Small Illinois town becomes intermodal facility and warehouse central; long-term benefits are not good

Elwood, Illinois is home to facilities of a number of important American companies but the small community experiences few benefits:

It’s hard to find anyone who will admit to it now, but when the CenterPoint Intermodal freight terminal opened in 2002, people in Elwood, Illinois, were excited. The plan was simple: shipping containers, arriving by train from the country’s major ports, were offloaded onto trucks at the facility, then driven to warehouses scattered about the area, where they were emptied, their contents stored. From there, those products—merchandise for Wal-Mart, Target, and Home Depot—were loaded into semis, and trucked to stores all over the country. Goods in, goods out. The arrangement was supposed to produce a windfall for Elwood and its 2,200 residents, giving them access to the highly lucrative logistics and warehousing industry. “People thought it was the greatest thing,” said Delilah Legrett, an Elwood native…

But this corporate valhalla turned out to be hell for the community, which suffered a concentrated dose of the indignities and disappointments of late capitalism in the 21st century. Instead of abundant full-time work, a regime of partial, precarious employment set in. Temp agencies flourished, but no restaurants, hotels, or grocery stores ever came, save for the recent addition of a dollar store. Tens of thousands of semis rumbled through Will County every day, wreaking havoc on the infrastructure. And as the town of Elwood scrambled to pave its potholes, its inability to collect taxes from the facilities plunged it into more than $30 million in debt…

According to the Will County Center for Economic Development, at least 25,000 tractor trailers a day come through the Intermodals. That amounts to three million containers annually, carrying $65 billion worth of goods. A staggering $623 billion worth of freight traversed Will County infrastructure in 2015 alone, roughly equivalent to 3.5 percent of the U.S.’s total GDP…

But when it comes to the long-term prospects for the region, optimism is scarce. Paul Buss’s son, who works as a building inspector in Joliet, told his dad there’s concern “these companies are gonna come in, they’re gonna build these buildings, and they’re gonna use them for however long they can get a tax break on them, and then they’ll move someplace else.” The threat of empty warehouses looms large.

The freight industry, composed of both railroads and trucks, has to be placed somewhere. The southern edge of the Chicago region is a logical place with close connections to major highways, cross-country railroad lines, airports, and both the Great Lakes and the Mississippi River as well as proximity to the third largest metropolitan area in the United States. And there are likely benefits to these companies and industries to have a concentration of facilities rather than scattering them across multiple communities and regions.

But, the article suggests we should not view the communities where these facilities are placed just as collateral damage. There are real consequences to the trucks and trains that ship all the goods we need on a daily basis. People’s lives are affected. Could the facilities should be placed outside of towns and away from residences as possible?

Perhaps the true test of all of this is whether the next town that is chosen or selects itself as the possible next facility center turns down the opportunity or they dive headlong into the same issues.

 

Illustrating the importance of truck deliveries to American life

A 2012 infographic shows how vital truck delivers are in the United States:

Infographic Trucking Industry Facts

Four quick thoughts:

1. By days two and three, things are getting ugly. No new food? Certain supplies not available? No more gasoline?

2. This highlights the on-demand nature of many of our underlying social systems. We expect to have supplies readily available if needed and do not stockpile much (from food to medicine to fuel).

3. Many fictional apocalyptic tales feature major natural disasters, diseases, or government issues but a much more prosaic reason could cripple the trucking industry. It may not make for a thrilling story but this could be the real way the apocalypse comes quickly.

4. Shouldn’t we consider the trucking industry part of the national infrastructure? We often consider highways and railroad tracks important but the trucking industry itself matters.

Shipping via truck and railroad in a strong economy

If the economy is going well, the trucking and railroad industries have plenty of work to do:

The dynamics in the transportation sector are “clearly signaling that the US economy, at least for now, is ignoring all of the angst coming out of Washington D.C. about the trade wars,” the report by Cass said.

The Cass Shipments Index does not include shipments of bulk commodities, such as grains or chemicals. But shipments of commodities were strong too, according to the Association of American Railroads. Excluding the carload category of coal, which is facing a structural decline in the US, carloads rose by 6.7% year-over-year, including grain, up 14.7%; petroleum & petroleum products, up 27%; and chemicals, up 4.6%. Of the 20 commodity carload categories, only five showed declines, including nonmetallic minerals, metallic ores, and the biggie, coal.

