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Marketing PlanShipping on the Great Lakes
The University of ToledoNovember 7, 2006
IntermodalTransportation Institute
• U.S. transportation system is overwhelmed– Passenger vehicle traffic will increase 50% by 2020– Freight traffic will increase by more than 50% by 2020
• Cannot build enough highways and rail to meet demand
• China to become top US trading partner within three years
• Imports from Asia/China growing rapidly• US DOT has serious concerns about US distribution
system
Situational Analysis
• New hours of service rules• High fuel costs• Shortage of drivers and equipment• Increased costs of drayage/cartage• Increased highway congestion
Trucking industry is challenged by:
The Great Lakes: AnUnderutilized Resource
Framework for a Marketing Plan
• Opportunities
• Constraints
• Process
• Participants
• Outcomes
• Who is responsible for execution
Opportunities• Intra-lakes shipping (includes Canada & US)
– Cope with highway and rail congestion– Identify market segments well served by Great
Lakes shipping
• International trade– Seaway access– West coast access– Gulf coast access
We are working to get the data to assess opportunities
We have a good start on the data from the Upper Midwest States
Freight Study
Upper Midwest Highways
Projected Interstate Truck Traffic: 2010
Congestion on the Highways
• Traffic on I-80/90– Sample data from Upper Midwest States:
Projected Average of 14,700 Daily Truck Trips
on I-80 / I-90 between Cleveland and Chicago by 2010
Upper Midwest Rail Map
Rail Congestion• Rail shipment: Containers or bulk cargo on
ship– Sample data from Upper Midwest States
ORIGIN DESTINATION COMMODITY $Millions KtonsDetroit Chicago Basic chemicals 0.217 8.930Detroit Chicago Coal & n.e.c. 116.052 541.726Detroit Chicago Machinery 234.064 40.407Detroit Chicago Motorized vehicles 212.024 39.070Detroit Chicago Nonmetallic minerals 1.395 146.783Detroit Chicago Plastics/rubber 2.021 0.310Detroit Chicago Waste/scrap 19.649 526.151Buffalo Chicago Base metals 18.529 14.691Buffalo Chicago Basic chemicals 5.906 141.612Cleveland Chicago Base metals 14.334 78.851Cleveland Chicago Basic chemicals 47.741 52.862
Upper MidwestIntermodal Sites
Dock FacilityRailroad DepotIntermodal Facility
International Trade
The Emergence of Global Sourcing
Current East to West Route for Container into the Midwest
Alternate Routes for East to West Trade
1. Prince Rupert2. Canso 3. Mexican West Coast4. Panama to New Orleans
Constraints
• Operating season
• Scheduled service
• Other
Process• Leadership:
– GLMRI at University of Minnesota Duluth and University of Wisconsin Superior
– ITI and GISAG at University of Toledo– ICHCA International Limited
• Data-based analysis of current and potential markets
• Broad participation
• Information is public and available to all
• Other
Participants
• Shippers
• Carriers
• Maritime Labor
• Port Authorities
• Federal and state agencies
• Other
Outcomes• Market Segments are Identified
– Tonnage– Cargo value– Frequency
• Key decision makers for each segment are identified
• Sales approach and marketing plan for each identified segment
• Other
Who is responsible for execution