In 2009, the Institute for Trade and Transportation Studies joined a mission sponsored by the Tennessee-Tombigbee Waterway to visit the Panama Canal. The mission, with a variety of public and private participants from the States of Alabama, Mississippi, Kentucky, and Tennessee, received two excellent briefings on Panama and the Canal. Mr. Rodolfo R. Sabonge, Office of Market Research and Analysis Vice-President from the Panama Canal Authority, outlined the traffic patterns through the Canal and the basic expansion plans. Mr. David Hunt, with the American Chamber of Commerce, discussed how to do business in Panama and the Panamanian economy. The following day, the group toured the Miraflores Locks. On Saturday, the group transited the Canal from the Pacific to the Atlantic. While a long day, it was worth the trip!!
Over the ensuring years, ITTS sponsored a second trip to Panama with other ITTS member states and prepared additional presentations and reports on the Canal. However, I have not been back since the Canal was opened. I think it’s time for a return visit to tour the finished locks!
Many have postulated what generates transportation corridor development, especially regarding new service options. Often, these discussions involve many users seeking someone to help them solve “their” problem. For example, the shipper will want service alternatives that are reliable and/or at a lower cost than their current operation. Carriers want more cargo on their network. Public sector groups want to see more economic activity, expressed as freight traffic, through their region. (The same could be applied to intermediaries, such as labor, freight forwarders, brokers, etc.). There seems to be no single word that encompasses the “why” regarding how transportation services start and continue over time.
In organizing my thoughts on this topic, I came up with two alternative lists to distill what maybe needed for a transportation service to begin and remain successful. I really don’t know which list is better, so they are presented here for your consideration.
First, the 7 C’s. (I was thinking of something catchy. I think this works..)
Capital-It takes money to get something started. There are barriers to entry, costs of renting/purchasing equipment, etc., as transportation may require large upfront costs before the first shipment occurs.
Carrier-A carrier (or multiple carriers) must be willing to offer that service, possessing the right equipment, skills, etc. to satisfy a shipper’s needs.
Connectivity-The trade lane must service a network, or be tied to networks, so that the cargo does not stop at a midpoint. For example, there are many ports in the U.S., but not all are served by multiple Class I railroads. This could put these ports at a disadvantage for rail dependent cargos. (There are other connectivity issues related to pipelines, roadways, shipper locations, channel characteristics, etc., so don’t think I am only picking on railroads!).
Cargo-There has to be cargo operating in both ways (to spread out the revenue costs for the carrier) or someone is willing to pay for the empty movement, but cargo must be available and willing to pay for that freight service.
Collaboration-For the carrier, shipper and other engaged parties, the service must be seen as an important relationship, not a “one-off” item, to encourage shippers and carriers to be confident the service will continue into the future. This may also require a champion to ensure that everyone is working toward the same goal. (Yes, Champion is a “C” word, but in this context, it is a visionary pushing for collaboration.)
Costs-There is no free lunch. Costs must be set at a level where carriers benefit while shippers receive their desired service levels, and where possible, there are little significant cost on other users/groups.
Climate-Does the business climate support this service? Can the service handle any disruptions or adopt to changing conditions? Given discussions on resiliency, climate may be a good word when discussing risks outside of operational activity.
My alternative term is OARS (like row your boat?)
Operations – The right equipment, permits, labor agreements, etc., to make a transportation service run,
Assets – This category includes the actual transportation equipment and infrastructure (roadways, vessels, trucks, cranes, docks, etc.), and the labor (truck driver, train, customs, services…),
Reliable– Everyone has to commit to making the service “work”, where service risks are minimized, and revenue streams can be managed so that everyone benefits.
Support– Everyone involved understands their role, and works to ensure the cargo, equipment, service, etc., work as expected. In some ways, this final category may be the hardest to maintain over the long term as markets/costs, can change over time.
In reviewing these two lists, there exist many nuanced concepts, but one “C” word seems to be an unspoken, but vital, element: commitment. This requires a commitment to provide the service (carrier), use the service (shipper), and to support the service (public sector/other agents).
As I was putting together a sample market study for Scott County Missouri for the ITTS member states (Working Paper 13), there is a lot of information regarding transportation, economic activity, and a host of elements concerning sources of additional economic data, especially when combined with the Executive Briefing Book (Working Paper 21). However, know this source data does not necessarily mean this information will generate additional economic growth independent of some active leadership. That question could be summarized as “how do I tell a story that is actionable”.
After writing those reports, I realized that there are two stages to this quest to attract and retain economic development – I call the first step “the Dream”, where a vision is created and sold to regional and potential partners, while there is a second stage I call “the How”. This is the actionable part of economic development, where leadership and commitment are necessary to move a project forward.
Elevate your branding
Zero in on potential customers
Reach consensus with local partners
Aggressively identify competitive assets attractive to all parties
Pursue realistic timelines
Outline budgetary and regulatory approval needs as early as possible
Understand your competitor’s capabilities
Negotiate project review checkpoints
Deploy resources until completed
(And yes, the acrostic is a poet’s name. I love playing with the Acrostic word games. One of his most famous poems is an impression of a metro station – another transportation angle!)