Great Logistics Sites: The Pursuit of Excellence
Throughout the United States, local, regional, and state economic development authorities are ramping up investments in transportation and logistics infrastructure to stimulate and sustain business growth.
Excellence is a subjective term. What is ideal for one may be ill-suited for another.
But when it comes to logistics site selection, just about everyone can agree on baseline standards for a great site: excellent location, superb facilities, easy access to multiple transportation modes, tax credits and incentives, and a talented, motivated workforce.
To give you a better idea of how various elements combine to make an area a great logistics site—keeping in mind different types of companies and industry-specific demands—here's a close-up look at five locations across the United States that are building a foundation for transportation and logistics greatness.
Logistics is Hoppin' in Joplin
Situated in the southwestern corner of Missouri—near the Kansas, Oklahoma, and Arkansas borders—the Joplin metro area's geographic location serves national markets nearly as efficiently as larger cities such as Chicago or Kansas City, reports the Joplin Chamber of Commerce.
More than five million people live within a 150-mile drive or flight of the Joplin area. In terms of mode access, Interstates 40 and 44 (east-west) and U.S. Highway 71 (north-south) connect the city to every region in the country; and four airports within a 110-mile radius provide cargo services to markets throughout the world.
The Joplin area is home to 50 major motor freight carriers, two Class I railroads, and a short-line carrier.
Given such a dense transportation network, the Joplin metro area has become a distribution and value-added logistics hub for many companies including General Mills, La-Z-Boy, and Owens-Corning.
Additionally, Wal-Mart's headquarters is 45 miles away in Bentonville, Ark., so the area serves as a distribution nexus for the retailer's suppliers. In fact, Joplin is located within a two-hour drive of six Wal-Mart distribution centers, giving the region the logistics clout of serving one of the world's foremost supply chain leaders.
As far as ongoing industrial development, the Joplin area has a number of buildings available that are suitable for warehousing and distribution operations, according to the Joplin Business and Industrial Development Corporation (JBIDC), a not-for-profit corporation that serves as the financier and developer of the region's speculative building program. To date, JBIDC has financed and built six buildings.
Bolstering its transportation and distribution footprint is a labor pool of 90,000 workers—more than half of whom have some college education, and 94 percent holding high school diplomas.
The state government is also helping businesses plan for a long-term presence in the Joplin area. Over the years, Missouri has developed a competitive package of incentives for many industries locating or expanding in the state, including tax credits, gross payroll rebates, and property and sales tax exemptions for qualifying businesses based on job creation and investment.
Gaining Ground in Greensboro
The rapid growth of logistics and transportation infrastructure in and around Virginia's ports is rippling throughout the region. Greensboro, N.C., located in the heart of the Piedmont Triad region, is also strategically positioned as a budding distribution hot spot, with convenient links to ports throughout the Southeast.
"Greensboro is only three hours from the deep-water Port of Wilmington and proximate to the ports of Norfolk and Savannah," says Dan Lynch, president of the Greensboro Economic Development Alliance. "These deep-water ports are within 700 miles of more than 170 million American and Canadian consumers and 70 percent of the U.S. industrial base.
"Because of this close access to a variety of deep-water ports, as well as strategic location at the intersection of I-40, I-85, and I-74/73, Greensboro is a gateway to millions of consumers and an ideal site for manufacturing, distribution, and logistics facilities," he says.
Peripheral to one of the United States' fastest growing regions, Greensboro is attracting interest from logistics service providers and businesses alike.
The newest FedEx Express Hub, for example, is nearing completion at Piedmont Triad International Airport in Greensboro. It will provide speed to market and a level of accessibility for area companies unavailable in many U.S. markets.
Greensboro also features one of the largest concentrations of trucking companies on the East Coast, providing an intermodal complement to Norfolk Southern and CSX's extensive footprints in the area.
This saturation of transportation and logistics resources has only raised expectations for businesses locating in the area. Honda Aircraft Company recently sited its global headquarters, certification and testing facility, and manufacturing operation in Greensboro, and O'Reilly Automotive, Mack Trucks, Procter and Gamble, EcoLab, and Tyco Electronics have followed suit.
Lynch expects Greensboro's location will become even more valuable as businesses locate DC facilities closer to ports of entry and in proximity to major consumer pockets.
"The city is a significant manufacturing center in the middle of the East Coast; 66 percent of goods and services sold occur in the eastern U.S. market," he says. "Greensboro is well-positioned geographically and from an infrastructure perspective to provide a competitive advantage to companies rethinking their DC networks.