And intermodal traffic – shipments of containers and trailers via a combination of rail and truck – surged 6.9% in July compared to July last year, the AAR reported.

At the least, this is just a reminder of how goods make their way to stores and eventually buyer’s residences. Those trucks and trains may be a nuisance when you want to get where you want to go but this is how it works in our society.

A few other thoughts:

  1. It is hard to imagine drones could make up for all or even many of the goods shipped by trucks and trains. Or, imagine drones like swarms of locusts.
  2. The shipping industry is another one highly affected by economic swings. Like the construction and housing industries, when times are good, there is a lot of need for goods to be moved around. When a recession hits, all that equipment and all those employees are not needed.
  3. Of course, there is an international component to all of this where goods have to enter or leave countries. That all happens on a consistent even with all the rhetoric regarding trade wars and trade agreements. I remember going past some of the shipping yards in Hong Kong and being amazed at the size of the facilities: cargo containers in huge piles for as far as one could see.

American dilemma: electric cars vs. trucks

Americans like to drive but it is unclear whether they will be driving electric cars or trucks in the future:

The auto industry is at a crossroads, with the future of legacy automakers like Ford, General Motors Co and Fiat Chrysler Automobiles NV uncertain as governments float proposals to ban internal combustion engines over the next two decades.

But in the present, consumer enthusiasm for trucks and sport utility vehicles is strong, especially in the United States. And that is providing Ford, GM and other established automakers with billions in cash to mount a challenge to Tesla…

Electric cars are money losers, which explains why global automakers have been slow to roll them out until now. But regulatory and consumer pressures are forcing established automakers to put more electric vehicles in their fleets over the next several years. In a cash-intensive industry, profits from pickups and SUVs may give them a competitive edge.

Ford said on Thursday that the average price of one of its F-series pickups rose $2,800 to an average $45,400 a truck in the third quarter. Sales of F-series trucks, which range from spartan work trucks to Platinum models with the features – and price tags – of a European luxury sedan, were up nearly 11 percent to 658,636 vehicles for the first nine months of this year.

This is not just a consumer preference issue. There are potential repercussions for the auto industry (a fairly large one), urban and transportation planning, tax revenues for governments, and a whole space – the suburbs – built around driving around. Oh, and many Americans seem to prefer driving larger vehicles and intertwining their identity and the related activities with these vehicles.

Let Amazon’s big data tractor trailer drive to you

Americans like big trucks and hard drive space so why not put the two together?

Amazon announced the new service, confusingly named Snowmobile, at its Re:Invent conference in Las Vegas this week. It’s designed to shuttle as many as 100 petabytes–around 100,000 terabytes–per truck. That’s enough storage to hold five copies of the Internet Archive (a comprehensive backup of the web both present and past), which contains “only” about 18.5 petabytes of unique data...

Using multiple semis to shuttle data around might seem like overkill. But for such massive amounts of data, hitting the open road is still the most efficient way to go. Even with a one gigabit per-second connection such as Google Fiber, uploading 100 petabytes over the internet would take more than 28 years. At an average speed of 65 mph, on the other hand, you could drive a Snowmobile from San Francisco to New York City in about 45 hours—about 4,970 gigabits per second. That doesn’t count the time it takes to actually transfer the data onto Snowmobile–which Amazon estimates will take less than 10 days–or from the Snowmobile onto Amazon’s servers. But all told, that still makes the truck much, much faster. And because Amazon has data centers throughout the country, your data probably won’t need to travel cross-country anyway.

One could make a strong case that semis make America go. And all the money that the government has put into highways and roads certainly helps.

The most common job in 37 states

Moving goods around the country requires a number of drivers:

More than 3 million people drive trucks in the United States. In fact, according to Steve Viscelli, author of “The Big Rig: Trucking and the Decline of the American Dream” and a lecturer in the Department of Sociology, it’s the No. 1 occupation in 37 of 50 states.

Americans don’t generally pay much attention to infrastructure but the trucking industry may be lower than average on the list of infrastructure components. Outside of complaining about large trucks on the road (driving next to them, the noise they generate), it is difficult to remember that so much of what we purchase comes at least part of the way through trucks. And if trucking all moves to self-driving vehicles, perhaps trucking will become even more faceless.

But, perhaps one way we will hear about the future changes in trucking: a significant loss in jobs. Will drivers be able to transition to new jobs better than millions of manufacturing workers or others who have lost jobs because of a changing economy in recent decades?

