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Economy & competitive position

Economists pitch Halifax-Detroit freight link

Detroit could become a major inland port by establishing a rail link with the expanding deepwater port of Halifax, Nova Scotia, say three Michigan economists who have formed a nonprofit group to promote the idea.

The Great Lakes Global Freight Gateway ultimately could create 150,000 jobs associated with transporting billions of dollars of auto parts, chemicals, agricultural products and finished goods sold by major retailers throughout the Midwest, backers say.

Establishing the new shipping link is the brainchild of Wayne State University economist and transportation expert Michael Belzer, who serves as CEO of the Gateway project.

His partners are John Sase, a Royal Oak-based independent economist, and Karl Gregory, a retired Oakland University economist.

“There are major changes coming in the modal structure of transporting freight,” Belzer said. “I think we have a chance to play a big role in this, but only if we act quickly.”

But the gateway project faces numerous hurdles, including a reluctance by the Michigan Economic Development Corp. to provide the level of funding Belzer says is necessary to start work on it.

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He has asked the MEDC for $3 million over the next two years to pay his salary, assess the condition of the rail infrastructure and start lining up customers for the route.

“Once Michigan makes a decision, we can start discussions,” he said.

But a top MEDC official said the agency wants to carefully assess the Gateway project and others that are promoting Southeast Michigan as a major Midwest transportation and logistics hub before taking action.

Doug Smith, senior vice president of strategic partnerships at the MEDC, also said the agency is reluctant to fund Belzer’s full $3 million request.

“I don’t see us putting that kind of money into anybody at this point in time,” Smith said. “I don’t think it’s going to be of that magnitude.”

The MEDC and the state Transportation Department are planning to meet with the backers of the various freight and passenger transportation proposals in the next several months and determine if they can be better coordinated, Smith said.

“We need to figure out what the state’s role in this is,” he said. “We need to look at a broad-picture strategy for all forms of transportation.”

But Smith said he thinks the Halifax proposal is “intriguing” and “there’s some urgency to it.

A separate initiative, the Great Lakes International Trade and Transport Hub, is working with trade and port officials in Halifax to create a transportation hub serving what it calls the Detroit-Flint-Lansing “triangle.”

Led by Michigan State University, the Prima Civitas Foundation in Lansing and Dalhousie University in Halifax, the hub is promoting the coordination of a variety of transportation and logistics assets to grow global trade with Michigan.

Belzer said there’s a lucrative opportunity to ship goods throughout the Midwest using a rail link between Detroit and Halifax because of the larger container ships that will carry goods and commodities.

Halifax is just one of two eastern ports with water deep enough to handle the so-called “Ultra Post-Panamax” container ships that will be launched in 2014. The other port is at Newport News, Va.

Ultra Post-Panamax is industry jargon for ships that are too large to pass through the Panama Canal.

Halifax also has an on-dock rail connection that some other ports lack, Belzer said. Under his plan, the Canadian National Railway Co. would transport cargo in its lines from Halifax 1,300 miles to Michigan using its rail tunnel in Port Huron.

Halifax Port Authority spokeswoman Elizabeth Moore wouldn’t comment on discussions between port officials and Belzer’s group, except to say that  the port considers his plan “viable.”

Belzer said Midwest customers could save between two and 11 days of shipping time and between $250 and $930 a container by using the Halifax-to-Detroit route instead of a West Coast port.

Goods coming from the West Coast can experience significant delays going through the congested Chicago rail corridor, he said.

But other states and railroads are working on efforts to connect themselves to Asian and European trade routes.

Michigan’s biggest competitive threat, Belzer said, is a new CSX Transportation intermodal train terminal in North Baltimore, Ohio, south of Bowling Green.

The $175 million terminal is expected to move about 2 million shipping containers a year among trains, trucks and ground storage units.

Ohio Lt. Gov. Mary Taylor told the Toledo Blade in June that the project has the potential to create about 2,000 spin-off jobs in logistics and warehousing. She said the terminal “symbolizes to the rest of the world that Ohio is open for business.”

On the other hand, the CSX project could be the “death knell” for Michigan’s hopes of becoming a freight transportation center, Belzer said, unless Michigan moves quickly.

A $445 million Detroit Intermodal Freight Terminal, which could serve cargo from Halifax, is in the design phase. It is being jointly developed by CSX, CN, Canadian Pacific and Norfolk Southern railways.

Experts say Halifax also will face increased competition from the larger Montreal port, as well as from New York, Baltimore, Savannah and other ports expanding to handle the new mega-ships.

But Belzer’s gateway project could gain an edge by lining up customers in the auto and other industries for the Halifax-to-Detroit route, said David Campbell, a Canadian economic development consultant.

“Promoting the Port of Halifax as a global entry point into North America has been a hard sell in recent years,” Campbell wrote recently in his blog. “Joining forces with Detroit starts to make things a lot more interesting.”

3 comments from Bridge readers.Add mine!

  1. JoeBlog

    Explain to me please again the business case for DRIC if rail will take away so much traffic!

  2. Detroit je t'aime

    Interesting (I wonder about the increase in pollution though…)! Those of who you’d like to see what cargos are like on Detroit river and what kind of stories they hide should check our short postal boat video:! Cheers!

  3. Rose Bogaert

    Your conclusions are ludicrous.

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