New analysis illustrates vital role for freight in Minnesota and Minneapolis–St. Paul metro

Large cities are where the bulk of economic activity resides, so it’s not surprising that they’re also where most traffic congestion occurs. And while clogged roadways inconvenience and frustrate commuters, they also impede the movement of trillions of dollars in goods traveling between different markets.

In fact, the congestion in one market can actually hurt regions hundreds or even thousands of miles away, according to Adie Tomer, a fellow at the Brookings Institution Metropolitan Policy Program and a member of the Metropolitan Infrastructure Initiative.

In particular, Tomer emphasizes the importance of understanding how metropolitan-level trade networks work together to develop targeted freight strategies and transportation investments to support the extensive supply chains that underpin the U.S. economy. Though there is not yet a blueprint for metropolitan freight planning across the country, new data available from the Metro Freight research series at the Brookings Institution will greatly help direct these efforts.

Minneapolis–St. Paul, for example, is the primary freight hub in the Upper Midwest. The metro area produces and consumes a wide range of commodities, with an extensive freight infrastructure that transports goods to and from regional markets and around the world.

tomer

The total goods trade for Minnesota involves $393 billion worth of goods moving in and out of the state. While it’s an average freight-producing state with several clear industrial strengths, there is some disjointedness across industries. “Basically, Minnesota has certain things it does well and certain things it does not do so well,” Tomer explains.

Tomer illustrates this using industry location quotients (LQs), which are one way of quantifying how concentrated an industry is in a region compared to a larger geographic area, such as the state or nation. Industries with high LQs and relatively high total job numbers typically form a region’s economic base. For example, the LQ for energy products in Minnesota is 0.3, indicating that the state mostly buys petroleum and coal from other parts of the country and the world. Similarly, the LQ for transportation equipment is 0.4, which suggests that Minnesota buys this equipment from other places and does not manufacture most of it.

In contrast, the LQ for precision instruments in Minnesota is 2.5. “That is off the charts,” Tomer says. “This shows that [the precision instrument] industry is your economic lifeblood in many ways, even though in some ways it is a relatively small industry.” Other Minnesota industries with relatively high LQs include agriculture, food, and wood industries. “These will continue to produce great value for the state as well.”

Tomer was the keynote speaker the 18th Annual Freight and Logistics Symposium on December 4, 2015, in Minneapolis. View more details on goods trade data in the Minneapolis-St. Paul metropolitan area from Tomer’s presentation. Proceedings from the symposium will be available next month on the CTS website.

Posted in Events, Freight

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