Great Logistics Sites Shaping the Future

Great Logistics Sites Shaping the Future

From access to ports and infrastructure, readily available workers, and proximity to millions of consumers, logistics sites deliver and build on advantages. Here’s how organizations support their continued success.

As everyone in the business of manufacturing or distributing products knows, the “perfect” site for logistics purposes—whether manufacturing, warehousing, or distribution facilities—depends on the company asking the question. That said, the logistics landscape in the United States is rich with locations featuring assets that are ideally suited for moving products from Point A to Point Z.

Determining which of those points on the map is best for a specific company requires careful analysis and study of the organization’s needs. Here is a good place to begin: “Think about where your customers are.”

That’s one key piece of advice from Donnie F. Williams, Jr., PhD, executive director of the Supply Chain Management Research Center (SCMRC), part of the Sam M. Walton College of Business at the University of Arkansas.

The professor’s advice seems simple and straightforward enough, but some mistakenly may believe customer proximity has become less important in a technological age where everyone is everywhere—virtually, at least.

However, the essentials of what constitutes a great logistics site today are the same as they always have been, Williams says. While technology has changed some of the dynamics of the delivery relationship, the emergence of e-commerce has only increased the need for producers to be as close as possible to their end customers in order to meet demands for accelerated delivery times.

“You want to be as close to your customers as you can be,” he says, whether those customers are manufacturing plants, retail stores, or consumers’ homes.

Core Strengths

In addition to customer proximity, Williams and his colleagues at the SCMRC also emphasize the traditional importance of agility, infrastructure access, supportive government policies and services, and availability of workforce talent in the recipe for logistics site-selection success.

“Many elements determine why supply chain clusters develop in some places and not others,” writes Ronald Gordon, PhD, in a paper for the SCMRC. “Geography, government policy, and education all factor into the equation. But it also helps to have a bit of luck—the sort of luck that brings risk-taking visionaries together in the same place at the same time.”

That happy confluence of spirit and resources occurred in Northwest Arkansas, home of the SCMRC and the university, where visionaries like Tyson Foods’ John W. Tyson, Walmart’s Sam M. Walton, and J.B. and Janelle Hunt, the founders of J.B. Hunt, decided to stake their claims decades ago.

Attracting Talent

Similarly, leading logistics providers, utility executives, commercial real-estate brokers, and site-selection experts have joined forces with forward-thinking government officials and manufacturers to create great logistics sites and services in disparate areas all across the country. Some of those locations easily come to mind, while others are relatively hidden gems in the logistics universe.

What all of these areas have in common, Williams says, is closeness to high-population centers (and the ability to access them quickly), qualified workers and executives, and community leaders who recognize the imperative of making their communities places where outstanding workers and executives desire to be.

“You have to be a place that can attract talent,” Williams says, “a place where talent wants to live.” In seeking their ideal logistics site, he says, companies must ask: “Are we in an area where we have access to talent?”

Such places become “forever homes” to a management and labor pool populated by individuals who will turn down jobs elsewhere in order to stay.

“From an economic development perspective, this is critical,” Williams says, adding that it is likewise vital for the community to create a welcoming environment for businesses through incentives and continual efforts to improve and enhance the region’s logistics infrastructure.

“In the end you can’t move forward without the community agreeing that it wants you there,” he says.

Such sites may not always be “right in the center” of things, Williams says, but they must provide access to high-quality labor at a reasonable cost as well as to road, rail, air, and water assets that facilitate moving products quickly and efficiently to their destinations.

“Anchor companies” are often trailblazers in regions that become logistics clusters through “coopetition”—where several companies serving varied industries cooperate in efforts to increase the region’s strengths, fueling innovation and education that will attract even more talent, thereby contributing to the advantages of the logistics environment.

These are the places that “people don’t want to leave,” Williams says.

“It’s hard to get talent,” he notes, adding that the SCMRC’s long history of collecting data has taught researchers that the “big lesson” of logistics success is that the quality of talent is foremost.

In numerous studies, he says, “without fail” company executives repeatedly state the same attribute as the primary factor in their logistics success: “My people.”

It often has been said that without truck drivers, the nation’s cupboards would be empty. But equally vital is where the drivers’ journeys begin, as well as the people creating the products, loading the trucks, and sending the drivers on their way. The place the trip starts, therefore, is just as essential as where it ends.

Here is a look at some of the country’s great logistics sites and the organizations that support them.

ElectriCities: North Carolina Powerhouse

When it comes to finding solutions to logistics challenges, there is nothing quite like the power of power.

One particularly powerful solutions provider is ElectriCities of North Carolina, a not-for-profit membership organization of municipally owned electric utilities.

ElectriCities is prominent among the reasons North Carolina is an enviable logistics locale. The organization advocates for public power communities at the state and federal levels, and provides a number of administrative, technical, legal, and legislative services to support its members.

“We serve all areas of North Carolina,” explains Brenda Daniels, the organization’s manager of economic development. “We have 51 total power agency members with 32 in the east and 19 in the west.

