Transport Corridors in North America

Authors: Dr. Jean-Paul Rodrigue and Dr. Brian Slack

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1. Corridors and Economic Development

Transport corridors are receiving a growing level of attention, particularly with the surge of containerized maritime freight and the setting of more efficient – time and cost-wise – freight distribution systems. Transport corridors can be seen as backbones of transportation networks - linking major articulation points (e.g. hubs) - and towards which freight and passenger flows converge. Most often, they lie at the intersection of economic, demographic and geographic spaces as they perform both market-serving and market-connecting functions. Thus, the corridor as a notion is neither temporally nor spatially immutable, but rather dynamic, contingent on such key factors as economic context (e.g. trade liberalization), investments in infrastructures, and technological changes (e.g. information corridors) and policies. Corridors come in two main categories:

• Formal corridors. They tend to be constructs trying to expand the planning and investment framework of public and private actors along them. On many occasions a form of governance, or at least a forum, has been set in place.
• Functional corridors. They represent an existing structure of flows along some infrastructure. The corridor is thus an operational reality.

The most structured corridors are obviously those that combine a formal and a functional characteristics. Transport corridors can also display physical variations on a modal basis as infrastructure layout becomes a determining factor. While airline flow configurations show greater autonomy, rail, road, and maritime transport rely more on accessible physical infrastructures. Being fundamentally a spatial notion, transport corridors are observable throughout the entire spectrum of geographic scales: from an urban setting, to a regional level (e.g. Boston-Washington), to a national (e.g. the Interstate and the TransCanada Highway) and an international scale (e.g. maritime and air gateways).

The scale and scope of globalization has created an environment where the transport sector is coping to adapt to an expanded geography of distribution. This is particularly the case for North America where large distances are involved and because of the scale and scope of the production, distribution and consumption taking place. The increasing liberalization and globalization of trade have made necessary a restructuring of North American transport corridors. These include three main longitudinal (north, central and south) and four latitudinal (west coast, central, NAFTA and east coast) axes. Ongoing deregulation combined with the North American Free Trade Agreement (NAFTA) concluded in 1994 following the Canada-USA Trade Agreement (CUSTA) in 1991 have had some impact on North American transport corridors, firstly, by increasing overall transborder freight traffic and, secondly, by emphasizing North-South regional corridors at the expense of long-haul East-West intra-national routes. The most prevalent transborder corridors are:

• The Toronto-Windsor-Detroit-Chicago corridor which is one of the densest and most integrated. The geography of the Great Lakes creates a funnel effect with the Niagara peninsula and the Windsor-Sarnia region as the only outlets. At the other end of the mid-continent (NAFTA) corridor is the Laredo inland port, a major gateway into Mexico. About a third of the volume involves auto parts produced in Southern Ontario and in the border regions of Mexico, which are used for low-cost car manufacturing in the Southeast states. The mid-continent corridor also has an extension reaching Winnipeg.
• The Vancouver-Seattle corridor in the Pacific Northwest and its counterpart the Los Angeles-San Diego-Tijuana corridor.
• The Montreal-New York corridor, which connects the Quebec-Winsor corridor to the Boston-Washington megalopolis.

The NAFTA Corridor links the two largest land gateways of North America, Detroit, Michigan and Laredo, Texas. It dominantly relies upon trucking as about 65% of the value of the NAFTA trade is serviced by this mode. However, it is far from being a continuous corridor as northbound flows of Mexican imports and the southbound flows of Canadian imports dwindle as the distance from their respective borders increases. The threshold is around the Tennessee / Kentucky range, past which the respective flows are very small.

Clearly, a transfer of freight traffic and activities from traditional East-West corridors to regional North-South axes is in process. This is not to say that the role of traditional latitudinal routes are to be neglected. Firstly, they are of prime importance to internal freight and passenger movement and, secondly, the Quebec-Chicago and Boston-Washington corridors remain core regions of North American transport activities.

3. North American Gateways

Gateways remain a relatively constant component in the global space of flows. They can be seen as semi-obligatory points of passage linking the global with the regional and the local. Gateways come in three major categories linked with the mode of entry, whether land, maritime or air. Like other gateway system around the world, North American gateways, particularly maritime and air gateways, have been quite stable in time, implying that the dominance of gateways such as Los Angeles or New York is not much been challenged. Still, this does not prevent new gateways to emerge and consolidate, such as Savannah (maritime) or Laredo (land).

