Forum: freight transportation aids state's economic competitiveness

Agriculture, mining, and manufacturing are key industries in Minnesota that depend on rail.
Freight transportation is vitally important to jobs and economic competitiveness in Minnesota. This was the common message of the speakers at the Transportation Policy and Economic Competitiveness Forum held September 20 in Minneapolis.

The forum was part of a two-year project by researchers in the U of M's Humphrey School of Public Affairs. The project is exploring ways to understand and enhance the value of freight transportation, particularly freight rail, to Minnesota's economy, local communities, and the surrounding region.

Lee Munnich and Tom Horan, two of the researchers, shared interim findings from the study. Through data analysis and interviews with national and regional experts, the research team found that freight rail plays a vital role for key Minnesota industries. Growth in Minnesota's Gross State Product, for example, has been stronger than the national average each year during the economic recovery in several key industries dependent on rail: agriculture, mining, and manufacturing.

Freight rail's value, however, "is under-recognized in comparison to other modes of transportation," Munnich said. "Public perception often leans against freight rail due to its behind-the-scenes benefits but visible nuisances."

Next steps in the study include creating policy recommendations and sharing them with partners, communities, and the public, Horan said. The project, funded by BNSF Foundation, wraps up in 2014.

The forum then turned to perspectives from public- and private-sector leaders. Matt Rose, chairman and CEO of BNSF Railroad, stressed the importance of efficient freight networks in enabling U.S. workers to compete in the world market. Good supply chains also have the potential to help repatriate high-value jobs from offshore locations, he said.

Moving forward, what does the freight industry need? "It needs to be able to grow—on the highways, the railroads, the rivers, and at the ports," Rose said. Massive capital investments will be needed to handle a projected 60 percent increase in total freight tonnage by 2040. He added that the Humphrey School's study has important implications not just for Minnesota but also for many other states and Washington.

U.S. Sen. Amy Klobuchar also emphasized the importance of exports for economic growth. The diversity of Minnesota's economy, she said, helped us "keep our head above water" during the economic downturn—and the common thread among those diverse industries is exports. "We have to invent things and export to the world, and we're not going to be able to do that if we don't have a transportation system that matches our 21st century economy," she declared. "There is such a possibility for growth if the private and public sectors make a major commitment to investment."

The forum also included two panel discussions featuring businesses and local policymakers. Several noted the need to maintain our current competitive edge with other countries. For example, Mahendra Mishra, assistant vice president of Esser Steel, explained that mining plays a huge role in the state's economy, and "rail freight and mining go together... We don't want a Gulf Coast steel mill to procure its inputs from as far away as Europe."

Former U.S. Congressman James Oberstar put his closing stamp on the forum: "Unless we resolve nationally to make a greater focus on freight and understand its role in our national economy, we're not going to be competitive in the international marketplace."