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Transportation, Distribution and Logistics Hub Results of Business Case Development 75-Day Plan Implementation

November 17, 2011

Background The Detroit Regional Chamber’s transportation, distribution and logistics (TDL) economic development initiative,

Translinked, held a meeting on the supply chain network on September 1, 2011 to bring together interested parties

from the public and private sector, including members of other TDL initiatives around the region. Over 90 individuals

attended the meeting at the Detroit Regional Chamber, representing economic development organizations,

educational institutions, local, county, state and Canadian governments, businesses, and others. Representatives

from Ann Arbor, Detroit, Flint, Lansing, Port Huron, Toledo, Windsor and other areas were present.

Creation of the 75-Day Plan Feedback from attendees at the September 1 meeting, as well as from a survey we distributed afterward which

received 46 responses, helped shape the activities of the Translinked initiative for the next 75 days. We created a 75-

Day Plan, aiming to develop a written value proposition and business case for the increase of freight activity and

investment in the region, built on three key pillars: private sector engagement, freight study completion, and external

outreach. The 75-Day Plan document can be downloaded at www.translinkeddetroit.com.

Accomplishments Through implementing the 75-Day Plan, Translinked achieved the following results.

Private Sector Engagement and Business Case Development: 30+ Conversations with

Freight Forwarders, Shippers, Carriers, and Trade Associations By leveraging the Detroit Regional Chamber’s relationships with the business community, we reached out to

organizations that develop and implement supply chain solutions and make decisions about freight. Most of the

individuals we talked to were high-level decision makers, experts in the field of logistics and supply chain

management who were enthusiastically willing to share their insight and knowledge with us. One CEO expressed to

us that the “subject matter of your research is near and dear to my heart, having been involved in the transportation

industry in this market for over 45 years.”

We sat down face-to-face, individually, with representatives from more than 30 organizations. We asked them a

series of questions to gain their insight in several areas. What’s working well for you in our region so far, so we know

the best way to market our assets? Where do we have room to grow? What would make your life easier from a

supply chain perspective? What do we need to do to optimize use of the U.S.-Canada border crossings in our region?

Ultimately, what would it take to get more freight traffic and business investment here?

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Below are the freight forwarders, shippers, carriers, and trade association organizations Translinked engaged during

75-Day Plan implementation.

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Private Sector Engagement and Workforce Development: TDL Employer Needs

Assessment In addition to engaging the private sector for value proposition development, Translinked began work to conduct an

employer needs assessment by soliciting TDL workforce input from company human resources executives. An RFP for

development of the TDL Workforce Hub was released September 15, 2011. The Detroit Regional Chamber’s

requested services included development and execution of an in-person interview process that would include 35-50

top employers in the TDL sector, resulting in a report with recommendations that will facilitate coordination and the

exchange of information among TDL employers, TDL educators and training programs, and workers. The report will

include analysis of current and projected future workforce needs, information on hard-to-fill positions, a description

of current recruitment processes, identification of possible skill/training needs of the incumbent workforce,

identification of best practices in recruitment/retention and possible development of career ladders within

companies, and a summary of the gaps between demand and supply of labor in the TDL industry, including low,

medium, and high skill levels. The results of this research will be combined with the results of an ongoing regional

TDL and supply chain management training and educational program inventory Translinked is conducting, along with

a preliminary survey of TDL employers that Translinked administered in 2010.

The Detroit Regional Chamber selected Manpower to complete the TDL employer needs assessment and make

recommendations for the creation of a virtual TDL Workforce Hub, a central resource connecting employers, training

organizations, employees, and entrepreneurs through a talent portal. This work will occur in coordination with the

Workforce Intelligence Network (WIN), an NEI and MEDC-funded multi-county talent initiative in southeast Michigan.

Work on the needs assessment begins November 17, 2011.

Freight Study Completion Translinked partnered with TranSystems to conduct a study on freight in the southeast Michigan, northwest Ohio,

and southwest Ontario region. The study provides a data-based analysis of how the supply chain market operates

currently in the region. It gives us a look at where the freight in our region is coming from and where it will end up,

the modes by which the freight is traveling, the types of cargo being shipped, and a prediction of what the future of

freight in our region will look like. The analysis outlines a roadmap of what is currently working well in the region,

and equally importantly, identifies legitimate opportunities for increased freight movement and investment. The

analysis identifies specific industries and shippers who will benefit. It also highlights value-added services, the

companies providing them, and how the region can fit into this system. Cost and timing of freight movements are

compared between the region and other alternative regional hubs.

