Tuesday, May 13, 2014

Observations on Observations about North America, Part 2: Time and Distance

by Peter R. Geyer, Managing Principal, Geyer Global Partners


When I attend meetings that discuss the risks and opportunities for European companies expanding into the United States and Canada, the sheer size of the North American continent versus the size of the European continent is always mentioned.  Often meeting attendees will be shown an interesting overlay map like the one here, at which point they will either audibly gasp – mainly, I suspect, because that is what they think this is the reaction expected of them – or they will nod knowingly, as they remember back to that interminable drive from Orlando to Miami the last time they were on vacation in the United States.  To give some context of my own to this conversation about size, I will give some points of comparison: the distance between Washington, DC and New York City is roughly the same distance as between Berlin and Prague; the distance between Miami, Florida and Boston, Massachusetts is roughly the same distance as between Rome and Edinburgh; and the distance between New York City and Los Angeles, California is roughly the same distance as between Moscow and Lisbon.

Overlay Map of North America and Europe[1]
 


But these conversations about the size of North America never actually discuss what this distance really means in a practical context; about how distance translates into time; and as any business school graduate will tell you, about how time translates into money.

As we can see from the map above, the United States and Canada are vast countries.  At a combined 19.8 million square kilometers, the United States and Canada have a land mass 94% larger than the European land mass.  When we take population into account, the United States and Canada have a combined population of 351.3 million compared to Europe’s combined population of 739.2 million.  That translates into a population density in the United States of only 34.4 people per square kilometer – only 47% the population density of Europe.  Looking only at averages, this means that a business needs to cover 2.1x as much territory to reach the same number of potential customers.

But averages only take you so far.  While Canada has the lowest population density of any country in the world (3.4 per sq. km.), 80% of that population lives within 150 kilometers of the border with the United States.  80% of the Canadian population also lives in urban – rather than rural – communities, with 1/3 of the total Canadian population living in the cities of Toronto, Montreal, and Vancouver.  While the United States population is slightly more evenly distributed, it is still heavily concentrated in the northeastern states around the Washington, DC/Philadelphia/New York/Boston corridor, in the upper-midwestern “rust belt” states around Chicago/Detroit/Cleveland, and in individual cities in the west and southeast such as Los Angeles/San Diego, Seattle/Portland, Dallas/Houston, and Atlanta/Tampa/Orlando/Miami.  Many western states, such as New Mexico, Wyoming, Montana, and the Dakotas have substantially lower population densities, ranging from 6.3 down to 2.1 people per square kilometer.  

Population Density Map of North America[2]



Unfortunately, when considering population distribution within regions, it is also misleading to only look at the population within the actual boundaries of major cities.  With the flight of the middle class from large cities over the past several decades for a variety of economic and social reasons, the populations of many large cities have shrunk, while the populations of their surrounding suburbs have grown exponentially.  For example, the population within the city limits of Washington, DC is only a little over 632,000 – ranking it the 24th largest city in the United States.  However, when its substantial suburban population is considered, Washington, DC’s population jumps to 2.4 million – ranking it the 8th largest region in the United States.  A similar story is told by Detroit, whose shrinking population within the city limits (701,000) ranks it the 18th largest city in the United States, a status which is offset by its large suburban population (an additional 1.1 million people), which bumps Detroit’s rank up to 11th.  

With a large population spread unevenly over an ever larger area, the trick for any business is not necessarily reaching every customer in every remote corner of Canada and the United States, but is instead reaching within – and perhaps more importantly, between – sometimes widely scattered population centers. With this in mind, perhaps a useful way to visualize time and distance in North America is to look at the distances and amounts of time it takes to transit both goods and people between major population centers.  

First, we will look at air transportation times.  The times estimated are strictly based on the time between gate departure in the city of origin and gate arrival in the destination city on a non-stop commercial flight.  It does not take into account the time it takes to travel to and from airports, nor does it take into account the sometimes significant amounts of time required to pass through ticketing and security screening.  Of course, when traveling to smaller cities, multiple connecting flights are often required, which can add exponentially to time in transit.

