State Freight: Michigan

By Alex Riemersma, Ally Logistics Pricing Analyst

 

THE WOLVERINE STATE, THE GREAT LAKES STATE, AND THE HEART OF THE AUTOMOTIVE INDUSTRY

Michigan, the Wolverine State, is home to 9.987 million people, two of the most prominent American automotive manufacturers, and is surrounded by three of the five largest freshwater lakes in the world. Its largest city, Detroit, possesses a rich industrial history. The novel industrial concept of mass production through assembly lines allowed for Detroit to flourish in the early part of the 20th century. 

During WWII, Detroit became America’s ‘arsenal of democracy’ as its industrial complex produced military equipment en masse. While the 21st century has not been kind to Detroit’s automotive industry, the state of Michigan still ranks 6th out of the 53 exporters in the United States.

THE AMERICAN HUB FOR THE AUTOMOTIVE INDUSTRY

The two automotive behemoths who call Michigan home are headquartered in Detroit: Ford Motor Company and General Motors. The unique positioning of Detroit as a headquarters for automobile production affords the opportunity to export products to Canada. 

In 2018, motor vehicles, motor vehicle parts, and motor vehicle bodies made up Michigan’s top 3 exported products to Canada for a total valuation of $14.1 billion. Michigan also exported approximately $4.3 billion worth of automobile products to Mexico. 

While Ford and GM are the headliners of the automotive industry in Michigan, almost every foreign and domestic automaker has a production site within the state. 

MICHIGAN AGRICULTURE

Another key part of Michigan’s economy is agriculture. Michigan’s production of dairy products ranks second among all states. Beyond dairy, Michigan also ranks second in agricultural diversity, producing more than 300 agricultural commodities. 

The southern half of the lower peninsula has the most farms, largest amount of land in crops, highest yields per acre, and the greatest volume and value of crops, animals, and animal products within the state.

THE MICHIGAN TRUCKLOAD MARKET

According to The Observatory of Economic Complexity (OEC), Michigan ranks 4th out of the 53 states and territories in the United States. As far as the truckload market in the state of Michigan is concerned, the picture becomes rather simple. While Michigan is a relatively large exporter, it imports more than double the valuation of goods than it exports. Most of these imports are delivered to the most densely populated regions within Michigan, chiefly Detroit and its suburbs of Warren, Novi, Rochester Hills, and Sterling Heights.  

Because so many goods are imported to the eastern portion of Michigan, the market for truckload capacity is loose. More loads coming into Detroit than leaving leads to an oversupply of trucks in the area. Finding a cheap truck to move a shipment outbound from Detroit will not be difficult. Conversely, finding a driver willing to deliver into the Detroit market may be more costly given the low load-to-truck ratios coming back out. 

The western portion of the state exhibits the opposite behavior.  Between agricultural and manufacturing goods, the Grand Rapids market sees more trucks leaving its boundaries than arriving. It is cheaper to send a truck into Grand Rapids than it is to secure outbound capacity.  It’s proximity to Indianapolis, Chicago, and Milwaukee make it a desirable inbound location.  

Grand Rapids itself is one of the fastest growing cities in the state and is already the second most populous. Home to companies like Meijer, Spectrum Health, the privately-owned Amway (and of course, Ally Logistics) Grand Rapids is becoming the state’s hub in the west.  

MICHIGAN QUICK FACTS

Population: 9.987 million people, 10th largest state

Largest Cities

• Detroit – 661,193 people
• Grand Rapids – 203,644 people
• Warren – 132,644 people

Mobility & Automotive Manufacturing:

• Penske Automotive Group
• Ford Motor Company
• General Motors
• Lear

Chemicals

• Dow

Advanced Manufacturing

• Whirlpool

Medical Device Technology

• Stryker

Fintech

• Rocket Companies

Agriculture

• Kellogg Co

Energy

• DTE Energy