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July 20, 2012
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Metropolitan Chicago’s Freight Cluster Part 1, Infrastructure

Note:This is the first in a three-part Policy Updates series onMetropolitan Chicago's Freight Cluster: A Drill-Down Report on Infrastructure, Innovation, and Workforce:

Metropolitan Chicago's Freight Cluster Part 1, Infrastructure

Metropolitan Chicago's Freight Cluser Part 2, Innovation

Metropolitan Chicago's Freight Cluster Part 3, Workforce

Between a quarter and a third of all freight tonnage in the U.S. originates, terminates, or passes through the Chicago region. With freight demand expected to double nationally in the next 20 years, the metropolitan Chicago region faces the choice to build upon or risk losing its competitive advantage as the nation's freight hub. Congestion in metropolitan Chicago is already severe. Steps must be taken to improve regional coordination of infrastructure and policies to support freight before less-congested metropolitan hubs overtake us.

Metropolitan Chicago's Freight Cluster: A Drill-Down Report on Infrastructure, Innovation, and Workforce, recently released by CMAP, identifies major issues affecting the cluster's competitive advantage in the 21st Century. Three distinct areas – infrastructure, innovation, and workforce – have considerable potential to influence the future trajectory of the regional cluster. While the report was briefly summarized in a recent Policy Update, this blog explores the report's findings on freight infrastructure, and upcoming blogs will focus on the innovation and workforce components of the report.

About half of all intermodal traffic in the U.S. moves through greater Chicago, making the region the largest intermodal container handler in the western hemisphere in 2010. The region's standing as the freight crossroads of the nation attracts private industry and jobs for the regional economy, yet freight also contributes to regional congestion. Metropolitan Chicago is already among the most congested regions in the nation. In the next 30 years the region will add over two million people and more than one million jobs, and by 2040 one billion additional tons of freight will move through the region each year. These increases will exacerbate congestion along a shared transportation system already facing mobility constraints.

Less-congested regions, especially Memphis and Kansas City, are devoting significant resources to improving their freight infrastructure. Carriers in Memphis have invested over $500 million in upgrading or constructing tracks and new intermodal facilities, while in Kansas City four new intermodal logistics parks have recently been opened or significantly upgraded. So at the same time that mobility constraints threaten to undermine the vitality of metro Chicago's freight cluster, competitor regions are poised to capture future freight flow and thus related freight employment.

Improving regional mobility will be imperative to position Chicago's regional freight cluster for future growth. Like other parts of the country, our region faces serious challenges in financing infrastructure improvements, as the rising cost of construction and operations has significantly undercut the purchasing power of federal and state motor fuel tax receipts. Moreover, scarce transportation resources are not always allocated based on performance-driven criteria. As such, the sources for financing transportation infrastructure are not keeping pace with the demand for maintenance, modernization, and expansion.

Despite these challenges in financing freight infrastructure, the region also has a tremendous opportunity to preserve its status as a national freight hub. The freight cluster report highlights GO TO 2040 and CREATE as two such opportunities to improve regional mobility. GO TO 2040 discusses infrastructure in the region at length and recommends a series of actionable items to modernize the existing system, invest in public transit to alleviate some of the pressure on the regional road network, establish user fees to manage demand, and focus on a handful of major capital projects that have the most potential to maximize regional mobility. CREATE (Chicago Region Environmental and Transportation Efficiency Program) is a public-private partnership between national, state, and local transportation agencies and the nation's private freight railroads to fund rail infrastructure improvement in the region. CREATE represents the first time that the public sector has partnered with the private rail industry on such a scale. In response to funding setbacks, regional stakeholders have increased their commitment to the program. This ability to draw on a variety of sources even in a difficult fiscal environment shows the promise of public-private partnerships.

CMAP's freight cluster report concludes with three infrastructure implementation action areas, highlighting public-private partnerships in particular as being well-suited to help move infrastructure projects forward. The three action areas call for:

  • System Coordination through a possible freight authority that acts as the unified voice for freight and builds on the region's multimodal strength.
  • Innovative Financing such as a freight transfer fee to be implemented in the region. Furthermore, new strategic partnerships are needed between private and public entities to move projects to completion.
  • Coordinated Land Use to preserve the availability of land best suited for freight needs. This will only be accomplished by establishing collaboration between regional municipalities.

To read more about infrastructure and freight in the region, as well as opportunities moving forward for coordinated action, check out CMAP's freight cluster summary report as well as a companion technical document.


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