Intermodal Networks Can Boost Appalachia’s Economy, New ARC Study Shows November 2009

WASHINGTON, November 16, 2009—The Appalachian Regional Commission (ARC) has released a major new study, Network Appalachia: Access to Global Opportunity, that assesses the increasing commercial importance of intermodal transportation networks for economic development in the 13-state Appalachian Region.

The study underscores the opportunities afforded to Appalachia by the growth of complex new international trade lanes to broaden its commercial links with the nation and the rest of the world. It develops a comprehensive transportation strategy to ensure the domestic and international market access necessary for Appalachia to successfully compete in the global economy.

The study also shows how Appalachia's strategic location, amidst some of America's strongest production centers and consumer markets, positions it as a natural crossroads of intermodal transportation networks for domestic and international commerce.

Moffatt and Nichol, widely recognized as one of America's leading consultants on international trade and transportation issues, carried out the technical research on which the study is based. A multi-disciplinary team of transportation, international trade, and economic development experts provided oversight and guidance of the study, which reviewed changing macroeconomic and demographic trends over the past six decades and analyzed the effect of these changes on both consumption and production patterns. It also examined changes in the flow of both domestic and international commodities and compared these changing logistical patterns to the Region's current transportation capabilities.

The study confirmed that:

• Global trade is increasing twice as fast as global gross domestic product.
• Transpacific trade routes to Asia and transatlantic trade routes to Europe and the Middle East will remain strong, while trade routes to both Canada and South America show significant growth potential.
• The global supply chain is intermodal (integrating highway, rail, and marine transportation systems) and increasingly containerized. Coastal ports serve as primary gateways for global commerce.
• Intermodal coordination can increase transport capacity, velocity, and reliability; improve cost efficiency; and enhance energy and environmental efficiencies.

Following the completion of the initial research, the study team hosted a series of regional workshops that engaged more than 500 civic, business, and academic leaders from across Appalachia directly in the planning process. The team then developed the Network Appalachia strategic plan for the twenty-first century, which builds on the commercial importance of the Appalachian Development Highway System. The plan features three primary components:

1. Continue to develop the 3,090-mile Appalachian Development Highway System, 84 percent of which is now open to traffic (as of September 30, 2009). System completion will produce $3.2 billion in new wages, $5 billion in increased economic activity, and 80,500 new jobs by 2035.
2. Establish the Appalachian Development Highway System as a regional highway foundation for a strategic network of Intermodal Corridors of Commerce. This balanced system of interconnected highway, rail, and inland waterway corridors is Appalachia's direct connection to both domestic and international markets. Models of such intermodal success include the emerging Norfolk Southern Heartland and Crescent Corridors, the new CSX National Gateway Corridor, and the proposed inland waterway Marine Highway System.
3. Develop a growing system of inland ports to serve as key interchanges between the Region's local economies and its transportation system. Patterned after successful models in Front Royal, Virginia; Huntsville, Alabama; Somerset, Kentucky; Lenoir, North Carolina; and Dubois, Pennsylvania, these transportation and logistics centers enhance the competitiveness of existing local businesses while helping attract new enterprise and employment to host communities.

The study team also drafted a formal planning and development framework that stresses the importance of stronger advocacy, including new partnerships between inland and coastal regions; expanded planning focused on interjurisdictional and intermodal coordination; and increased investment emphasizing new and expanded public/private cooperation.

In noting the success of the Appalachian Development Highway System in facilitating commerce, the growth of new intermodal corridors, and the expansion of inland ports, the team stressed the opportunity to build on this transportation momentum to achieve the domestic and international market access that will be critical to Appalachia's continued economic development.

The study is available on the ARC Web site at www.arc.gov.