligations, where money is flows to previously approved projects that may or may not be prudent today given the changing world, (Congress has identified several corridors that may never get built); new strategic investment, such as finding ways to spend money that mirrors a more private sector investment strategy with expected benefits and outcomes; and finally, a wholly passenger movement strategy, in essence turning away from the previous investment in highways as a lost cause, to focus on light and high-speed rail.  Each of these three areas however must be executed through the work of three agencies, which form the real triangle: State Legislators, Departments of Transportation and Departments of Commerce.

    While not ignoring the role of governors, State legislators authorize infrastructure projects, sometimes under the direction of the DOT, and sometimes under the direction of Commerce agencies.  Departments of Transportation continue to determine and execute the projects that are beneficial to the State for congestion relief, access or safety.  Commerce agencies seek to act in the best interest of the State to provide opportunities for local businesses to compete regionally and globally.  There are different timelines, project approvals, and project delivery expectations that complicate matters in short order.

    With a passing nod to Abbott’s “Flatland”, we all seek to rise above the plane, to move seamlessly through the countryside, to/from our homes, in a cost and time effective manner.  The question is, how do we transform a broken triangle into an arrowhead that focuses everyone in linking transportation and the economy? The new battle for economic development centers on logistics and connectivity, what “Butch” Brown, Executive Director, Mississippi DOT, and President, of AASHTO calls the “Transeconomy”.  Global economic pressures are forcing corridors to be more important, especially given the nature of evolving supply chains.  This means a new approach to examining freight and economic development will be critical, but one that recognizes that effective, and not equity, based decision making will be needed to generate the opportunities that everyone seeks.

    Lambert’s Lagniappe – June 2009

    Tuesday, August 25th, 2009

    A few weeks ago I was asked to do a short presentation on Green Transportation at Southern Mississippi. (The presentation is available at http://www.ittsresearch. org/ITTS-Presentations.html). The presentation consisted of a very broad overview of logistics, economic development and the environment, which generated a lively debate.In discussing economic development, we are really talking about people development.

    I agree with Thomas Friedman in “Hot Flat and Crowded” that we need to reinvest in the creation of energy here in the United States. The recent edition of Good Magazine was dedicated to transportation,
    but while it discussed jet packs and electric cars, it did not discuss freight transportation. There remains a disconnect when we discuss freight transportation and the environment. On the negative side, the
    debate on emissions, the detrimental effects of development/traffic (congestion) or the simple fact that we don’t live as we once did. In response, the real discussion that freight is critical to our standard of living evolves into simply discussions about more efficient engines for trucks, rail and barges.

    This extends further to modal comparisons about tons moved per mile or emissions per mile (as highlighted by the Texas Transportation Institute Study for Marad. All of these discussions are important, both as we determine a long term strategy and short term steps to move towards a freight and mobility vision (as evidenced by yet another national report calling for an increased focus on transportation reform – The National Transportation Policy Project).

    This weekend, I was struck by the irony of the timing of the presentation with its proximity to Fathers’ Day. When discussing the future of transportation, our children will face increased challenges on energy use and the environment. At the same time, we are discussing how to enhance America’s competitive position in world markets. Their future success will be shaped by our actions today, just as the legacy decisions of our fathers continue to shape our world. When considering how we choose to live, we must include all modes of transportation, including freight, that supports America’s long term growth.

    Lambert’s Lagniappe – April 09

    Tuesday, August 25th, 2009

    Over the past few weeks, the question of the economic recovery and small business has been in the news. According to statistics from the U.S. Department of Commerce, firms engaged in exports tend to pay higher salaries and employ slightly more employees than non-exporting firms in similar industries. During 2007, The U.S. Commerce Department estimated that 266,547 U.S. firms were engaged in exports (excluding service only exporters). Of these firms, 106,559 were from the 13 ITTS Alliance States, accounting for 40% of the total number of  exporting firms.  Florida led all Alliance members in total exporters followed by Georgia.

    When compared to total value, firms in the Alliance region only accounted for 21% of the U.S. total export activity. Florida again led the region in total value, followed by Louisiana and North Carolina. In 2006, Commerce estimated that there were 239,287 Small and Medium Sized business establishments (firms with less than 500 workers) which actively exported. In the Alliance Region, there were an estimated 60,965 SME firms engaged in export markets.  Having more firms engaged in international trade will be important in the economic recovery, although export volumes have declined sharply over the past few months. There is some hope, that these firms will remain committed to international trade once the economy recovers.