Restructuring Chicago: Development of the Chicago Intermodal Dry Port Complex, Rail Bottlenecks, and new Supply Chain Requirements

Authors: Christopher Clott Ph.D. Dean, College of Business and Health Administration, University of St. Francis, Joliet, IL 60435 Email: cclott@stfrancis.edu Phone: 815-740-3452

Bruce C. Hartman Ph.D. Professor of Logistics, College of Business and Health Administration, Intermodal Transportation Institute, University of St. Francis, Joliet, IL 60435 Email: bhartman@stfrancis.edu Phone: 510-854-6443

Topic Area: Emerging trends in consumption, production and spatial organization

Abstract Seaports have traditionally been the focus of maritime logistics chains. Changing production patterns, supported by the development of rapid transport of goods over long distances, have altered the logistics landscape with inland “dry ports” assuming ever greater importance to the organization and design of transport resources and cargo flows. This is particularly true in the case of Chicago, which serves as a critical gateway intermodal point for truck, air and river barge traffic to all points domestically and globally. Numerous third party logistics providers and distribution centers have located in freight clusters outside the central city to process the flow of goods, expected to increase substantially beyond the 14 million TEU that currently move through the region. A number of public/private institutional arrangements have been created to plan for the future and attempt to alleviate decade’s long infrastructure bottleneck issues in the region. Federal, Regional, State and Local government along with major private global corporate interests all have substantial interest in potential outcomes. We argue that new supply chain link oriented partnerships with governments, regional agencies, and business are needed, and might include coastal ports and other mega-regions.

1. Introduction This paper analyzes the setting and development of the Chicago intermodal dry port region, the largest and most important container gateway in North America connecting the East Coast, the West Coast and the Gulf of Mexico (U.S. Bureau of Transportation Statistics 2011). Inland port development everywhere has grown substantially as a byproduct of the growth of intermodal freight transportation, driven by changing requirements of supply chains in global markets and distribution systems. This growth is described under various names including hinterland networks, dry ports, inland ports, intermodal centers, inland logistics centers, inland freight centers, and inland freight terminals (Rodrigue & Notteboom, 2012).

The paper begins with a description of the current research done in intermodal port corridors with respect to port regionalization and supply chain integration. We then discuss the Chicago intermodal port drivers and direction of development, using an analysis derived from work by Wilmsmeier et al. (2011) and Lam & van de Voorde (2011). The geographical location of Chicago and its capacity and reliability for regional inland access have played an important role in shaping its past and future development, particularly to attempts to alleviate rail and highway congestion. Rodrigue and Notteboom (2011) argue that competition between maritime shipping networks will focus increasingly on inland transportation and inland terminal facilities as fundamental components of their competitive strategies. We suggest that the further development of the Chicago inland port will impact virtually all of the competitive strategies of global/national retailers, distributors, ocean carriers and railroad lines due to its volume, size and market location. The positioning of firm facilities will lead to the development of new competitive advantages and supply chain arrangements due to facility location.

Section 2 summarizes earlier research conducted on inland ports. In Section 3 we present the model of supply chain improvement used to discuss the Chicago area. Section 4 describes the bottlenecks for logistics in Chicago and some efforts to relieve it. In Section 5 we identify the most prominent regions linked to Chicago; showing that Eastbound and Westbound traffic is highly dominant and will provide the most fruitful ground for partnerships. We close in Section 6 by discussing some opportunities for partnerships and for more work.

2. Port Regionalization and Dry Port Development Numerous researchers have described the process of port development based on linkages (Taffe et al. 1963); specialization (Bird, 1963); interconnection (Rimmer, 1967); load centers to increase inland penetration (Hayuth, 1981); movement to less congested areas (Barke,1986) and the rise of cooperative port networks including logistical control of inland access (Van Klink, 1998). Notteboom & Rodrigue (2005) developed the idea of port regionalization as a combination of load centers and priority corridors where the inland nodes are actively involved

in shaping the supply chain. Rodrigue & Notteboom (2012) suggest three fundamental characteristics related to inland nodes; 1) an intermodal terminal that has been built or expanded, 2) a connection with a port terminal through rail, barge or truck services, often through a high capacity corridor, and 3) an array of logistical activities that support and organize the freight transited, often co-located with the intermodal terminal (p.4). The centrality and intermediacy of inland nodes can be affected by government policy (Ng and Gujar, 2009) and changes in port service demand (Wilmsmeier et al., 2010, 2011).

With the continued impact of containerization on freight management practices, dry port development has spurred the clustering of logistical activities in locations actively integrated with supply chain management strategies (Rodrigue and Notteboom, 2012). Monios & Wilmsmeier (2011) argued that the space and scale of competitive strategies can be understood by the drivers of development (e.g. port authority, port terminal, rail operator, public organization) and the direction of development (land driven vs. sea-driven) will lead to inland terminal development that is either 1) Inside-Out (land-driven by rail operators or public organizations, for example the Heartland Corridor) or 2) Outside-In (sea-driven by port authorities or terminal operators, for example the Alameda Corridor). Rodrigue and Notteboom (2011) suggest that the intensification of activity toward dry port development has much to do with a search for lower land value; less intensively developed locations that provide a higher level of accessibility because of lower distribution costs and improved capacity. High capacity inland transport corridors can allow competing maritime ports to extend their cargo base as well as gain competitive advantage.

In the United States, maritime seaports compete vigorously for cargoes from diverse supply chains. Re-development and widening of the Panama Canal (scheduled for completion in 2015) and newly expanded alternative ports such as Prince Rupert, B.C. have led to sizeable infrastructure investments at U.S. seaports to facilitate greater consideration as key load centers. Little research has appeared on strategies for “pre-emptive defense” of competitive advantage in container traffic by seaports through the use of dry ports and rail ports (Jensen, 2011). Lam & van de Voorde (2011) suggest that seaport development and growth will be driven by inland supply chains and thus the focus of seaports must shift from adjacent land use and facility creation to performance optimization for the chains they serve. The “inside-out” or “outside-in” distinction may be less important than managing the ‘link’ to create competitive advantage and supply chain integration. Thus, the development of partnerships between major seaports and key inland terminals may drive customer service improvements for supply chains as suggested by Rodrigue & Notteboom, 2009.

“The increasing differentiation of supply chains and related logistics networks, in response to specific customer and market requirements, is having an impact on the specific role of seaport and inland terminals. Just like other market players, terminal operators are trying to capture

value and revenue. Where possible and desired, they are teaming up with shippers and logistics service providers to create value through developing concepts to streamline and synchronize supply chains. A concrete outcome of this development on the inland segment of the supply chain relates to the role of inland terminals as extended distribution centres. Terminalization is trickling down inland, conferring the benefits of a location close to the distribution centre (and of final markets) and of a higher likelihood that the consignment will be held at the terminal and made available ‘on call’. The broadening of the DC functions to include a nearby inland terminal also makes it possible to arrange direct delivery of full container loads without physically passing the cargo through the DC .” (2009, p.173.)