Land gateways are those that have experienced the most changes, as NAFTA helped restructure commercial flows in North America. They commonly have a simple transit function with some nearby logistics and manufacturing activities, particularly when there are significant wage and regulatory differences, such as the case between the United States and Mexico. The Maquiladoras, a border region system of manufacturing activities mostly servicing North American supply chains, are interfacing with the North American transport system through a series of land gateways, mainly centered around Southern California, El Paso and Laredo. They are dominantly servicing an import function, expanded under NAFTA trade, and connected to corridors of continental freight circulation. Manufacturing tends to take place on the Mexican part and logistical activities managing this freight take place on the US part.

The US-Canada border shows a different dynamic as the gateway in this case is simply a point of transit for medium/long distance truck traffic (some rail) between manufacturing and consumption areas. The border region itself, even near gateways, has not seen a significant accumulation of logistical activities, particularly because the Canadian and American economy are already fairly integrated and the bulk of the Canadian economic activities is located within 150 km of the border anyway.

Air gateways are linked with major metropolitan areas and tend to have more inland locations as they are not bound to strong transshipment constraints but to the rationale of moving air freight as close as possible to its final destination. Maritime gateways are large terminals with strong high capacity inland connections (rail and road). Due to congestion and lack of space for logistical activities near maritime terminals, the emergence of inland ports (such as satellite terminals) appears to be a significant trend, well developed in Europe but emerging in North America. An important characteristic of North American gateways, particularly maritime gateways, is the imbalanced traffic, a reflection of the negative trade balance that has endured in the United States since the 1990s. For instance, of the total value of trade handled in 2007 by American maritime gateways, imports accounted for a staggering 73%. The structure of global trade thus impacts heavily on the operations of North American gateways.

4. Corridors and Inland Freight Distribution

Although North America has a lattice of highways connecting all the major metropolitan areas, it the long distance rail corridors supported by an intermodal rail system that play the most significant role in commercial flows. It accounts for close to 40% of all the ton-miles transported in the United States, while in Europe this share is only 8%. Rail freight in the United States has experienced a remarkable growth since deregulation in the 1980s (Staggers Act) with a 77% increase in tons-km between 1985 and 2003.The main growth factors for rail activity in recent years have been linked with a surge in international containerized trade, particularly across the Pacific, a growth in the quantity of utility coal moving out of the Powder River basin and a growth of the Canadian and Mexican transborder trade. Intermodal and coal represent the two most important sources of income for most rail operators. The two largest North American railroads, UP and BNSF, derive a sizable share of their operating revenue from long distance intermodal movements (landbridge) originating from the Pacific Coast. The construction and upgrade of intermodal rail terminals has been a prevalent trend to support this system of freight distribution.

The emergence of landbridges is a good example of the setting of an intermodal freight distribution system relying on long distance rail freight corridors. A landbridge has many definitions but can be summarized by a long distance rail corridor connecting two major port gateways on different maritime facades. The main North American landbridge is linking two major gateway systems; Southern California and New York/New Jersey via Chicago. Thus, the North American landbridge is mainly the outcome of growing transpacific trade and has undergone the containerized revolution; container traffic represented approximately 85% of all rail intermodal moves. Landbridges are particularly the outcome of cooperation between rail operators eager to get lucrative long distance traffic and maritime shippers eager to reduce shipping time and costs, particularly from Asia.

Long distance intermodal rail corridors are also planned in Mexico. Kansas City Southern de Mexico (KCSM, a subdiary of Kansas City Southern) is building an intermodal terminal next to the port of Lazero Cardenas. KCSM plans to establish a new international intermodal corridor stretching 1,300 miles across Mexico to the border crossing at Laredo, Texas. At Laredo, the Kansas City Southern system that connects to major American rail hubs, namely Chicago and Kansas City, takes over.

However, a number of factors, such as road congestion, infrastructure capacity issues and higher fuel prices, challenge the advantages of the landbridge, particularly for long distance trade. For instance, in 2007, shipping a forty foot container from New York to Korea cost about $3,000 if the all-water maritime route through the Suez Canal is used and $9,000 if shipped by rail to a West Coast port and then across the Pacific. Thus, this form of rail intermodalism appears to have reached a phase of maturity. Still, the market segment of domestic (North American) rail intermodalism is expected to grow substantially as the only available alternative to long distance trucking. This will lean on the setting of a variety of inland terminals acting as load centers for the respective market areas.