“We also have associate members in North Carolina as well as South Carolina and Virginia,” she adds, “comprising approximately 90 members in all.”

Daniels echoes the mantra of savvy logistics experts who cite the quality of available talent as a primary factor in the formula necessary for a region to qualify as a logistics superstar. “Each business is different, but they all want the same thing: workforce,” she says. “We always want to make sure companies, whether they are new or expanding, get the workers they need.”

In addition to connecting talent with employers, ElectriCities actively contributes to the process of attracting businesses to the region it serves.

“We continue to work with our cities and towns, county developers, and the Department of Commerce and Economic Development Partnership of North Carolina to recruit business,” Daniels says. “Having the logistics assets in the state is certainly a plus when talking with companies looking at our state.”

Those assets include an interstate road system—including I-95 north to south, and I-40 east to west—that reaches all parts of the United States, as well as the forthcoming Carolina Connector (CCX) linking the CSX Rail Terminal in Rocky Mount, North Carolina, to the entire Midwest.

Rocky Mount is an ideal spot for CSX’s newest intermodal terminal, as the facility will provide regional industries with convenient access to rail, helping connect products to consumers nationwide. Shippers will benefit from Rocky Mount’s strategic location on the CSX mainline and proximity to the Triangle region’s major consumption market.

The Triangle region gets its name from Research Triangle Park (RTP) and three Tier 1 research universities—Duke University, North Carolina State University, and University of North Carolina Chapel Hill—located only minutes apart. Lying in the heart of North Carolina, the Triangle region encompasses several counties that are home to a variety of towns and small cities with a diverse range of available housing.

Meanwhile, RTP is one of the most prominent high-tech research and development centers in the United States. Covering more than 7,000 acres, it is the largest research park in the United States and is home to some 200 companies employing 50,000 workers and 10,000 contractors.

Also helping the region soar as a logistics sweet spot is Raleigh-Durham International Airport, which has direct flights to 38 domestic and international cities on 352 daily flights. Among other approaches, ElectriCities capitalizes on these advantages through services that provided a net value of more than $460 million to its members last year.

NC Ports: Continual Investment

One key ingredient necessary to qualify a region as a great logistics site is its ability to evolve and grow in order to meet ever-changing needs in the logistics marketplace.

In that regard, North Carolina is a standout for the forward-thinking mindset of regional leaders who are unwilling to simply rest on the area’s intrinsic geographical advantages, such as its congestion-free maritime ports under the jurisdiction of the North Carolina State Ports Authority (NC Ports).

“Proximity to infrastructure is key when considering relocation or expansion of business,” says Brian Clark, executive director of NC Ports.

“NC Ports continues to invest in infrastructure projects to ensure they remain congestion-free as they continue with their strong growth,” he adds. “With the highest productivity and best truck turn times in the country, NC Ports continues to support commerce in North Carolina and maintain a viable option for companies needing a customized high-velocity solution across all industry verticals.”

North Carolina’s ports are among the most market-accessible on the U.S. East Coast. Within 1,000 miles of North Carolina’s borders are more than 170 million U.S. and Canadian consumers, more than 65 of the country’s top 100 metropolitan areas, and nearly 60% of total U.S. retail sales.

NC Ports’ close proximity to available industrial real estate as well as 65% of existing and emerging markets, makes the ports organization an ideal partner when selecting an area for location.Cooperation with its partners contributes mightily to the ports’—and the region’s—success.

“What makes NC Ports unique is our ability to develop joint solutions with customers including beneficial cargo owners and logistics providers,” Clark says.

All of this builds on the assets already in place in the state. In addition to its major interstates and rail assets, North Carolina is home to two deep-water ports at Wilmington and Morehead City, making the region an ideal location for companies across several industry verticals. These include automotive, advanced manufacturing, aerospace, furniture, apparel and textile, agriculture (dry, refrigerated, frozen), food processing, plastics/chemicals, and biotech/life sciences.

Proximity to consumers/end users and availability of industrial development sites both near the ports and across the state provide companies with the ability to shorten their build-to-operation timetables.

North Carolina’s infrastructure also allows for effective movement of raw materials to support manufacturing as well as finished products.This is especially important in light of recent strains on the supply chain, as companies seek alternative locations for operations to minimize supply chain variables.

Moreover, NC Ports—an enterprise agency of the North Carolina Department of Transportation—is involved in joint recruitment and business-expansion programs across multiple industry sectors within the state. The organization’s list of business development vertical leads represents more than 150 years of collective logistics experience that assist in analyzing correct asset utilization and identifying cost-effective, optimal supply chain efficiencies while catering to the needs of current and prospective customers.

Georgia Ports Authority: Access to Savannah

Prominent on the long list of assets keeping Georgia on the minds of logistics professionals are the state’s multiple ports represented by the Georgia Ports Authority (GPA). And prominent on the list of the GPA’s ports is the highly advantageous Port of Savannah.

Savannah provides fast access to 45% of U.S. consumers and manufacturers. The port’s location, only six miles from I-16 (East/West) and I-95 (North/South), means key cities and manufacturing points throughout the U.S. Southeast may be reached within a one- to two-day drive. Because the terminal is situated west of Savannah, trucks are not hindered by city traffic.