Air Travel Times via Commercial Carriers Between Major Cities[3]


New York, NY Washington, DC Atlanta, GA Chicago, IL Dallas, TX Phoenix, AZ Los Angeles, CA San Francisco, CA Seattle, WA Montreal, QC Toronto, ON
New York, NY 0 Hours 1.5 Hours 2.5 Hours 2.67 Hours 4.0 Hours 5.5 Hours 6.0 Hours 6.5 Hours 6.25 Hours 1.5 Hours 1.67 Hours
Washington, DC 1.5 Hours 0 Hours 1.75 Hours 1.8 Hours 3.2 Hours 5.1 Hours 5.75 Hours 5.8 Hours 5.67 Hours 1.75 Hours 1.4 Hours
Atlanta, GA 2.5 Hours 1.75 Hours 0 Hours 2.0 Hours 2.33 Hours 4.0 Hours 4.8 Hours 5.33 Hours 5.25 Hours 2.6 Hours 2.1 Hours
Chicago, IL 2.67 Hours 1.8 Hours 2.0 Hours 0 Hours 2.33 Hours 3.75 Hours 4.33 Hours 4.5 Hours 4.4 Hours 2.0 Hours 1.5 Hours
Dallas, TX 4.0 Hours 3.2 Hours 2.33 Hours 2.33 Hours 0 Hours 2.5 Hours 3.33 Hours 3.8 Hours 4.15 Hours 3.6 Hours 3.0 Hours
Phoenix, AZ 5.5 Hours 5.1 Hours 4.0 Hours 3.75 Hours 2.5 Hours 0 Hours 1.3 Hours 2.1 Hours 2.8 Hours N/A N/A
Los Angeles, CA 6.0 Hours 5.75 Hours 4.8 Hours 4.33 Hours 3.33 Hours 1.3 Hours 0 Hours 1.33 Hours 2.5 Hours 5.3 Hours 4.67 Hours
San Francisco, CA 6.5 Hours 5.8 Hours 5.33 Hours 4.5 Hours 3.8 Hours 2.1 Hours 1.33 Hours 0 Hours 2.0 Hours 5.5 Hours 4.9 Hours
Seattle, WA 6.25 Hours 5.67 Hours 5.25 Hours 4.4 Hours 4.15 Hours 2.8 Hours 2.5 Hours 2.0 Hours 0 Hours N/A 4.5 Hours
Montreal, QC 1.5 Hours 1.75 Hours 2.6 Hours 2.0 Hours 3.6 Hours N/A 5.3 Hours 5.5 Hours N/A 0 Hours 1.25 Hours
Toronto, ON 1.67 Hours 1.4 Hours 2.1 Hours 1.5 Hours 3.0 Hours N/A 4.67 Hours 4.9 Hours 4.5 Hours 1.25 Hours 0 Hours

Next, let us assume that rather than travelling by air, once chooses to travel by road (we could consider traveling by rail, but outside of the Washington, DC/New York/Boston rail corridor, that is a ridiculous notion for anything other than freight).  Times between major cities are listed assuming the use of major interstate highways, and adherence to appropriate speed limits.  No allowance is made for stopping for refueling, rest, or other personal needs.

Driving Times Between Major Cities[4]


New York, NY Washington, DC Atlanta, GA Chicago, IL Dallas, TX Phoenix, AZ Los Angeles, CA San Francisco, CA Seattle, WA Montreal, QC Toronto, ON
New York, NY 0 Hours 4 Hours 14 Hours 13 Hours 24 Hours 38 Hours 44 Hours 46 Hours 46 Hours 6 Hours 8 Hours
Washington, DC 4 Hours 0 Hours 10 Hours 12 Hours 20 Hours 36 Hours 42 Hours 44 Hours 44 Hours 10 Hours 9 Hours
Atlanta, GA 14 Hours 10 Hours 0 Hours 11 Hours 12 Hours 28 Hours 33 Hours 39 Hours 42 Hours 19 Hours 15 Hours
Chicago, IL 13 Hours 12 Hours 11 Hours 0 Hours 15 Hours 28 Hours 31 Hours 33 Hours 33 Hours 13 Hours 8 Hours
Dallas, TX 24 Hours 20 Hours 12 Hours 15 Hours 0 Hours 16 Hours 22 Hours 28 Hours 34 Hours 28 Hours 23 Hours
Phoenix, AZ 38 Hours 36 Hours 28 Hours 28 Hours 16 Hours 0 Hours 6 Hours 12 Hours 23 Hours 42 Hours 36 Hours
Los Angeles, CA 44 Hours 42 Hours 33 Hours 31 Hours 22 Hours 6 Hours 0 Hours 7 Hours 19 Hours 46 Hours 41 Hours
San Francisco, CA 46 Hours 44 Hours 39 Hours 33 Hours 28 Hours 12 Hours 7 Hours 0 Hours 14 Hours 48 Hours 43 Hours
Seattle, WA 46 Hours 44 Hours 42 Hours 33 Hours 34 Hours 23 Hours 19 Hours 14 Hours 0 Hours 46 Hours 41 Hours
Montreal, QC 6 Hours 10 Hours 19 Hours 13 Hours 28 Hours 42 Hours 46 Hours 48 Hours 46 Hours 0 Hours 6 Hours
Toronto, ON 8 Hours 9 Hours 15 Hours 8 Hours 23 Hours 36 Hours 41 Hours 43 Hours 41 Hours 6 Hours 0 Hours