TranSystems divided the study into five tasks. Task one provides an analysis of the existing freight flow. This analysis

determines freight flow patterns (origins, destinations, modes, volume, and value), logistics service requirements and

the implications for the study area. It identifies market sectors and services that offer the greatest potential for the

region. Task two identifies industry trends and opportunities for future growth. This task looks at the potential growth

in existing industries in the region as well as other industries that could be attracted to the region, and it determines

the supply chain and site selection requirements to attract new industries. Task three, a freight forecast, combines

econometric modeling with adjustments for industry trends that may influence domestic and international cargo

movement to provide robust and defensible projections for freight movement. Task four provides a comparative

analysis of our region to other logistics hubs, looking at specific industries to see how this region compares in

providing necessary criteria to attract and provide growth opportunities to these sectors. It also compares the general

cost and timing of freight movements through this region to the cost and timing of freight movements through

alternative routes. Task five, findings and conclusions, represents a synthesis of the freight flow analysis, industry

trend research, and the region’s competitive factors to develop a comprehensive view of the market drivers that

determine what freight will move through this region and how the region can capitalize on available future

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opportunities. These outcomes will serve as the catalyst for engaging other private sector firms. DRC will publish the

final report of the study the week of December 5, 2011.

External Outreach for Input on Value Proposition Development The region already moves a tremendous amount of freight and includes an impressive array of assets. Working to

raise awareness of the region’s potential and reach out to stakeholders for input, the Detroit Regional Chamber

attended or presented at these important gatherings to increase recognition of the region’s supply chain value

proposition.

In addition to the external outreach above, contacts were developed and articles pursued at logistics publications

such as Transport Topics, Inbound Logistics, and Railway Age.

Other, Continuing Activities

Regional Collaboration

Addressing the need to develop a mechanism for regional collaboration that allows organizations to share

information in order to create synergies and avoid duplication of efforts while advancing toward the common goal of

job creation and investment, Translinked is working to on products that will facilitate this activity.

• Common calendar – Set to be housed in a new Translinked website, a shared TDL calendar will reflect all

key events, workshops, and meetings occurring both in and out of the trade region. A common calendar will

allow organizations to find opportunities to collaborate and make events more impactful.

• Data sharing site – The Detroit Regional Chamber is developing a common data management system to

provide uniform data and messaging to economic developers in the region. Wiki software is currently in the

testing stages.

• Economic development toolkit – An RFP for an economic development toolkit will be released in November.

Economic development professionals at the city, county, state, and provincial level provide the most

interaction with the private sector through their business attraction and retention efforts. Businesses are

Halifax Port Days

Eastern Border

Transportation

Coalition Workshop

TMACOG Ohio

Conference on

Freight

AIAG Customs Town

Hall

AASHTO Annual

Meeting

Great Lakes Global

Freight Gateway

Conference

GLITTH Summit West Michigan

Policy Forum

Red Hot Locations

FDI Seminar in

Toronto

Prima Civitas Radio

Show

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concerned with the total landed cost of their freight. Access to a site containing customizable, co-branded

supply chain fact sheets and collateral will give economic developers an important asset when working with

their clients.

Benchmarking and Fact Finding

To move forward with the creation of the TDL hub and TDL workforce development, the Chamber will continue with

TDL benchmarking and fact finding.

• TDL Hub Site Visits – Translinked has evaluated the site visit potential of several communities. A visit to

Columbus is planned, where we will meet with the chamber of commerce to discuss their logistics initiative,

as well as meet with workforce and talent development coordinators to learn best practices of the Columbus

region. We will also consider visits to Kansas City and Atlanta.

• Regional Education and Training Program Inventory: The Chamber has been conducting site visits to the

region’s TDL education and training programs to develop an education and training program inventory.

Educational institutions engaged so far include:

.

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Results

Value Proposition Based on our engagement with the private sector, the results of our regional freight study and our external outreach,

we have drafted a value proposition and a corresponding action plan.

