Department of Operations & Supply Chain Management

Perry's Corner: Proximity Meets Priority

July 7, 2010

Perry A. Trunick
Associate Editor, Inbound Logistics Magazine
OSM Adjunct Faculty

Whether you measure in US or Canadian currency, the nearly $2 billion in trade that flows back and forth across the US-Canadian border each day is a big number.

"Canada and the United States made a historic move to sign a free trade agreement in 1988, which has led to the greatest trading relationship between any two countries in the history of the world," observes John Baird, Canada's minister of transport, infrastructure and communities. The $2 billion daily trade flow represents a tripling of trade since that agreement was signed.

Baird further points out that Canada-US trade supports 7 million US jobs. The Detroit-Windsor corridor handles roughly 30% of that trade, accounting for $130 billion per year. Every day, 8,000 trucks use the border crossing.

Baird was in Detroit to discuss what he declared to be the most important infrastructure project in Canada - an additional bridge across the Detroit River connecting Detroit and Windsor. And, not stopping there, he urged support for a second new bridge.

The arguments are compelling. Canada has committed up to $550 million to help jump start the project. Baird sees thousands of jobs being created on both sides of the border as a result of the increased trade. That will start, of course, with construction jobs, but the Canadian commitment will help Michigan meet federal guidelines and obtain funding to begin additional infrastructure projects in the area.

For their part, the Canadian governments (federal and local) are committing billions of dollars to this project, says Baird.

Adding 30,000 jobs to the Detroit-Windsor area, as Baird suggests could happen, sounds tempting enough to garner support in the region, but the true impact goes well beyond the region, reaching people and businesses who have no vote on the project.

Reducing congestion at the busiest crossing in North America would improve transport efficiency for the motor carriers using the Detroit-Windsor corridor. That also translates into fuel savings and reduced emissions. A faster, more reliable traffic lane can help some companies reduce safety stocks that have had to exist to buffer against delays.

Perhaps the biggest boon for trade, a truck lane in each direction, is not in the plan. Such a move could improve efficiency even more. It could also enhance safety by not mixing cars and long-haul trucks in an already tight, congested space. And, the segregation of goods vehicles from passenger vehicles could enhance security by improving the clearance and inspection processes.

This is clearly a bridge to somewhere, but it could use a little additional tweaking to deliver even more benefit to logistics and supply chain management. That would expand the impact of the projected bridge (and we would hope, "bridges") beyond the region and demonstrate what can be accomplished when the whole supply chain is considered, and not just one node.

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