Economic Development and Transportation, Distribution & Logistics

EYE ON THE PIE: Let's make Indiana a true hub

October 10, 2005

Sometimes, the obvious is ignored. It is obvious that, geographically, Indiana holds a central position in North America. But when we think about economic development, we take this obvious point for granted.

As business grows and incomes rise across the world, the demand for transportation increases. The question for Indiana becomes, "How much does this increase in demand translate into jobs and income for our citizens?"

Most people understand that Indiana does not gain anything by having airplanes cross our skies. We cannot tax such flights for using our air space.

It is not enough for us to improve Interstate 74 through Crawfordsville, Interstate 94 through northwest Indiana, or Interstate 64 across southern Indiana. We profit little from having trucks transport goods across our state on a new section of Interstate 69 unless they originate or terminate some or all of their trip within the state.

Cities prospered in past centuries as "break-in-bulk" points. For example, goods on the Ohio River went from carts to flatboats at Cincinnati and Louisville. Chicago grew as the switching point for cargo and passengers among dozens of rail lines.

More recently, Atlanta prospered when its airport became the most important hub for the Southeast. Indianapolis benefited from a host of interstate and four-lane routes that gave access in all directions.

To sustain prosperity from transportation, several communities in Indiana need to accelerate their efforts to be strong competitors as intermodal transfer points. This means we have to encourage the development of places where freight can be transferred from airplanes to trucks, or truck trailers to rail flatcars.

If you are stopped at a rail crossing today, you will be amazed by the number of containers being carried on flatcars. Some may have come from Korea or China and be destined for final delivery by truck to Logansport, Greenfield or Goshen. Others may be carrying products from Evansville, Terre Haute or Auburn to nations across either the Atlantic or the Pacific.

Indiana has inadequate facilities for intermodal transfers. Yet we have outstanding opportunities in many places throughout the state. Indianapolis International Airport and the nearby Avon CSX rail yard are one such remarkable opportunity. Another exists in northwest Indiana, but no one can decide where. Near the Port of Indiana, closer to Chicago, in a "brownfield," in a cornfield? Other opportunities of various magnitudes are possible at other sites ranging from Peru (Grissom) to Evansville.

One startup has been initiated at the Indianapolis airport (Techpoint) with $2.3 million in state and local incentives. Beyond that, what is being done? Studies. And more studies. The self-evident and obvious are being studied while in other states planning, building and operation are already in effect.

Gov. Mitch Daniels recently made some modest proposals to modernize our highways and the way they are financed. Let us hope that in the weeks or months to come, he will offer a comprehensive intermodal plan that will capture the imagination of the state rather than playing to the timidity of the General Assembly.



Marcus taught economics more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to mortonjmarcus@yahoo.com.
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