ISU College of Business recommends virtual port
June 24, 2010
Members of the College of Business staff started a study for the Des Moines Area Metropolitan Planning Organization more than 10 years ago. The conclusions of that study have finally been put into effect.
The planning organization, along with the state and federal transportation departments, decided in 1999 to look into ways to make transportation through the Des Moines area more efficient.
Des Moines has a desirable location for international trade due to its location near two interstate highways, several railroads, the Des Moines International Airport and the Foreign Trade Zone.
Clyde Walter, professor of supply chain management, was part of a group of four chosen to participate in the study.
Iowa State’s business school was chosen to complete the study because it has a specialized major: transportation and logistics. Walter said a small number of the staff focused on “studying the physical flow of products and materials and the information pertaining to this flow.” Walter and his fellow staff members thought they would be a good fit to work on the project for Des Moines.
As Walter and his colleagues, Richard Poist, Michael Crum, and Paul Dyer, completed the study, they recommended to the planning organization that they create a virtual port.
“If a port of any kind — seaport, airport, railroad terminal — is a place for the moving or transferring physical shipments,” Walter said, “then a virtual port is the transfer of information about shipments.”
The team recommended setting up a virtual port, otherwise known as an e-port, first because they were not sure how effective a port would be. An e-port “takes it slow” by determining how much web traffic they get to the site.
While the team did not figure cost estimates for an actual brick and mortar port, Walter said they knew that computers and operators were far less expensive than building materials and land.
Walter and the team finished the project in 2001. The economy and the business world have changed drastically since then, including the shutdown of Maytag in Newton. When Maytag closed, so did the only container-handling facility in central Iowa that could transfer eight-foot wide shipping containers to and from railcars.
“The virtual port can help potential shippers find alternatives, which may be in Chicago, Omaha, Kansas City or Minneapolis,” Walter said.
He added that having a port, whether it is virtual or physical, will help Des Moines compete with its neighboring metropolises like Chicago and Minneapolis.
Now, Walter said the planning organization must wait to see how much use comes of the e-port.
“If the virtual port helps Iowa businesses increase their economic activity, then, but only then, it may be expanded,” Walter said. “But if additional Iowa firms do not benefit from international markets, then a virtual port can be terminated much more readily and with less financial loss than a physical port would incur.”