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