Regional Supply Chain Value Proposition

What we heard: Our value as a region lies in four main categories of assets: location, infrastructure, talent, and

industry.

Market access: We reach markets of over 88 million people within a 10-hour truck drive, and we have access to

international trade through our Canadian/U.S. border crossings. We have a world-class airport system and our four

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Class I railroads allow us to service the eastern U.S., the Midwest, Canadian markets, central plains states, and the

Gulf states.

Modes: We have four Class I railroads with access to the eastern U.S., the Midwest, Canadian markets, central

plains states and the Gulf state region. The Detroit Region Aerotropolis provides global air access with nonstop

service to more than 160 destinations. Interstate highways reach from Canada to Mexico while connecting our region

to both the east and west coasts. The Detroit, Toledo, and Windsor water ports are among the largest along the St.

Lawrence Seaway.

Training programs: We have a range of training programs from certificate programs through advanced degrees,

including the number one supply chain management program in the U.S. at Michigan State University.

Experienced professionals: Growing out of our automotive history, we currently have 235,000 people working in

the transportation, distribution and logistics sector.

Capacity: We have half a billion total square feet of warehouse space, and there is room for growth in our

distribution centers, on our roads, rails, and waterways. We can accommodate more freight today without congestion

and time delays.

Reliability: Our region has one of the lowest rates of weather-related cancellations in the country. We have the

capacity to accommodate increased volumes of freight without time delays.

Competitive total cost: The region offers a competitive total landed cost. Typically, trucking costs are a significant

driver of this number, and our trucking costs to major markets are significantly lower than competing regions like

Columbus, Chicago, and Harrisburg.

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Action Plan Based on private sector engagement, freight study results, and external outreach, we determined several areas for

growth, classified into the four main asset categories: infrastructure, talent, industry, and location.

Regional Supply Chain Action Plan

Next Steps

Sharing Our Value The value proposition will allow us to have consistent messaging and data and to speak with a common voice. Our

audience is broad and global. We need to market our assets and share success stories from companies located in our

region who are already realizing the benefits of our regional value proposition. Site selectors are a key part of this

broad audience. Ensuring that site selectors are informed about our regional supply chain advantages is critical so our

region is considered when making location decisions.

Our value proposition will help develop consistent messaging and data to assist economic developers in speaking

with a common voice. Communicating our value proposition to economic developers at the city, county, and state

level can help ensure that they have the information they need to include supply chain as part of the conversation

when they are working to attract and retain businesses. This information, coupled with economic developers’ in-

Asset Need Task Timing

Short Term Mid Term Long Term

Infrastructure

Intermodal capabilities Support DIFT project DIFT DIFT

Road repair and maintenance

Advocate for transportation

funding

New International Trade Crossing Continue bridge advocacy

Talent Railroad workforce Create career awareness

Establish training

program

Trucking workforce Create career awareness

TDL workforce hub Launch virtual hub

Industry

Market outreach program

Raise awareness of regional

supply chain value proposition

and provide export support

Attract and retain

business

Attract and retain

business

Intermodal facilities Support DIFT project DIFT DIFT

Climate-controlled warehouses Conduct a gap analysis

Ocean carrier engagement Perform needs analysis

Location

Agricultural inspection capacity Perform gap analysis

Border crossing consistency Establish root causes

Fact-based marketing effort

Incorporate regional facts into

awareness campaign

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Contact

Awareness

Understanding

Trial Use

Adoption

depth understanding of their clients’ needs, will allow the messaging to companies to be tailored on a company-by-

company basis.

Stages of Freight Engagement

Implementing the Action Plan Our next step for implementing the regional supply chain action plan includes breaking the action plan into discrete,

actionable steps. Then we will work to engage the right regional stakeholders to take action. To coordinate these

efforts to ensure completion and progress, we will apply our program management process, which includes

appropriate timelines, follow-up, meetings and information sharing.

The good work we have completed over the last 75 days has led to a value proposition and plan of action for

progress. By sharing the value proposition and executing the action plan, we’ll achieve our common goals of creating

a transportation, distribution and logistics cluster of excellence which will lead to job creation and investment within

our region.