Increasingly, supply chain improvements involve participation of the supply chain members, infrastructure providers and governments. These improvements often involve distances spanning jurisdictions with cooperation on a broad scale needed. To do this requires structured negotiation, with specific contracts and performance guarantees that contain penalties for non-performance. Because long term contracts cannot foresee all exigencies, the parties must rely on further negotiation or institutions for resolution of issues (Gomez-Ibanez, 2003). Incentives for development offered by locales such tax increment financing (TIF) have been utilized in some states such as Illinois, to use future taxes to reimburse the developer of land for some expenses, with mixed success (Cancino, 2013; Dye & Merriman, 2000). It is most helpful if there are strong legal institutions, supportive state and local governments, and a political environment that utilizes business partners who are sophisticated and who have a real stake in the outcome that is aligned with the objective. Public-private partnerships have started to emerge as means of achieving such coordination (Monios & Wilmsmeier, 2012). Supply chain oriented agreements should have many of these properties if the chain is imagined to persist for a significant period. But despite what cooperative goals all of these entities may espouse, they tend to act in their own economic and political interest even when the cooperative goals clearly are beneficial (Prince, 2002; Clott, 2000; Olson, 1965).

3. A Model of Supply Chain Improvement A useful recent study by Lam & Van de Voorde (2013) uses scenario analysis to look at excellence in supply chain integration (SCI). The authors model supply chain improvement in two dimensions: the level or time frame (strategic, tactical, and operational), and the type (customer service, inventory, transportation, and order processing). Their analysis focused on ocean container (liner) shipping and the liner firms’ cooperation with upstream (customer) and downstream (ports and terminals) supply chain partners. We adapt their view to Chicago, examining the potential for partnerships by looking at the links around it as the ones that need to improve coordination.

Figure 1: Supply chain improvement modes from Lam and van de Voorde. Original source: Lam, 2008.

Figure 1 shows the type of supply chain excellence sought at each level within each type. The Order Processing type can be principally information or IT related improvement. The increased use of freight transportation arrangement firms such as third party logistic providers (3PLs) is occurring in the Chicago region because they are functioning as information hubs, and can facilitate this activity better as a core competence. Some 60% of shippers now report use of 3PLs in their supply chain (Langley, 2013). Interestingly, 59% of their customers say they consider their information systems an important part of the 3PL’s value, but only 53% are satisfied with the 3PL’s information system (ibid.,2013). The Chicago area is home to many asset based and non-asset based 3PLs, with some fast-growing firms such as Coyote Logistics, Echo Global Logistics, and Total Quality Logistics, utilizing advanced software within their IT platforms to connect shippers to carriers.

As traditional supply chains evolve to a supply chain integration platform they are driving changes including; (1) slow-shipping through more cost effective carriers to minimize air and truck freight; (2) more emphasis on customer service and reliability; (3) increased emphasis on inventory management and order processing as opposed to transportation and customer service response; (4) use of 3PLs as information switches and repositories to facilitate this flow. The orientation toward customer service follows the classic SERVQUAL (Parasuraman et. al, 1988) gaps between expectation and perceptions that measure service quality, analyzed and dealt with at five levels:

• Tangibles - physical facilities, equipment, staff appearance, etc. • Reliability - ability to perform service dependably and accurately. • Responsiveness (Customer Service) - willingness to help and respond to customer need. • Assurance - ability of staff to inspire confidence and trust. • Empathy - the extent to which caring individualized service is given.

Lam & van de Voorde’s (2011) research indicates that customer service at the operational level is the method most used by liner companies who wish to collaborate with a supply chain partner via an activity focus. While customer/supplier relationship is central in both port and supply chain relations, their research also suggests that customer service is the area most focused on at the operational level when supply chain members start to cooperate. It is common to both upstream and downstream cooperation, but is perhaps most utilized in upstream collaborations, for example in retail supply chains.

Inventory is the latest frontier in SCI. According to Lam (2013), liner companies have not considered it as much they should. Examples are the slow steaming movement, and lack of arrival schedules or container placement information, which hampers scheduling at a port. Material in transit is inventory if it is owned by someone; and needs to be planned to serve the appropriate function in adding value. JIT for instance uses inventory placed close enough to get to the use point in time. Other partners are expected to hold it in bulk if they need to assure the proper service level. In some recent instances, retail supply chains such as Wal-Mart removed so much inventory from their stores that they could not be restocked in time, creating imbalances caused by lack of cooperation with supply chain segments (Saporito, 2013; Dudley, 2013). Very few supply chains have used inventory as a collaboration technique; however, availability of inland port storage locations of various types at reasonable costs is clearly a useful tool for this dimension. Supply chain intermediates are only starting to consider placing inventory in transit locations to increase flexibility of deployment and to balance the entire chain for risk and demand variations. Requirements include not only space for the inventory containerized or not, but handling speed, postponement capability, information systems to assure tracking, and efficient storage or retrieval (Lam, 2013).

4. The Chicago Bottleneck Approximately one quarter to one third of all freight tonnage in the United States originates, terminates or passes through the Chicago metropolitan region (CMAP, 2012). Chicago is the only city serving six of the seven Class 1 North American railroads. An estimated 500 freight trains move 37,500 rail cars daily (CMAP, 2012), accounting for approximately 50% of total rail freight movement (figure 1). Seven interstate highways converge in Chicago, with one of six vehicles being trucks (OECD, 2012). Many routes in the Chicago area are designated truck routes (figure 3). The O’Hare hub airport is annually the nation’s first or second busiest. Finally, an extensive waterway system exists throughout the metropolitan area linking it through the Great Lakes to the Atlantic Ocean via the Saint Lawrence Seaway and connecting via the Des Plaines River and the Mississippi to the Gulf Coast. An aging rail infrastructure within the central city and nearby suburbs, in tandem with space constraints and congestion, has created massive delays for trains (figure 2) seeking to pass through the historic Chicago crossroads, and spurred development of intermodal exchanges outside of the central city (OECD, 2012). Several

public/private ventures have been started to untangle the ‘Chicago bottleneck’ but remain far away from completion (Giblin, 2013).

Figure 2 Rail transport centers on Chicago ( New York Times, 2012)

Figure 3 Maps of the Chicago inland port hinterland showing designated truck routes (Illinois DOT, 2013); and projected 2050 Trans American freight network for different modes with regions and flows portrayed (americas2050.org).