"O'Reilly Automotive and Lenovo are both excellent examples of companies that have chosen Greensboro as a prime location for distribution operations just since 2007," Lynch reports.
The Buckeye Stops in Toledo
When it comes to a dynamic business location, northwest Ohio is a central point for access and opportunity.
Nearly 100 million people live within a 10-hour drive of the Toledo region, and with easy access to air, rail, seaport facilities, and two of the country's most traveled interstates, the doors to the global market are wide open.
"Toledo is one of the few metro areas in the United States supporting all modes of transportation, from a world seaport to a heavy air cargo hub operation," says Steve Weathers, president and CEO of the Toledo-based Regional Growth Partnership (RGP).
Toledo is the largest general cargo port on the Great Lakes and is home to one of the top five rail centers in the country in terms of handled tonnage. The city also has a major airport and the benefit of being located at the intersection of three cross-country interstate highways.
Located on the western shore of Lake Erie, and in the heart of northwest Ohio, Toledo has a population of roughly 300,000. The city offers businesses and families the attributes of a large cosmopolitan setting while maintaining small town atmosphere and charm.
Northwest Ohio is at the center of an efficient, intermodal transportation network that connects local businesses to world markets.
Toledo Express Airport, which provides daily flights to major midwestern hubs including Chicago, Detroit, Pittsburgh, Cincinnati, and Cleveland, is the 16th busiest cargo airport in the United States—50th worldwide—and second only to Chicago in the Great Lakes region. The airport also operates as BAX Global's international cargo hub.
Northwest Ohio is a significant trucking hub as well. Three major interstate highways serve the region; I-80 (east/west from New York to California); I-90 (east/west from Massachusetts to Washington); and I-75 (north/south from Canada and Michigan to Florida).
Other connecting interstates supply direct links to major cities throughout the United States and Canada.
In addition to its dense road infrastructure, Toledo is the United States' fifth-largest rail hub. Norfolk Southern, CSX, and Canadian National all provide rail service to locations throughout the United States and Canada—which further complements the Port of Toledo's expanding intermodal facilities and capabilities.
The port, located at the mouth of the Maumee River, is the second largest deep-water facility on the Great Lakes/St. Lawrence Seaway System and is one of the closest major U.S. ports to Northern Europe.
"We have abundant acreage for developing airfreight distribution centers at Toledo Express Airport and deep-water sites for heavy industry at the Port of Toledo," Weathers says. There is also space for expanding manufacturing and distribution operations at the intersections of I-80/90 and I-75.
Northwest Ohio provides benefits beyond infrastructure and amenities. "Our region offers a lower cost of doing business, quicker turnaround time due to less traffic congestion, and a highly skilled, trained, and flexible workforce," Weathers says.
The RGP works closely with partners at the local, regional, and state level on business attraction projects. "Incentives include enterprise zone tax abatements on new construction, low-interest financing, employee training grants, new technology funding, and other items," he reports.
By maintaining an 11-county site and building database, the RGP and its partners join with businesses to assist in the site selection process.
"The RGP has an extensive partnership with local real estate professionals, developers, local economic development officials, and the Ohio Department of Development," Weathers adds.
Nebraska's Power Play
Nebraska remains one of the bright spots for enterprising U.S. businesses, largely as a result of public and private commitment to incenting and attracting logistics and distribution opportunities to the state.
As the state's largest electric utility, the Nebraska Public Power District (NPPD) is well-grounded in the power Nebraska wields to attract transportation and logistics investment.
The NPPD was formed in 1970, when several of the state's major power utilities merged into a single entity. The state offers the benefits of a vibrant economy and a workforce that's highly educated, mechanically adept, and cost-efficient, according to Dennis G. Hall, the NPPD's economic development manager.
He also notes that the state's advanced transportation systems give businesses a means of delivering and receiving shipments conveniently and efficiently.
Nebraska's central location along key transportation routes provides speed to all major markets, regardless of direction. Within one day, goods shipped by truck can reach 26 percent of the U.S. population; add a second day and the percentage jumps to 91 percent.
The state is also positioned strategically within the North American Free Trade Agreement (NAFTA) trade corridor, making it an ideal location for companies that handle shipments between Canada and Mexico.
Nebraska works hard to maintain and improve its 483-mile stretch of Interstate 80, which links state residents and businesses to both the East and West Coasts, Hall reports. Seven national highways run north-south across the state, encompassing 22,156 miles of hard-surfaced roads.