Finally, while sending people between locations in North America is important, perhaps even more important to a business is shipping goods.  While the driving times between cities can have an impact on shipping times, so too can the availability of freight rail facilities, distance from distribution centers if using commercial carriers, and distance from major transit infrastructure such as interstate highways, waterways, and bridges.  For the sake of simplicity, I have listed the typical shipping times between major cities for goods via ground services on commercial carriers.  Of course, for a price, goods can be shipped faster than the times listed, and depending on the nature and bulk of the goods being shipped, time to destination can also be significantly longer.  

Shipping Times Between Major Cities via Commercial Ground Transportation[5]


New York, NY Washington, DC Atlanta, GA Chicago, IL Dallas, TX Phoenix, AZ Los Angeles, CA San Francisco, CA Seattle, WA Montreal, QC Toronto, ON
New York, NY 1 Day 1 Day 2 Days 2 Days 3 Days 4 Days 4 Days 5 Days 5 Days 2 Days 2 Days
Washington, DC 1 Day 1 Day 2 Days 2 Days 3 Days 4 Days 4 Days 5 Days 5 Days 2 Days 2 Days
Atlanta, GA 2 Days 2 Days 1 Day 2 Days 2 Days 4 Days 4 Days 4 Days 5 Days 4 Days 3 Days
Chicago, IL 2 Days 2 Days 2 Days 1 Day 2 Days 3 Days 4 Days 4 Days 4 Days 3 Days 2 Days
Dallas, TX 3 Days 3 Days 2 Days 2 Days 1 Day 3 Days 3 Days 4 Days 4 Days 8 Days 8 Days
Phoenix, AZ 4 Days 4 Days 4 Days 3 Days 3 Days 1 Day 2 Days 3 Days 3 Days 9 Days 8 Days
Los Angeles, CA 4 Days 4 Days 4 Days 4 Days 3 Days 2 Days 1 Day 2 Days 3 Days 9 Days 8 Days
San Francisco, CA 5 Days 5 Days 4 Days 4 Days 4 Days 3 Days 2 Days 1 Day 2 Days 9 Days 8 Days
Seattle, WA 5 Days 5 Days 5 Days 4 Days 4 Days 3 Days 3 Days 2 Days 1 Day 9 Days 8 Days
Montreal, QC 2 Days 2 Days 4 Days 3 Days 8 Days 9 Days 9 Days 9 Days 9 Days 1 Day 1 Day
Toronto, ON 2 Days 2 Days 3 Days 2 Days 8 Days 8 Days 8 Days 8 Days 8 Days 1 Day 1 Day

In the United States, there is a term for the area between the heavily populated centers around New York on the east coast and Los Angeles on the west coast: “fly-over country.”  While this intentionally insulting description disregards the economic, social, and political importance of this vast expanse of land, it does reflect the fact that – relatively speaking – the east and west coasts of the United States contain a substantial proportion of the population and economic activity in the country, with large areas of often thinly populated territory in between.  The same can be said for Toronto, Montreal, and Vancouver in Canada.  Whether considering where to locate a facility, where to develop partnerships, or whether to target specific regional markets, the key for any business in North America to consider is that distance and time are inextricably linked. 

For more information on how Geyer Global Partners can help your business to "Go Global," visit our website at www.geyerglobal.de.

[1] Swissmiss, www.swiss-miss.com.
[2] Encyclopedia Britannica, www.britannica.com.
[3] Average times compiled using publicly available commercial airline timetables.
[4] Average times compiled using www.mapquest.com.  If multiple routes between cities are available, an average was taken of the available routes.
[5] Shipping times are determined in consultation with the United Parcel Service, and reflect UPS Ground service within the United States, UPS Worldwide Standard service between the United States and Canada, and UPS Standard service within Canada.