4.1 CREATE and Political Realities The Chicago rail freight bottleneck has been a historic problem due to its unique geographic nexus as the point where railroads from the East, West, and Gulf Coasts all intersected with track first laid down over 150 years ago. Not only does voluminous freight move through this intersection; Chicago is a major hub for Amtrak passenger trains with an extensive commuter train system serving the metropolitan area. Plans for future high speed rail of the type utilized in Europe and Asia have Chicago as a primary terminal point (Ross, 2011). Intermodal moves and rail freight capacity constraints through the central city area have been evident since the 1990’s and have worsened with each year of increasing throughput, affecting all North American freight distribution (OECD, 2012; Schwartz, 2012). The Chicago Region seems to be a primary inhibitor of supply chain excellence with studies showing the need for improvements in the area necessary to realize the potential for optimal customer service and transport services

(CMAP, 2012; OECD, 2012). Rail traffic can take up to 30 hours to move through Chicago due in large part to over 1900 grade crossings; the most in the country (Giblin, 2013; Schwartz, 2012; Moser, 2012). Freight traffic in the United States is projected to increase 50% in the next 20 years even though much rail track torn up after rail deregulation in the early 1980’s was not replaced (Miller, Costa & Cooper, 2012; Stone & Landry, 2008). In the late 1980’s technological advances in rail freight such as advent of double-stack flatcars and mobile cranes specifically designed to unload railcars enabled increased intermodal container traffic (Rockey, 2003).

In June, 2003 the Chicago Region Environmental and Transportation Efficiency (CREATE) project to untangle the bottleneck was announced. Supported by all six Class 1 railroads connecting through the area, the plan called for a public-private-private partnership for 70 critical infrastructure improvements within the city and surrounding suburbs. They included grade-crossing elimination, track and signal projects and closing of old towers. Some 25 rail intersections were to have overpasses and underpasses. The cost when first begun was estimated to be $1.5 billion. As of this year, the cost for full completion stood at $3.2 billion with only 15 projects completed and an additional 10 more under construction (Giblin, 2013). The program is in danger of running out of federal funding in the current budget year with the U.S. Congress unable to pass transportation legislation. At this writing, CREATE has not received the additional funding allocations necessary to finish the projects (Knight, 2013). A major component of CREATE, the “Englewood Flyover” is currently under construction to eliminate a slow intersection for future high speed rail and to separate commuter trains from freight trains. It is slated to open in 2015 but has been the source of much controversy over construction contracts and environmental concerns (Coen, St. Claire & Heinzman, 2013; Joravsky, 2013). The CREATE program has suffered from a patchwork focus, primarily on Chicago central city rail congestion relief, as more throughput moves further out to the south and west of the metropolitan region. While signal system improvements and grade crossing elimination have cut freight rail delays by 28%, the overall project has done little to address the large amount of transmodal (rail to rail) cross-town interchanges necessitating intermodal traffic on area highways by truck (Rodrigue & Notteboom, 2009). One in six vehicles on interstates in the Chicago area is a class 8 truck (OECD, 2012).

The Chicago region has an awkward combination of public and private interests that have not cooperated in development of an overall transportation strategy (OECD, 2012). This is in large part due to a lack of region-wide planning that recognizes the need for comprehensive solutions across state boundaries and locales. For example, the Chicago metro area could be considered to encompass 21 counties stretching from the city of Milwaukee in Wisconsin through Illinois and northwestern Indiana (OECD, 2012; Borsuk, 2013) rather than simply seven counties in the state. The Chicago Metropolitan Agency for Planning (CMAP) is the federally designated (under SAFETEA-LU legislation) regional planning agency for the seven Illinois

counties making up the Chicago region and it is the ‘gatekeeper’ for any federal highway projects in the area as part of their overall GO TO 2040 comprehensive plan that integrates transportation with land use, housing and other issues (CMAP, 2013; Gruehling, 2013). While CMAP would need to approve any projects for potential federal funding, there are a number of economic development offices, cities, county offices, townships and state agencies throughout the metropolitan Chicago area that are involved. To date, there has been little effort at attempting regional efforts to solve region wide congestion problems. Improving freight flow at congested locations requires cooperative action by state, local and federal jurisdictions as well as private sector funds (OECD, 2012). A lack of cooperation has also hampered efforts by area businesses that need to see some form of revenue to participate with public agencies that need to see trickle down economic benefit and jobs. The most recent federal transportation bill, Moving Ahead for Progress (MAP21), signed into law in July 2012, prioritizes freight transportation but has yet to be fully funded. The limited federal financing now available in the form of TIGER grants has promoted “shovel-ready” transportation programs of local benefit over larger regional projects. Some transit experts argue this has that done little to promote overall productivity gains and are little improved from the pork barrel projects of the last two decades (O’Reilly, 2013).

4.2 Outside Chicago (Joliet Region) While Chicago has historically been a logistics hub, the locational constraints of the central city and continued growth and development of intermodal spurred the building over the last decade of massive distribution facilities that are farther from the central city; primarily in Will County, in a development similar to the area of Southern California known as the ‘Inland Empire’ east of Los Angeles. The Centerpoint Intermodal Center, begun in 2002 and built on the site of a former Army arsenal approximately 40 miles southwest of Chicago, is the largest master-planned inland port in North America. Anchored by two Class 1 railroads, the BNSF and UP, it links the seaports of Los Angeles and Long Beach to the Chicago hub for containerized cargo. The adjoining load centers of the BNSF Logistics Park and the Union Pacific-Joliet Intermodal Terminal also house nearby distribution centers for Walmart, Home Depot, DSC Logistics, Georgia Pacific, Potlatch, Sanyo Logistics, Maersk/Damco Logistics, California Cartage, APC Logistics and many others. Centerpoint’s private investment is expected to exceed US$2 billion upon full completion, making it the largest private investment in infrastructure in the United States. The Centerpoint complex has spurred growing warehouse hubs west of the complex on I-80 and along I-55 that intersect I-80 near Joliet. Additionally, several agricultural storage facilities have been established near the Centerpoint complex to load containers with corn, soybeans, and dried distillers grain (DDG’s).

In 2009, the Canadian Northern (CN) railroad acquired the Elgin, Joliet and Eastern Railway (E.J. & E) a Class II railroad, operating between Waukegan, Illinois and Gary Indiana. This enabled

the CN to route intermodal traffic from the developing port of Prince Rupert in British Columbia around the Chicago bottleneck to compete with the California ports. The CN is building an intermodal terminal facility near downtown Joliet to accommodate the growth of cargo and has invested in intermodal facilities in Indiana and the southern suburbs of Chicago as well. The location is fairly close to I-80, from which connections to I-55 and I-57 can be made.