Considering a robot superhighway from Mexico to Canada

If driverless cars are in the near future, why not a superhighway of autonomous trucks linking Mexico and Canada?

The project is currently being considered by members of the Central North American Trade Corridor Association (CNATCA), and would consist of a robot-only corridor running along Route 83 through Texas, Oklahoma, Kansas, Nebraska, South Dakota, North Dakota and on into Manitoba.

One of the main reasons for a robot road like this, according to Marlo Anderson of the CNATCA, is that North Dakota produces a lot of oil right now, and doesn’t have a great way to get it all where it needs to go. Sure, there are trains, but there’s not enough space to be had. That, and the jury-rigged cars that carry the oil keep exploding. Trucks can help ease the pressure, especially if they don’t need drivers…

There are plenty of problems to solve before any of this would be possible though, including self-driving car laws in half a dozen US states, some way of having driver-less robo-rigs cross borders into and out of the United States, and security in place to make sure no one tries to exploit that system. But robot roads like this one—if it happens—could pave the way to wider acceptance of self-driving vehicles that really do take care of it all themselves. Even if we’re not ready to have them on the road with us just yet.

Advantages include safer roads, no time restrictions on the trucks, lower labor costs, and presumably cheaper goods and/or more money to be made. Disadvantages include lost trucking jobs, a long period of time to put this all together, and perhaps the biggest hurdle for now: what exactly would such a highway cost to build and maintain? Do we need a fleet of herding vehicles to service the trucks and highway?

I wonder what the final arguments regarding this might look like: perhaps safety on the trucking side (how can you argue with a safer driving experience?) versus the steady erosion of jobs greased by free trade (this time to autonomous vehicles).

Self-driving semis to bring safety, limit unwanted jobs – and lower the costs of products?

Wired sums up some of the advantages autonomous semis might offer but leaves off a third possible advantages: cheaper shipping costs which leads to cheaper goods.

In 2012 in the US, 330,000 large trucks were involved in crashes that killed nearly 4,000 people, most of them in passenger cars. About 90 percent of those were caused by driver error. “Anything that can get commercial vehicles out of trouble has a lot of value,” says Xavier Mosquet, head of Boston Consulting Group’s North America automotive division.

So it’s no surprise some of the country’s largest freight carriers have in recent years started equipping their vehicles with active safety features like lane control and automatic braking. The economic case for these measures—the predecessors to fuller autonomy—is clear, says Noël Perry, an economist who specializes in transportation and logistics…

Another point in favor of giving robots control is the serious and worsening shortage of humans willing to take the wheel. The lack of qualified drivers has created a “capacity crisis,” according to an October 2014 report by the American Transportation Research Institute. The American Trucking Associations predicts the industry could be short 240,000 drivers by 2022. (There are roughly three million full-time drivers in the US.)

That’s partly because long haul trucking is not an especially pleasant job, and because it takes time and money to earn a commercial driver’s license. The shortage will get worse, Perry says, thanks to a suite of regulations set to take effect in the next few years. A national database to collect company-performed drug and alcohol tests will make it harder for drivers who get in trouble at one job to land another. Speed limiters could keep trucks to a pokey 64 mph. Mandated electronic reporting of hours driven will make it harder to skirt rest rules and drive longer than allowed. These are all good changes from a safety perspective, but they’re not great for profits.

Safety is good and more meaningful jobs might be helpful – though losing a bunch of driving jobs won’t look good to many. But, what about the added benefit of cheaper shipping costs in the long run? Perhaps it will take some time for this technology to become cheap and widely adopted. Yet, if trucks can drive themselves and drivers don’t need to be paid, can’t these trucks run all day long making runs back and forth? And imagine if they could utilize greener technologies as well, limiting fuel costs. Americans like their cheap consumer goods and having everything shipped by semi just a little bit cheaper on store shelves may help Americans enjoy self-driving trucks even more.

