Transportation a driver in Northwest Indiana

Northwest Indiana won't be the next Silicon Valley. But it can pull its economy up by the bootstraps by finding better ways to ship goods.

That viewpoint was bolstered by a draft study issued Wednesday showing transportation and allied industries in Northwest Indiana have a total economic direct impact of $4.45 billion per year and are responsible for 39,555 jobs.

"You have to remember, the better transportation system you have in an area, the better you can serve industry, particularly ones that use just-in-time delivery," said John Lanigan Sr., founder of Mi-Jack Products of Hazel Crest, Ill.

Lanigan sat at a table at Purdue University Calumet in Hammond with about two dozen others Wednesday morning to hear the study results and what local leaders had to say about it. Mi-Jack Products is a world leader in the manufacture and sale of heavy lifting equipment for railroads and ports.

The study released Wednesday was sponsored by Purdue Calumet and the Lake County Integrated Services Delivery Board, which oversees WorkOne employment centers and workforce training in Lake County.

Numerous studies have shown a close link between transportation and economic development, according to Amlan Mitra, an associate professor of economics at PUC and author of the study.

The way to maximize the value of the transportation industry is to entice shippers to transfer, store or process cargo in Northwest Indiana, Mitra added.

"We need to look at alternate modes of transportation," Mitra said. "That's a message we can get from this study. We need to go for intermodal."

Intermodal ports transfer cargo from one mode of transportation to another. Those modes are ship, rail, truck and/or air. Indiana has only a few such facilities.

The Port of Indiana at Burns Harbor is a local example of an intermodal port, transferring cargo between ships, truck and rail.

Lanigan said Indiana currently lacks the intermodal facilities to compete with states like Illinois, which has more than 30 well-developed centers.

Mitra emphasized his report is mainly a snapshot of the transportation, distribution and logistics industry -- known as TDL in industry jargon -- as it exists in the region. Its present impact can provide a basis for decision makers as they contemplate ways to expand it.

The value-added impact of TDL is huge at almost $27 billion, according to Mitra's study. Value-added impact is a measurement that factors in all benefits created by the industry, including wages, incomes, rents, corporate profits and excise and sales taxes paid by individuals.

"We need to analyze this and create a strategy ... where we can say to legislators or the RDA (Regional Development Authority), this is what we need to do," said Keith Kirkpatrick, a board member of the Lake County Integrated Services Delivery Board.

TDL businesses employ 6.4 percent of the Northwest Indiana workforce, according to the study. That is slightly below levels in Indiana, 7.3 percent, and the United States, 6.9 percent.

The lower percentage here may come as a surprise to many, considering all the trucks and trains passing trough the region. But much of that is through traffic, with no stops here to transfer cargo.

The TDL industry employs 26,265 people directly in the region. Another 4,228 are employed at firms serving the industry. And another 9,060 jobs are supported by money spent in the community by TDL industry workers.

Wages are not as high in some transportation sectors as they would be in manufacturing, but in general the jobs still pay good wages by today's standards. Median annual wages for a truck driver in Northwest Indiana are $42,010 per year, according to the study. Crane and tower operators make median wages of $37,640 annually.

TDL was one of the state's targeted industries for growth for the Indiana Department of Commerce under previous Democratic governors, and it remains a priority under Gov. Mitch Daniels.