The growth of the area as an intermodal cargo terminus has come with a vast increase in trucking, required to move containers to nearby distribution facilities or onward. Two bridges spanning the Des Plaines River were built in the 1960’s, and I-80, the main east to west interstate, is only two lanes wide through a large part of the Joliet area. Traffic congestion through the small towns of Elwood and Manhattan adjacent to Joliet has required improvements to current roads and new construction to accommodate the growing freight traffic. A new interstate, I-355, now connects I-55 to I-80 but this has not alleviated the growing traffic congestion further to the south and west on I-80. An attempt to create an Inland Port Authority in 2011 to manage the growth of the area was not able to get enough political support for passage and was withdrawn for consideration (Baskerville, 2012). At this writing, the village of Elwood has filed suit against Centerpoint claiming that tax increment financing put up by the village to support the project was misappropriated (Lundquist, 2013; Cancino, 2013).

4.3 The Illiana Expressway Corridor A traffic map of the Chicago area shows that the East-West Interstate highways are nearing their capacity limit and will exceed it by 2040, creating an even bigger bottleneck.

Figure 4 V/C ratios on major routes, 2010 and projected 2040, adjacent to the Illiana study area (encircled) in southern Will County. Chicago is just above right center of the map area. Red indicates roads over the accepted congestion limit of V/C = 0.86. Source: Illiana Purpose and Need Study, 2012.

The enormous growth of intermodal truck traffic in the area surrounding the complex has necessitated new local road building and plans for an ‘Alameda Corridor’ like passage known as the Illiana Expressway. The project was announced in 2006 to connect Interstates 55, 57, and 65, three major North-South routes. I-55 runs from Chicago to New Orleans through St. Louis and Memphis, I-57 begins in Chicago and connects to I-55 north of Memphis while I-65 starts at Gary IN near Chicago and goes to Mobile AL through Indianapolis IN, Nashville TN, and the main cities of Alabama. I-65 is also is the major North-South route to Atlanta GA, from the Midwest. The proposed connector road is about 47 miles long, and is expected to provide relief to the I-80 bottlenecks for trucks in the Chicago area. The Illiana Expressway corridor would cross Illinois and Indiana, outside the Metropolitan Chicago area. Benefits could include reducing road congestion, economic development, infrastructure jobs, and making the southern suburbs and locales south of Chicago a more appealing place to locate distribution and manufacturing, including the creation and retention of more than 9,000 construction jobs and more than 25,000 long-term jobs (Reuters, 2013).

The project, strongly backed by Governors of both states, was organized as a joint project of the Illinois and Indiana Departments of Transportation (ILDOT and INDOT) in cooperation with the Federal Highway Administration (FHWA). When the Obama Administration transportation initiatives were enacted, it moved onto a fast track for potential federal financing. Opposition has come from CMAP, which has questioned in a recently released report whether the expressway’s southern location would lead to more urban sprawl as well as how the perceived benefits would bolster the Chicago economy proper including the city freight cluster (CMAP report, 2013). A decision regarding CMAP support of the project is expected in October, 2013 (CMAP, 2013). (Interestingly, on August 23, 2013 Chicago Mayor Rahm Emanuel announced the start of construction on an $800 million intermodal facility at O’Hare Airport (northwest of

Chicago) through the finalization of a $288 million Transportation Infrastructure Finance Innovation Act (TIFIA) loan from the U.S. Department of Transportation.)

Within the region of actual road construction for the proposed Illiana Expressway, there has been little serious public opposition. There have been environmental concerns that the road might impact upon grassland prairie parks near the route. Overall, residents of the planning region favored anything that might make the region attractive for potential jobs. The region has seen an outflow of manufacturing jobs since 2000 and little to replace it, though distribution facilities have sprung up due to the lower cost of land. Concerns voiced at a planning meeting were largely limited to right of way and individual properties, and fair market value for the property (Illiana Meeting, October, 2012). Most of the land to be acquired is farmland with many farmers eager to sell if the price is right.

Money was appropriated to begin a Tier I study in June 2011, completed by January 2013, and the most southern of the proposed routes, a 2000 foot right of way starting about Wilmington IL and moving directly east to near Cedar Lake, IN, were selected despite the opposition of CMAP. This phase cleared the way for the Tier II environmental study, begun in January 2013, and scheduled to be complete by the spring of 2014. An exact 400 ft. right-of-way will be surveyed and purchase of land will take place. Funding for the land purchases by INDOT and ILDOT is already in place (CED, 2013).

In June 2013, an international industry forum was held by INDOT and ILDOT called Partnering for Progress: Financing through Public-Private Partnerships (Reuters, 2013). The intent was to create a public private partnership (P3) to finance the project. There might be some additional state or federal financing but that is yet to be determined. The options proposed for the funding and financing are:

1. A toll revenue concession model, in which the developer designs, builds, finances, operates, and maintains the facility (DBFOM), with a 50+ year concession term, using an all-electronic open road tolling system interoperable across state boundaries.

2. An availability payment concession (DBFOM) in which the developer receives periodic availability payments (APs), adjusted for inflation, over a term of 35+ years plus construction time. The APs will be reduced for non-performance and unavailability. There will likely be milestone payments during construction, but the private sector would be responsible for construction and financing, with limited support for facilitating federal financing tools.

The schedule announced is to finalize plans by the end of 2014. The agreement will be modeled after the Indiana/Kentucky East End Crossing Procurement. There will be over-the

shoulder design review and 15 day turnaround guarantees for Release for Construction, and a bi-state central coordination conduit.

4.4 The South Suburban Airport Concurrent with the development of plans for the proposed expressway, legislation by the state of Illinois in July, 2013 gave the Illinois Department of Transportation power to build the long delayed South Suburban Airport, on farmland adjacent to the town of Peotone, Illinois. If built, the airport will be the first U.S. airport constructed from scratch through a public-private partnership (Schneider, 2013). The state has invested $40 million to date on acquiring 5800 acres of land for the airport. Proposals for a “third airport” (along with O’Hare and Midway) to serve the metropolitan Chicago area have been in place for over 25 years since the Federal Aviation Administration identified the need in the mid-1980’s. The project was long stalled over political wrangling between the city of Chicago, Will County, and the Congressional district the airport would be located in (Kadner, 2013). Without a ‘regional consensus’, the FAA held off on pursuing the airport and instead diverted federal funding to an expansion of O’Hare Airport, owned by the City of Chicago. (Kadner, 2013) A South Suburban airport may concentrate on attracting airfreight carriers rather than passengers to become economically viable (Will County CED, 2013). The airport may also compete with plans for an upgraded Gary, IN-Chicago International Airport about 25 miles from Chicago in northwestern Indiana, which is owned by the jointly owned by the City of Chicago and Gary airport authority. The airport has been unable to keep a regular passenger schedule (Bomkamp, 2013).