The need for infrastructure to move future freight

This look at the future of moving freight in the United States suggests there is work to be done in developing the necessary infrastructure:

The scale of the infrastructure that moves our stuff is staggering, yet we hardly notice it beyond appreciating how fast a book has arrived or growing agitated with double-parked delivery trucks. But the ships, trains, trucks, ports, rails, roads, and support structure that facilitates the metabolism of our society will soon be more visible. The Census Bureau estimates a nearly 20 percent population increase by 2040—that’s one new person every 12 seconds who needs and wants stuff…

As ships bring bigger swells of goods and ask for quicker turnaround times, the ports are focusing on how to get those goods off the ship and on the roads or rails faster. So while ships are maximizing economies, ports are focusing on efficiency. “We are using less to move more,” said Curtis Foltz, executive director of the Georgia Ports Authority, echoing the company tagline (“we use less to move more”). The authority recently converted as much equipment as possible from diesel to electric, including cranes that generate 30 percent of their own power from gravity, and efficient rack systems for growing numbers of “reefers,” or refrigerated containers…

The DOT estimates an 88 percent increase in rail freight demand by 2035, and Forbes recently predicted that rail will become the most important logistics system of the 21st Century. The reliability and efficiency of rail is already eating into trucking’s market share, as trains are increasingly used for hauls as short as 500 miles, formerly only the domain of trucks. But increasing capacity of the country’s 140,000-mile rail network and its upkeep will require huge capital expenditure, estimated by the Federal Railroad Administration to reach $149 billion over the next 20 years…

The Federal Highway Administration has some numbers to consider: In 2011, approximately 11 million trucks moved 16.1 billion tons of freight worth $14.9 trillion. This level of activity caused recurring peak-period congestion on 10 percent of the National Highway System. Now consider that commercial vehicles currently account for only 9 percent of all vehicle highway miles traveled. Think rush hour is bad now? The FHA estimates that in the next 30 years, there will be 60 percent more trucks, translating to significant slowing on 28,000 miles of the NHS during peak hours, and stop-and-go conditions on an additional 46,000 miles.

There may be a lot of interest in driverless cars but it just be “old” technologies like ships and railroads that keep the flow of goods moving as well as large trucks. When you think about, the whole system is quite amazing: transporting enough goods for 300+ million people requires a lot of coordination and energy.

It will be interesting to see who pays for these upgraded structures; improving ports, for example, could be economic boosts but they are not usually sexy projects and there are plenty of more immediate quality-of-life issues that get more attention (education, health care, etc.) Would consumers complain if the cost of their relatively cheap goods went up to pay for some of these improvements?

A beer pipeline to help relieve congestion in Bruges

The city council of Bruges has approved a beer pipeline that will cut down truck traffic from a brewery shipping beer to the city center:

In the years since the De Halve Maan brewery opened a bottling facility outside Bruges in 2010, the company’s faced a tricky logistics problem. It still brews beer at its original site downtown, just as it has for nearly five centuries. To get all that delicious beer to the new factory for filtration, bottling, and shipping, it uses trucks. Trucks that burn fuel, spew carbon and clog the city’s cobblestone streets (which surely froths all that beer).

No more. The city council has approved the brewery’s unusual but clever plan to save time and money while reducing emissions and congestion. It will build a pipeline to ferry the good stuff across town, underground. Yes, you read that right: A beer pipeline.

Instead of making the 3-mile drive in one of dozens of tankers that traverse town each day, the award-winning beer will flow through a 1.8-mile polyethylene pipeline, making the trip in 15 to 20 minutes. The pipeline will move 6,000 liters of beer every hour, De Halve Man CEO Xavier Vanneste told Het Nieuwsblad.

As CityLab points out, Cleveland’s Great Lakes Brewing Company uses underground tubes to move beer between its brewery and its pub, across the street. But this is a longer journey, one with real environmental consequences, and the Belgian pipeline surely will have a bigger impact in terms of reducing traffic and carbon emissions. “In time, this innovative investment plan would reduce the amount of transport by heavy goods vehicles by 85 percent,” says Franky Dumon, the alderman for spatial planning who approved the project on behalf of the city council. “It is a win-win situation for everyone.”

A fascinating solution. Indeed, I expect there will be a lot of efforts in the years ahead to try to limit congestion through all sorts of means like piplines or drones or new means that haven’t yet been tried. And I imagine such an unusual feature could be used to attract tourists. Perhaps the pipeline could have an ongoing “leak” where people could get a small amount for a fee?

This idea makes me think of The Simpsons episode from eighth season titled “Homer vs. the Eighteenth Amendment.” Operating as the Beer Baron, Homer has a Rube Goldberg-esque pipeline that connects the alcohol production facility to the bowling alley where the illicit booze is delivered in bowling balls. I’m sure the pipeline in Bruges will be more efficient and has the benefit of the blessing of the local government.