Freight Group Says St. Louis Region Has Undersold Role as a Logistics Hub

Freight Group Says St. Louis Region Has Undersold Role as a Logistics Hub
May 2, 2016 Matthew Hibbard

This story was originally published in the St. Louis Post-Dispatch on May 1, 2016.  

The St. Louis region is the farthest point north on the Mississippi River before a barge encounters locks and dams, and is home to two international cargo airports.

Four interstates slice through the area, as do six Class 1 railroads.

“We need to do a better job of telling people what we have to offer. And when we do this, it needs to be regional,” said Mary Lamie, executive director of the St. Louis Regional Freightway, the region’s freight district that officially launched Wednesday. It falls under the umbrella of Bi-State Development, whose operations include Metro Transit and the St. Louis Downtown Airport.

Its purpose is to coordinate planning and projects for the region’s freight and shipping infrastructure, as well as to expand the local industrial business market on both sides of the Mississippi. It also will work to create public-private partnerships.

Other cities have aggressive marketing campaigns, and higher rates of freight growth, Lamie said.

But getting funding to pay for hundreds of millions of dollars in road and bridge work to help move that freight — upgrades that appeal to shippers — could be a significant challenge, given strong national competition for federal money to help fund such projects. And other regions are working to tout themselves to freight operators as well.

And a couple of years ago, there wasn’t even a list of the freight strengths of the St. Louis region, Lamie said.

Now a marketing plan is being developed, and is a place for shippers to quickly get information in one place at a time when predictions show freight traffic is expected to grow substantially in the coming decades.

“When it comes to marketing St. Louis, we have been out-jazzed and out-pizzazed. It’s time that we stand up and recognize the tremendous assets we have and tell the world about them,” said Dennis Wilmsmeyer, executive director of America’s Central Port who is chairing the Freightway’s marketing committee.

Freightway’s operating budget is $850,000 for fiscal year 2017.

Donald Broughton, a senior transportation analyst for investment bank Avondale Partners, cited the region’s location and assets as why the region’s freight industry has potential for growth, including its history as a trading post that became a center of commerce.

But the St. Louis area is not without downfalls to businesses deciding whether to locate here.

“The big disadvantage is tax policy,” he said.

Broughton cited income tax rates in Missouri and Illinois, as well as St. Louis’ 1-percent earnings tax, as deterrents to businesses such as trucking firms choosing to locate here.

Nearby Tennessee is a haven for trucking companies, he said. The state doesn’t have an income tax, but does have a “hall tax,” which is a 6-percent tax on interest and dividends.

Local officials outlined last week a framework for bolstering and better promoting the local freight industry. Those plans include pushing for hundreds of millions of dollars of infrastructure projects such as replacing the 126-year-old Merchants railroad bridge over the Mississippi River for $222 million. The bridge’s owner, the Terminal Railroad Association of St. Louis, would pay some of that cost.

It also called for big changes to Interstate 270, including widening the road to six lanes from four between Illinois Route 111 and Lilac Avenue in north St. Louis County, estimated to cost between $350 million and $400 million, and replacing its bridge over the Mississippi with a six-lane span for between $160 million and $175 million.

Relocating a 1.1-mile stretch of Illinois Route 3 in St. Clair County, from River Park Drive in East St. Louis south to Monsanto Avenue in Sauget, also is a priority.

Federal grants already are being sought for some of this work, including $75 million for a new Merchants bridge, $5 million for a freight study to be conducted by the East-West Gateway Council of Governments and $30 million for the Interstate 270 work.

“It’s significant to not overlook the local and regional perspective here, given what they have control over and can better tailor strategies and investments in light of local industries and consumers,” said Joseph Kane, a senior research assistant who studies freight at Washington-based Brookings Institution.

He said St. Louis was among other metropolitan areas in recent years to look at ways to improve moving freight. Others include Minneapolis, Chicago and Portland, Ore.

Gregory Nadeau, administrator of the Federal Highway Administration, came to Wednesday’s kickoff for the freight district at Bissinger’s headquarters and chocolate factory at 1600 North Broadway — on the riverfront, with views of the new Stan Musial Veterans Memorial Bridge and railroad tracks — and hailed St. Louis’ location as ideal for barge, rail, truck and air cargo.

But he acknowledged the competition for federal money, quipping that he’s heard it’s easier to get into Harvard University than to get a federal TIGER grant.