BY CLIFFORD F. LYNCH
fastlane
A bridge too close?
ON THE SURFACE, THE PROJECT SOUNDS LIKE A CAN’T-MISS
proposition. To ease border crossing delays in the busy Detroit-Windsor, Ontario, trade corridor, Canada and the state of Michigan
have agreed to build a new bridge over the Detroit River connecting
the two cities. Dubbed the New International Trade Crossing (NITC),
the proposed bridge is expected to alleviate traffic congestion on the
83-year-old Ambassador Bridge two miles to the north.
Project supporters say a new bridge is badly needed to improve
the flow of traffic across the border. The Detroit-Windsor trade corridor represents the busiest international crossing in North
America, serving as a conduit for more than 25 percent of the trade
between the United States and Canada. Right
now, over 10,000 trucks and 4,000 cars cross the
7,500-foot Ambassador Bridge every day, making
it the nation’s most heavily traveled bridge.
Increased traffic in recent years has led to delays
that are said to be costing Michigan manufacturers and shippers millions of dollars. The new
bridge, which would be built at a cost of roughly
$2 billion, would provide the added capacity
needed to meet the future demands fueled by a
recovering economy.
Most believe building the bridge will give
Michigan a much-needed lift, pumping billions of
dollars into the state’s depressed economy. A report by the Center for
Automotive Research in Ann Arbor found that the project would create 6,000 new jobs during each of the first two years of construction,
and 5, 100 jobs for each of the remaining two years of construction. It
also projected that Michigan’s gross state product and personal
income levels would rise by $1.5 billion over four years, and that state
revenues would jump by $150 million in the same period. After construction is completed, bridge operations would mean nearly 1,400
permanent jobs. Private investment is projected to create another
6,800 jobs and contribute hundreds of millions to the state economy.
As if this weren’t enough, the state doesn’t even have to put up the
front money. The federal government is picking up part of the tab,
while Canada has offered to pay Michigan’s share of the construction
costs and recoup it from Michigan’s share of the tolls after the bridge
goes into operation.
Although it’s difficult to imagine that any informed person would
oppose the project, the proposal does not enjoy universal support.
Some critics have suggested that the bridge simply is not needed, but
it goes deeper than that.
The Ambassador Bridge is a toll bridge, with
fees of up to $4.50 per axle for trucks and $4.50
per automobile. It is also privately owned and
operated. For over 30 years, the Detroit
International Bridge Co., owned by Michigan billionaire Manuel Moroun, has controlled bridge
traffic between Detroit and Windsor. Stated
another way, one man has a powerful hold on 25
percent of the trade between the United States
and Canada. Moroun also owns a duty-free store
that has a monopoly on duty-free fuel. He has fought long
and hard to protect what is
assumed to be an attractive
profit, but it appears that
Moroun has lost this battle
and eventually will be forced
to share his traffic with the
new government bridge. (It’s
interesting to note that
although Moroun maintains
the traffic projections used to
justify the new bridge are
“wildly optimistic,” he has also floated a proposal to build a new bridge himself.)
While this situation is somewhat unique in the
United States, it brings into focus the discussion
of private funding to help improve our infrastructure. I suspect any private entity that funds
infrastructure will not be too pleased to see government competition come along at a later date.
To me, it suggests once again that the government should do what it has always been bound to
provide—an infrastructure sufficient to support
commerce and the national defense. ;
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider
of logistics management advisory services, and author of Logistics
Outsourcing – A Management Guide and co-author of The Role of
Transportation in the Supply Chain. He can be reached at
cliff@cflynch.com.