4.5 Proposed Chicago Rail Bypass A plan to create a privately funded US$3.5 billion 90 mile open access Illiana Rail Bypass to link five of the six Class 1 railroads has been proposed paralleling the Illiana Expressway and linking to the proposed nearby South Suburban Airport (Schmidt, 2013; Patton, 2013). It would also call for private funding backed by federal loan guarantees available through the Railroad Rehabilitation & Improvement Financing (RRIF) that was created to engender public-private cooperation in infrastructure projects. Supporters suggest it would eliminate the need for East-West trains to move through the Chicago bottleneck and lead to increased economic development of the area south of Chicago. At this writing, no Class 1 railroads have supported the concept; however the project has the tacit support of the current U.S Congresswoman and the Illinois Department of Transportation. (Schmidt, 2013; Patton, 2013).

4.6 Lake Michigan Ports The 21 County Tri-State Region also has three seaports, the Port of Milwaukee, Port of Chicago and Port of Indiana (Burns Harbor), on Lake Michigan with access to the Atlantic Ocean via the St. Lawrence Seaway. The advent of containerization and intermodal in the 1980’s made the ports non-competitive for all but break-bulk commodities that make up the vast majority of the

current traffic; there are no regularly scheduled liner services plying the Great Lakes. Both Milwaukee and Indiana have developed their ports over the last 30 years to focus on bulk and manufactured products but Chicago did little to improve its facilities and languished as a Great Lakes port center (Karp, 2013; Clott, 1998, 2000). The Chicago port suffers from low clearance railroad bridges and poorly maintained local roads that make it problematic to move cargo to and from its port outlet at Iroquois Landing. In July, 2013, the city of Chicago announced it selected a private operator (the Broe Group, a Denver based firm that owns Omnitrax, a large privately owned railroad and transportation company) to make investments in its infrastructure and otherwise run the port facility. To date, there is little known about the market potential for a revitalized port of Chicago, but the existing land could become an intermodal center to serve the railroads traversing Chicago. At this writing the contract with the Broe Group has not been finalized (Karp, 2013).

4.7 Chicago and Eastern Intermodal Corridors

Intermodal freight corridors similar to those serving Chicago from the West Coast have been developed with public-private funding to modify existing rail bed and tunnels to run double-stack trains from the East Coast to Chicago. The Heartland Corridor runs from Norfolk, VA (Port of Virginia) to Chicago via the Norfolk Southern through Virginia, Ohio, Kentucky and Indiana (Monios & Lambert, 2011). The Norfolk seaport is currently the only one on the East Coast that can accommodate the post-Panamax vessels recently introduced in the maritime sector, and are expected to increase in number with the expansion of the Panama Canal. The corridor also serves the new Rickenbacker Intermodal Terminal facility in Columbus, Ohio (McCabe, 2010). A separate corridor called the National Gateway has been developed by CSX to transport goods from the mid-Atlantic to the Midwest primarily terminating at recently completed intermodal terminal in North Baltimore, Ohio (south of Toledo).

The Chicago-New York corridor encompasses the states of Michigan, New York, Ohio, Pennsylvania, and New Jersey, serving large population centers and important manufacturing centers. Goods for domestic and international consumption and supply often need to move on through this corridor. The many smaller manufacturing firms in this area do not have railcar sized quantities to transport, so they move by truck. Some product is concentrated and containerized locally, then transshipped. Both rail and truck for export to Asia usually moves through Chicago, especially since rail goods are easily transshipped between lines here for movement westward, as do goods manufactured in the East and Midwest and destined for Western distribution.

5. Chicago Freight Links (2011) Using Freight Analysis Framework (FAF3) data for 2011 (provisional at this writing), we performed a Pareto analysis to rank inbound and outbound freight lanes from the Chicago IL-

IN-WI CSA. We identified lanes contributing to 80% of $M value for each of three modes: Truck, Rail, and Multimode/Mail (abbreviated Multi), and for four types: Imports to Chicago, Domestic freight into Chicago, Domestic freight from Chicago, and Exports from Chicago. For imports and exports we did not consider the final destination, but the US point of departure as the termination or origination of the link. In these 12 categories we included only those links that handled more than 0.1 KT of traffic. We identified the top 9 locations by inspection, recording for each the M$ value of freight of that type and that mode, and the rank of the link in the Pareto ranking. Other locations did not appear in the Pareto rankings at sufficient M$ or frequently enough for inclusion. Other modes did not contribute much revenue (Water) or were dominated by a single location (Air Import and Export, Alaska)

We recorded for each mode and type the Top M$ (for #1 ranked location), and the number of locations required for 80%. Some of the combinations were dominated by a single location; to assess the drop-off we computed the ‘Market share’ of #2 as a percentage of #1; a small percentage means a quick drop-off, and little competition at the top. Figure 5 shows these figures. Clearly truck is dominant in M$, and Multi is second for all types. Rail is small; the problem is the low value of the majority of material moved by rail, which also competes for track time. Five categories had less than 11 in the top 80%, and Import and Export had as few as 8 and 4 respectively. There are only a few top value centers in the Export and Import chains; Multi, as expected has many more participants than Rail and Truck, though there are over 20 in each of the domestic categories. Truck has a quick drop-off for all modes, due to the dominance of the truck use inside Chicago CSA, which ranks at the top. There is highest competition for top in Imports by Rail and in Exports by Multi, and all the Rail types show slower drop-off and quite a few competitors. The Pareto charts themselves appear in an Appendix.

Figure 5 Summary of Pareto Analysis

To identify the top chain locations, we tabulated M$ and rank for the locations observed to appear in dominant positions in more than one category, or by a large margin. These figures appear in the table below, with a summary of the top 9 chain locations linked with Chicago.

Figure 6 The top 9 locations linked to Chicago by M$, and rank. Source: analysis by authors.

The table below rank orders these 9 location links to/from Chicago

Figure 7 Important freight centers linked to Chicago. Order Chain Code # Cells # Modes Direction 1 Los Angeles LAX 11 3 West 2 Detroit DET 10 3 Northeast 3 Seattle SEA 9 3 West 4 Philadelphia PHL 6 3 East 5 New York (NY/NJ) NYJ 7 2 East 6 Baltimore BAL 3 2 East 7 Chicago Local CHI 4 1 - 8 Laredo LAR 2 1 Southwest 9 San Diego SDGO 1 1 West

Clearly West-East relations are most important. Northeast (Detroit metro) is an important transit point to/from Canada by truck and rail. Laredo TX ranks high because of NAFTA related maquiladora and produce trades. The long distance rail routes East-West are largely shared track, with the UP and BNSF serving them, placing priority on good transport on these segments. Eastward, Philadelphia, New York/New Jersey, and Baltimore follow similar lines.

From this perspective, to add competitive strength to supply chains an emphasis should be put on improving the performance and lowering the cost of those using the East and West corridors; they are the bulk of the existing market today. The current corridors are heavily used, and efficiency and time based performance is essential. There is considerable inertia to change supply chain links (Lam, 2013), and difficulty doing so more than one tier removed. Partnerships or cooperative activities will likely involve the Chicago area in some form.

