The Center for Michigan
By Phil Power
This may sound too good to be true, but it is true: Michigan could easily transform itself into a global freight gateway that could create more than 200,000 jobs and add billions in economic activity.
And this could all happen within the next decade.
If we play our cards right and this all works out, Michigan could suddenly acquire an entirely new economic dimension. The key involves creating a new manufacturing powerhouse and a “multi-modal logistical hub.” That‘s a fancy term for a place that brings together air, rail, water and road transportation systems; brings them together, that is, for a purpose:
To move freight to and from the Midwest faster and cheaper than it can be done from any other place — including Chicago.
Work to make this happen is going on behind the scenes right now and there are lots of moving parts, but here’s a summary:
- Aerotropolis – The idea is to link passenger traffic at Detroit Metro with the freight capability at Willow Run Airport, just a few miles to the west. In between, there are 27,000 acres of underdeveloped land. This land offers great possibilities for warehouses, offices, high-value light manufacturing and engineering. What’s more, they’d be right next to two major airports for shipping.
Wayne County Executive Robert Ficano has worked hard on this project for many months. As a result, the nonprofit Aerotropolis Development Corp. is a reality. What’s more, thanks to newly signed legislation, it is eligible to receive incentives from the Michigan Economic Development Corp.
Slowly, this seems to be coming together. A marketing campaign is being developed. A few companies already have started clustering around Metro Airport. General Electric recently announced plans to spend $100 million on a research and engineering facility, for example.
How big could this be? Best estimates are that the Aerotropolis could, over a 20-year period, generate 65,000 jobs, $3.7 billion in wages and $10 billion in new economic activity. Schiphol Airport, near Amsterdam, has done that well — and many experts say Southeast Michigan offers the best potential in the world.
- Great Lakes Global Freight Gateway — Promoted by Michael Belzer, a professor at Wayne State University and an expert on the economics of rail freight, the Gateway would link the Canadian deep-water port of Halifax, Nova Scotia, and river port of Montreal, Quebec, with the freight handling networks of Southeast Michigan via the Canadian National rail network terminating at Windsor.
The main recent development in international freight is “containerization.” That’s a system where big containers filled with stuff are loaded onto ships. Once they cross the ocean, they are unloaded directly onto 18-wheelers for distribution.
Halifax is a top deep-water port on the Atlantic seaboard, and the Canadian government is spending big bucks upgrading port facilities at both Halifax and Montreal. What does this have to do with us? Belzer calculates that the Gateway could shorten international shipping time by days. This could also reduce distribution costs by as much as 20 percent, thereby shortening supply chains for all Michigan manufacturing, agricultural and distribution businesses.
“It’s all about the cost per container,” Belzer told me. How big a deal is this? He believes a development like the Gateway could allow the auto industry to cut costs by as much as $800 per car.
Belzer predicts a rail-based, inland Gateway port in Southeast Michigan could produce nearly 75,000 direct jobs and another 150,000 indirect jobs.
- Bridges across the Detroit River — Ignore the squabble over whose bridge will get built. Regardless of the Moroun family’s opposition to a public-private joint venture among the United States, Michigan and Canada, there will be another bridge in the future. The Ambassador Bridge is old and inadequate, as well as disgracefully monopolistic.
The New International Trade Crossing, the public-private partnership promoted by the governor, will be needed, especially if the Aerotropolis and the Great Lakes Freight Gateway happen.
- Continental Rail Gateway — The current rail tunnel under the Detroit River is inadequate to handle the double-stacked containers and modern, multi-level rail cars used by shippers and the auto industry. And that spells potential economic disaster. Marge Byington, a political and business heavyweight from Grand Rapids who is the executive director for corporate affairs for the Rail Gateway, says 90 percent of the world’s goods travel by container.
“We’ve got to scale our infrastructure to adapt to reality,” she argues.
The Canadians are working hard on that: A joint venture among the Windsor Port Authority, Borealis Infrastructure and Canadian Pacific railway, the Rail Gateway intends to build a new, wider rail tunnel. The existing tunnel was last enlarged in 1994, and can’t be further expanded. And it is heavily used already, handling 25 trains per day and 350,000-plus rail cars a year.
Byington is enthusiastic about the area’s potential: “We’ve got a system nearly built sitting in waiting: I don’t think there is any place in the world with this potential, especially since the United States and Canada are already the world’s largest trading partners.”
But she is also frustrated: “The potential here is for thousands and thousands of jobs. I simply cannot understand why we’re not making this our No. 1 priority.”
Wayne County’s Ficano agrees. “We’ve got to change the paradigm of freight shipping in this area. The traditional route is through Chicago, but Chicago is out of capacity. Far better to do what’s necessary with all the potential here: Rail, road, water, air. That’s going to make Michigan businesses far more competitive and it’s going to make logistics a complete game-changer for Michigan,” he said.
They are right. How can we turn our backs on a potential 200,000 jobs within a decade? This is by far the biggest economic development project on the horizon, and it’s within our grasp. So why isn’t it happening?
The project needs an enforcer.
Whenever you have a development with this many moving parts, you must have a ramrod authorized to bang heads together, push differing jurisdictions and keep an eye on the big picture. “We’ve got to have a champion — not just an engineer, but somebody who has a political compass to … avoid the land mines,” Ficano said.
Regrettably, the Granholm administration never did anything to make any of this happen. But there are indications the Snyder administration is far more receptive. Mike Finney, the head of MEDC, says he’s ready to move. Practical Democrats such as Ficano say they’re ready to work with anybody to get things done.
My suggestion to the governor is simple: Appoint somebody to be the state’s “big dawg” for the future — somebody with political smarts, lots of guts, an impatient character and a passion for big-picture change. My candidate: Joe Schwarz.
Schwarz has served in the Navy, the CIA, the Congress and the Michigan Legislature. He’s now practicing medicine in Battle Creek and anxious for something he can get his teeth into. Joe told me last Friday he wouldn’t turn it down.
Gov. Rick Snyder, are you reading this?