Nebraska is part of the nationwide automatic vehicle identification (AVI) system, which allows participating transponder-equipped commercial vehicles to bypass designated weigh station facilities.
This system features technologically advanced plates built into roadways so trucks are weighed and recorded while maintaining their 75-mile-per-hour speed.
Rail also plays an important role in Nebraska's transportation infrastructure. The nation's two largest rail companies—Burlington Northern Santa Fe and Union Pacific—provide rail service to most of the state's communities. In all, 13 freight railroads operate more than 3,600 miles of track throughout Nebraska.
"No major city in the United States is more than five days by rail from Nebraska," Hall adds.
In addition to road and rail networks, Nebraska hosts an extensive air transport support system. Commercial airline service is available in nine Nebraska cities and scheduled airfreight service is provided to five additional communities.
Although Nebraska is land-locked, two major river systems provide access to key port cities. The Missouri River, on Nebraska's eastern border, supplies an inland water link to the Gulf of Mexico and the Atlantic Ocean via the Mississippi River.
The U.S. Army Corps of Engineers maintains a nine-foot-deep, 300-foot- wide channel that runs 735 navigable miles from Sioux City, Iowa, to the mouth of the Missouri River near St. Louis. With no locks or dams, the free-flowing river is navigable approximately eight months of the year.
Nebraska's unique geographic location and extensive logistics underpinnings place the state in a class by itself. "Because there is no other place like Nebraska, there is no competition," Hall says.
All Roads Lead to Hampton Roads
Hampton Roads is strategically located on the mid-Atlantic coast, covering the southeastern corner of Virginia and a small portion of northeast North Carolina.
A pivotal trade hub since colonial times, the area's seaports continue to evolve with the ebbs and flows of global commerce and the region's economic development potential is inherently tied to transportation and logistics.
"Hampton Roads provides a strategic location with outstanding port facilities and transshipment networks," says Keith Norden, senior vice president of the Hampton Roads Economic Development Alliance. "Our 50-foot harbors can handle post-Panamax vessels, and bridges do not restrict access."
The Hampton Roads Economic Development Alliance is a non-profit public-private partnership with the mission of marketing the region worldwide as the choice for business investment and expansion.
The alliance also serves as Hampton Roads' lead organization for recruiting new businesses to the area and helping existing companies expand and prosper.
Southeastern Virginia's strategic location and advanced transportation infrastructure offer shippers reliable access to two-thirds of the U.S. population. More than 75 international shipping lines serve the region, which has one of the most frequent direct sailing schedules of any port in the country.
In fact, southeastern Virginia is home to one of the best natural deep-water harbors on the U.S. East Coast.
"Fifty-foot deep, unobstructed channels provide easy access and maneuvering room for today's largest containerships," says Norden. "Virginia's ports are located just 18 miles from the open sea in a year-round, ice-free harbor."
In terms of modal access, Hampton Road's Port of Virginia transports more intermodal containers to more cities faster and more efficiently than any other port in the United States.
As the largest intermodal facility on the U.S. East Coast, Virginia offers six direct-service trains to 28 major cities daily.
On the road, more than 50 motor carriers offer full freight handling and load-consolidation services, and they are supported by a network of interstate and local highways that facilitate fast, inland transport to any point in the United States.
Beyond its current capabilities, Hampton Roads is moving forward with infrastructure investments to pave the way for even more growth.
As an example, the Virginia Port Authority plans to develop Craney Island in Portsmouth into the fourth state-owned deep-water marine terminal. The terminal will cover 600 acres and be built in three phases starting in 2013, with completion scheduled for 2032. At build-out, Craney Island is expected to have an annual throughput of 2.5 million TEUs.
Hampton Roads is ready to work with businesses looking to take advantage of the area's logistics resources.
"The Hampton Roads Economic Development Alliance has an aggressive marketing outreach program, which takes its staff across the globe," Norden says. "We also work with the local economic development departments of our 15 Hampton Roads localities to identify and assist companies with their expansion and relocation plans."
Additionally, the alliance serves as a facilitator to connect necessary strategic partners with prospective companies during site location searches.
"Local and state incentives are offered to qualified projects and are based on corporate investment, employment numbers, and annual payroll," Norden says.
Thanks to its advanced transportation infrastructure, Hampton Roads has been successful in recruiting several large distribution centers, including Wal-Mart (three million square feet), Target (1.8 million square feet), Cost Plus-World Market (one million square feet) and QVC Home Shoppers Network (one million square feet), among others.