The Chicago area has a concentration of partners, including 3PLs, intermodal centers, and manufacturing and distribution capability, so those involved in all of Lam’s (2013) partnership areas of activity are available in the area. (CMAP, 2012). The Tri-state area of IL, IN, WI ranks 3rd in the US with a GDB of $523 billion (OECD, 2012). There is an enormous need for products to be distributed just within the area. Much of this distribution cannot be accomplished by rail. Within 400 miles of the inland port area lies a substantial part of the US population (OECD, 2012). These distances are below the threshold usually considered the minimum for rail transport. Such ‘last mile’ distribution requirements are essential for supply chains to deliver service levels and reliable deliveries that customers now demand. Increasing attention to improved inventory turn ratios by manufacturers and retail means that transport reliability and timeliness must be improved. The Chicago intermodal terminals are in the most central manufacturing and distribution location in the nation.

6. Opportunities & Conclusions Many intermodal supply chains use the West Coast ports for goods, and also have distribution or consumption needs in the hinterland of the Chicago inland port facilities. Alternatively, they require that goods be transshipped in the area for distribution or export through the East Coast ports. We believe that supply chain oriented partnerships between the inland ports in Chicago and the West Coast seaports in particular would enhance the competitive advantage of both areas. Such partnerships would have goals of improving performance, reliability, and reduction of risk. In our view, it would be worthwhile for seaports and inland ports to consider joint actions for further development and involve transport providers and regional authorities along these routes.

One example of enhanced cooperation between the seaports and inland ports might parallel emphasis on cold chain development to and from emerging nations. The “cold chain” involves the transportation of temperature sensitive products along a supply chain through thermal and

refrigerated packaging methods using logistical planning to protect these shipments (Rodrigue, 2013). Other possible coalitions of supply chains in intermodal transport, for instance in repetitive manufacturing supply and export, or retail distribution and manufacturing would benefit from joint planning. Greater collaboration between seaports and inland points would also benefit supply chain visibility to know where things are while in transit and offer more seamless processes with faster turnaround times (Heaney,2013).

One can view the activities of large 3PLs such as JB Hunt or UPS, in brokering intermodal train service with TOFC or COFC shipments in large segments of chains as supply chain coordination by private interests. While they have developed intermodal facilities, they have not so far directly funded rail improvements on frequently traveled lines. Rail operators do not clear enough profit to upgrade independently, but with the commitment of substantial business from a chain, they could make new investments and upgrades in track and equipment. However, private entities are reluctant to invest in upgrades that are used for the common good, such as a single-track to double track upgrade, or grade crossing relief. Passive users can free ride on the major development expense. Thus there must be an active (and trusted) involvement of representatives of the public good, who must be able to articulate the economic benefits of supply chain articulation.

We believe a coalition of a large intermodal terminal complex and a port, even at a long distance, could create the conditions for a public private partnership for link improvement. The Chicago area and the Ports of Los Angeles and Long Beach would be excellent candidates. Both are mega players in intermodal freight; both are facing competition from other areas--- the Panama Canal expansion altering container routes for the West Coast, and for Chicago the emergence of other inland areas such as Kansas City and Memphis. Both of these competitors are specialized at this time; Kansas City as the railhead for the KC railroad’s Mexican route, and Memphis as an air freight and rail hub for southern distribution. Such an alliance could go far in reducing intermodal cost, allowing systematic planning and optimization for chains, and permitting the route and communities along the way to continue benefitting from the coming increase in intermodal freight.

The Chicago Metropolitan Region position as a logistics hub clearly benefits the region’s economy, the Midwest and beyond. The area is poised to lead the way as a center for the emerging “re-shoring” of manufacturing back to the United States from abroad with transportation linkages powering this growth. Federal and regional transit planning must take into account changes in the Chicago freight infrastructure addressed in this study. We suggest that it is incumbent upon the city of Chicago to play a constructive role in the development of the tri-state metropolitan region in its role as a global city. The unfortunate fact is that the city has too often appeared to see its role in transportation as a big player in a zero sum game. This

has led to decades of political interference in businesses utilizing the natural transportation advantages the region has to offer. A more constructive role can only come when all of the players, governors for the three states, federal legislators for the three states, and state and local politicians in the three states understand that the area will rise or fall due to their collaboration around key transportation objectives. So far this seems a distant dream. We suggest it is time to start constructing the future of transportation for the region now and together.

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Appendix A: Pareto Charts of Freight Movements to and From Chicago

Imports to CHI

Domestic to CHI

Domestic from CHI

Exports from CHI

Appendix B: Chicago movements in KT based on FAF data

Table 1 shows the top 16 sources of inputs by tonnage to the two CSAs. Most of the inputs are from surrounding states. Wyoming, Houston, North Dakota, and Montana appear because the figures combine bulk shipments with container shipments. Both products compete for rail capacity.

Table 1; Freight inputs to Chicago SMAs – top 16 ranked by KT

Source CSA tonnage in 2011 Sum of Total M$ Sum of Total Current M$

Pct CD Rank CD Pct KT Rank KT

Chicago IL-IN-WI CSA (IL Part) 209939.0479 $ 253,274.50 $ 281,132.926 39.535% 1 39.609% 1 Chicago IL-IN-WI CSA (IN Part) 55175.8365 $ 26,528.37 $ 31,182.681 4.385% 2 10.410% 2 Remainder of Illinois 37526.2767 $ 16,104.25 $ 18,272.613 2.570% 5 7.080% 3 Wyoming 16883.7008 $ 1,229.56 $ 1,676.419 0.236% 62 3.185% 4 Remainder of Minnesota 15585.2759 $ 4,150.86 $ 4,834.689 0.680% 25 2.940% 5 Remainder of Michigan 13774.2824 $ 3,882.07 $ 4,334.739 0.610% 29 2.599% 6 Houston TX CSA 11326.2218 $ 7,399.65 $ 9,259.763 1.302% 13 2.137% 7 St. Louis MO-IL CSA (IL Part) 9954.6005 $ 6,118.95 $ 7,954.146 1.119% 14 1.878% 8 North Dakota 8639.0770 $ 4,074.21 $ 5,063.183 0.712% 24 1.630% 9 Remainder of Indiana 8081.9068 $ 10,288.83 $ 11,531.330 1.622% 11 1.525% 10 Remainder of Wisconsin 7985.3586 $ 11,418.94 $ 12,708.787 1.787% 10 1.507% 11 Remainder of Ohio 7978.5408 $ 8,750.29 $ 10,349.059 1.455% 12 1.505% 12 Detroit MI CSA 7000.5924 $ 13,300.71 $ 14,679.652 2.064% 8 1.321% 13 Remainder of Texas 6211.0128 $ 5,986.44 $ 6,949.538 0.977% 15 1.172% 14 Los Angeles CA CSA 6059.7664 $ 29,384.16 $ 31,151.411 4.381% 3 1.143% 15 Montana 5825.0369 $ 828.55 $ 1,071.288 0.151% 78 1.099% 16

Table 2 shows the top 50 source SMAs by $K in current dollars (adjusted from the 2011 actual values). The mix is different, since the bulk commodities do not have as much value per ton as the other traffic. Los Angeles SMA is ranked 3rd in value, and Seattle is 7, indicating the importance of the West Coast links. New York (NJ part) is 6. Aside from Alaska at 5, which represents oil shipments, the others are in the Midwest region till Remainder of Texas at 15 (oil traffic) and San Francisco at 19, higher value electronic products as well as some box traffic from Oakland.

Table 2: Source CSAs ranked by CM$.

Source CSA Sum of Total KTons in 2011 Sum of Total M$ Sum of Total Current M$ Pct CD Rank CD Pct KT Rank KT Chicago IL-IN-WI CSA (IL Part) 209939.0479 $ 253,274.50 $ 281,132.926 39.535% 1 39.609% 1 Chicago IL-IN-WI CSA (IN Part) 55175.8365 $ 26,528.37 $ 31,182.681 4.385% 2 10.410% 2 Los Angeles CA CSA 6059.7664 $ 29,384.16 $ 31,151.411 4.381% 3 1.143% 15 Alaska 611.1651 $ 29,418.48 $ 30,903.433 4.346% 4 0.115% 72 Remainder of Illinois 37526.2767 $ 16,104.25 $ 18,272.613 2.570% 5 7.080% 3 New York NY-NJ-CT-PA CSA (NJ Part) 3526.3233 $ 14,852.10 $ 16,058.291 2.258% 6 0.665% 21 Seattle WA CSA 2859.1249 $ 14,033.83 $ 14,938.620 2.101% 7 0.539% 23 Detroit MI CSA 7000.5924 $ 13,300.71 $ 14,679.652 2.064% 8 1.321% 13 Milwaukee WI CSA 4973.6987 $ 11,938.89 $ 12,801.032 1.800% 9 0.938% 19 Remainder of Wisconsin 7985.3586 $ 11,418.94 $ 12,708.787 1.787% 10 1.507% 11 Remainder of Indiana 8081.9068 $ 10,288.83 $ 11,531.330 1.622% 11 1.525% 10 Remainder of Ohio 7978.5408 $ 8,750.29 $ 10,349.059 1.455% 12 1.505% 12 Houston TX CSA 11326.2218 $ 7,399.65 $ 9,259.763 1.302% 13 2.137% 7 St. Louis MO-IL CSA (IL Part) 9954.6005 $ 6,118.95 $ 7,954.146 1.119% 14 1.878% 8 Remainder of Texas 6211.0128 $ 5,986.44 $ 6,949.538 0.977% 15 1.172% 14 Memphis TN-MS-AR MSA (TN Part) 335.5267 $ 5,714.48 $ 6,227.648 0.876% 16 0.063% 87 Iowa 4230.9783 $ 5,512.83 $ 6,106.593 0.859% 17 0.798% 20 Minneapolis-St. Paul MN-WI CSA (MN Part) 1840.6917 $ 5,453.07 $ 5,970.564 0.840% 18 0.347% 30 San Francisco CA CSA 879.8777 $ 5,574.39 $ 5,866.198 0.825% 19 0.166% 58 Indianapolis IN CSA 2776.1012 $ 4,926.48 $ 5,452.728 0.767% 20 0.524% 24 Philadelphia PA-NJ-DE-MD CSA (PA Part) 1401.5070 $ 4,736.61 $ 5,205.351 0.732% 21 0.264% 38 Remainder of Kentucky 2333.9165 $ 4,583.34 $ 5,144.637 0.723% 22 0.440% 27 Atlanta GA-AL CSA (GA Part) 995.6758 $ 4,663.76 $ 5,085.043 0.715% 23 0.188% 52 North Dakota 8639.0770 $ 4,074.21 $ 5,063.183 0.712% 24 1.630% 9 Remainder of Minnesota 15585.2759 $ 4,150.86 $ 4,834.689 0.680% 25 2.940% 5 New York NY-NJ-CT-PA CSA (NY Part) 654.0200 $ 4,541.15 $ 4,830.031 0.679% 26 0.123% 70 Dallas-Fort Worth TX CSA 2516.4338 $ 4,166.50 $ 4,699.359 0.661% 27 0.475% 26 Pittsburgh PA CSA 1361.7983 $ 3,953.15 $ 4,646.471 0.653% 28 0.257% 40 Remainder of Michigan 13774.2824 $ 3,882.07 $ 4,334.739 0.610% 29 2.599% 6

Norfolk VA-NC MSA (VA Part) 1033.7281 $ 3,826.64 $ 4,186.396 0.589% 30 0.195% 50 Remainder of Pennsylvania 1354.2101 $ 3,912.29 $ 4,157.716 0.585% 31 0.255% 41 Laredo TX MSA 1558.1536 $ 3,792.21 $ 4,044.716 0.569% 32 0.294% 36 Cleveland OH CSA 1807.3842 $ 3,538.90 $ 3,893.894 0.548% 33 0.341% 32 Columbus OH CSA 698.6703 $ 3,239.05 $ 3,452.630 0.486% 34 0.132% 66 Grand Rapids MI CSA 1042.2766 $ 2,908.30 $ 3,270.054 0.460% 35 0.197% 49 New York NY-NJ-CT-PA CSA (CT Part) 529.1685 $ 2,677.69 $ 2,893.360 0.407% 36 0.100% 76 Boston MA-NH CSA (MA Part) 645.5512 $ 2,697.55 $ 2,883.814 0.406% 37 0.122% 71 El Paso TX MSA 1817.6351 $ 2,638.47 $ 2,790.900 0.392% 38 0.343% 31 Remainder of Louisiana 5041.6844 $ 2,116.06 $ 2,682.290 0.377% 39 0.951% 17 San Diego CA MSA 176.7903 $ 2,738.25 $ 2,584.685 0.363% 40 0.033% 97 Charlotte NC-SC CSA (NC Part) 332.5282 $ 2,243.94 $ 2,516.582 0.354% 41 0.063% 88 Cincinnati OH-KY-IN CSA (OH Part) 936.2008 $ 2,146.98 $ 2,425.445 0.341% 42 0.177% 53 Dayton OH CSA 359.7944 $ 2,068.85 $ 2,338.774 0.329% 43 0.068% 85 Remainder of Tennessee 893.2361 $ 2,013.99 $ 2,322.432 0.327% 44 0.169% 56 Remainder of Alabama 2083.0631 $ 2,029.28 $ 2,307.991 0.325% 45 0.393% 28 Baltimore MD MSA 1219.2429 $ 2,098.10 $ 2,284.994 0.321% 46 0.230% 45 Buffalo NY CSA 1063.4213 $ 1,869.71 $ 2,173.482 0.306% 47 0.201% 48 Remainder of Missouri 3139.1773 $ 1,894.86 $ 2,117.642 0.298% 48 0.592% 22 Mississippi 1400.7128 $ 1,805.80 $ 2,052.112 0.289% 49 0.264% 39 New Orleans LA CSA 2720.0991 $ 1,599.99 $ 1,963.791 0.276% 50 0.513% 25

The dollar figures clearly show that the largest Chicago area inputs are: energy inputs, the West coast corridor for retail and manufacturing inputs, and the corridor to the East which we dub the Chicago-New York channel for retail products and manufacturing inputs. Energy inputs are not containerized, but do compete for rail capacity, as well as using pipelines and water transport.

Similar data for the outbound traffic again shows the importance of these corridors. For tonnage, Alaska (virtually all air), Los Angeles, Atlanta, and two Texas locations, and Seattle are outside the region.

Destination CSA Total KT Total Current M$ Pct CM$ Rank CM$ Pct KT Rank KT Cum Pct KT

Chicago IL-IN-WI CSA (IL Part) 216421.063 $282,216.11 46.406% 1 41.446% 1 41.446%

Chicago IL-IN-WI CSA (IN Part) 48693.822 $30,099.50 10.441% 2 4.420% 2 45.867%

Detroit MI CSA 11370.419 $21,701.86 2.438% 6 3.187% 3 49.054%

Los Angeles CA CSA 6874.806 $20,309.24 1.474% 10 2.983% 4 52.036%

Remainder of Wisconsin 8964.190 $19,803.72 1.922% 7 2.908% 5 54.945%

Remainder of Illinois 19908.889 $19,129.68 4.269% 4 2.809% 6 57.754%

Remainder of Texas 26717.713 $17,062.73 5.729% 3 2.506% 7 60.260%

New York NY-NJ-CT-PA CSA (NJ Part) 1905.000 $12,706.74 0.408% 24 1.866% 8 62.126%

Milwaukee WI CSA 5451.218 $12,652.62 1.169% 11 1.858% 9 63.984%

Remainder of Indiana 13048.951 $12,368.89 2.798% 5 1.816% 10 65.801%

Alaska 172.257 $11,121.51 0.037% 91 1.633% 11 67.434%

Minneapolis-St. Paul MN-WI CSA (MN Part) 3209.457 $8,212.22 0.688% 17 1.206% 12 68.640%

Remainder of Pennsylvania 2286.740 $8,002.07 0.490% 20 1.175% 13 69.815%

Atlanta GA-AL CSA (GA Part) 1789.476 $7,190.64 0.384% 26 1.056% 14 70.871%

Remainder of Ohio 7210.888 $7,105.90 1.546% 9 1.044% 15 71.915%

Remainder of Michigan 5189.484 $7,033.23 1.113% 13 1.033% 16 72.948%

Indianapolis IN CSA 5063.104 $6,641.28 1.086% 14 0.975% 17 73.923%

Iowa 3638.336 $6,585.87 0.780% 15 0.967% 18 74.890%

Houston TX CSA 1898.210 $6,504.67 0.407% 25 0.955% 19 75.846%

Cleveland OH CSA 2249.633 $5,401.22 0.482% 21 0.793% 20 76.639%

Dallas-Fort Worth TX CSA 1114.522 $5,288.60 0.239% 36 0.777% 21 77.415%

Remainder of Kentucky 1937.226 $4,262.15 0.415% 23 0.626% 22 78.041%

Seattle WA CSA 3237.443 $3,955.71 0.694% 16 0.581% 23 78.622%

Pittsburgh PA CSA 1640.117 $3,954.96 0.352% 28 0.581% 24 79.203%

St. Louis MO-IL CSA (MO Part) 3027.399 $3,921.81 0.649% 18 0.576% 25 79.779%

Table 4 below ranks destinations by current M$. Only Remainder of Texas,

Destination CSA Total KT Total CM$ Pct CM$ Rank CM$ Pct KT Rank KT Cum Pct CM$ Chicago IL-IN-WI CSA (IL Part) 216421.063 $282,216.11 46.406% 1 41.446% 1 46.406% Chicago IL-IN-WI CSA (IN Part) 48693.822 $30,099.50 10.441% 2 4.420% 2 56.847% Remainder of Texas 26717.713 $17,062.73 5.729% 3 2.506% 7 62.576% Remainder of Illinois 19908.889 $19,129.68 4.269% 4 2.809% 6 66.845% Remainder of Indiana 13048.951 $12,368.89 2.798% 5 1.816% 10 69.643% Detroit MI CSA 11370.419 $21,701.86 2.438% 6 3.187% 3 72.081% Remainder of Wisconsin 8964.190 $19,803.72 1.922% 7 2.908% 5 74.003% New Orleans LA CSA 8903.937 $1,569.04 1.909% 8 0.230% 63 75.912% Remainder of Ohio 7210.888 $7,105.90 1.546% 9 1.044% 15 77.459% Los Angeles CA CSA 6874.806 $20,309.24 1.474% 10 2.983% 4 78.933% Milwaukee WI CSA 5451.218 $12,652.62 1.169% 11 1.858% 9 80.101% Tulsa OK CSA 5316.072 $3,268.59 1.140% 12 0.480% 32 81.241% Remainder of Michigan 5189.484 $7,033.23 1.113% 13 1.033% 16 82.354% Indianapolis IN CSA 5063.104 $6,641.28 1.086% 14 0.975% 17 83.440% Iowa 3638.336 $6,585.87 0.780% 15 0.967% 18 84.220% Seattle WA CSA 3237.443 $3,955.71 0.694% 16 0.581% 23 84.914% Minneapolis-St. Paul MN-WI CSA (MN Part) 3209.457 $8,212.22 0.688% 17 1.206% 12 85.602% St. Louis MO-IL CSA (MO Part) 3027.399 $3,921.81 0.649% 18 0.576% 25 86.251% Grand Rapids MI CSA 2850.498 $3,583.85 0.611% 19 0.526% 29 86.863% Remainder of Pennsylvania 2286.740 $8,002.07 0.490% 20 1.175% 13 87.353% Cleveland OH CSA 2249.633 $5,401.22 0.482% 21 0.793% 20 87.835% St. Louis MO-IL CSA (IL Part) 1954.124 $1,742.28 0.419% 22 0.256% 56 88.254% Remainder of Kentucky 1937.226 $4,262.15 0.415% 23 0.626% 22 88.670% New York NY-NJ-CT-PA CSA (NJ Part) 1905.000 $12,706.74 0.408% 24 1.866% 8 89.078% Houston TX CSA 1898.210 $6,504.67 0.407% 25 0.955% 19 89.485%