The state of Georgia features the nation’s third busiest gateway for container trade at the Port of Savannah. Superior interstate access and daily departures by CSX and Norfolk Southern put inland destinations such as Atlanta, Birmingham, Charlotte, Memphis, and Orlando within easy reach.

At 1,367 acres and nearly 10,000 feet of contiguous berth space, the Port of Savannah’s Garden City Terminal is the Western Hemisphere’s largest single-operator container terminal. The size of the facility, along with on-terminal rail and the port’s proximity to Interstates 95 and 16, enables the free flow of cargo beyond the terminal gates.

Additionally, the Port of Savannah sits at the center of the largest concentration of warehouse and distribution center space in the Mid- and South Atlantic. When it comes to room to grow, Savannah has an industrial market of nearly 80 million square feet, with almost 12 million square feet under construction. Beyond that, there is enough land permitted for private development for another 100 million square feet of industrial space within 30 miles of the port.

Savannah’s location as the most westerly major port on the U.S. East Coast, centrally located within the Southeast, means the GPA provides unmatched speed to market, with shorter overland routes to major inland destinations. No other port community in the nation provides more targeted workforce training or more room to grow than Savannah. With multiple universities in the region and the state’s Quick Start program, industries can rely on Georgia for well-trained employees at every level.

With 36 weekly container services, the Port of Savannah offers more global connections than any other port on the U.S. East Coast besides New York-New Jersey.

The Georgia Ports Authority works closely with the state Department of Transportation, which builds off-terminal infrastructure that benefits cargo movement, such as truck routes, roads, bridges, and interstate improvements. GPA agents work with the Georgia Department of Economic Development as well as local authorities to match the needs of distribution center operators with sites around the state.

The GPA also advises logistics operators considering Georgia locations on potential tax incentives linked to job creation.

On the horizon, the GPA looks to ongoing infrastructure expansion projects including deepening of the Savannah Harbor, a project of the U.S. Army Corps of Engineers, which is now more than 90% complete; the Mason Mega Rail project, which will increase Savannah’s annual rail lift capacity to 2 million TEUs this year; Berth 1 improvements at Garden City Terminal, with completion expected in 2023; and eight new ship-to-shore cranes that will bring Garden City Terminal’s total fleet to 38 in 2023.

Two other major projects are in the planning phase: Garden City Terminal West expansion, with groundbreaking set for spring 2022; and Northeast Georgia Inland Port, where earthwork activities are anticipated to begin in early 2022. Completion is expected in mid to late 2024.

Hoosier Energy: Business Hotspot

In Hoosier Country, Hoosier Energy can be an ideal partner in the search for the perfect existing facility or shovel-ready site for logistics-savvy businesses. The region features great locations with access to highways, runways, rail, and ports. Hoosier Energy adds to these assets with its ability to create competitive rates for new and expanding businesses.

“Our rate structures allow us rate flexibility to quickly and efficiently make decisions related to large projects with tight timelines,” explains Harold Gutzwiller, Hoosier Energy’s manager, economic development. “This flexibility includes the development of special contracts for specific projects that meet a company’s corporate carbon goals including providing up to 100% of their energy needs through renewable resources.”

Hoosier Energy is owned by 18 Rural Electric Member Cooperatives (REMCs) serving 59 counties in the region. Territories served by the member/owner REMCs are crisscrossed by five interstates—I-70, I-65, I-64, I-69, and I-74—with direct access to the FedEx hub in Indianapolis and the UPS hub in Louisville. The Hoosier Energy region contains the median center of the U.S. population and also includes access to inland ports.

Additionally, Gutzwiller points out, Indiana has more connecting highways than any other state and has 41 freight railroads, enabling logistics firms to move effortlessly throughout the region and beyond.

Talent availability is a key advantage as well. Nine Indiana truck-driving schools ready the next wave of workers, while the current driver pool supply ably meets the region’s growing demand.

All of this translates into a robust logistics marketplace, Gutzwiller says, and Hoosier Energy is focused on increasing the region’s competitiveness.

“Hoosier Energy works with individual companies to develop custom solutions to meet their current and future electric needs should they be facility or transportation related,” Gutzwiller says.”As electric vehicles become increasingly important, we work with the consumer to identify the most appropriate way for them to meet their transportation goals.”

Economic development efforts are clearly working. Specialty discount store company Five Below will open a 1-million-square-foot distribution center along the I-74 corridor next year. The e-commerce center is expected to employ more than 470 people by 2025.

Already, Indiana ranks fifth in tons of goods shipped outbound by truck. More than 120,000 truck drivers reside within a roughly 100-mile radius of Hoosier Energy’s headquarters in south central Indiana.

“Hoosier Energy works with and supports state, regional, and local economic development organizations in identifying and developing new potential sites near logistics assets,” Gutzwiller says. “Indiana has an abundance of these assets, including federal and state highways, Class 1 and short-line rail lines, ports and air freight infrastructure.”

Gutzwiller reports that Hoosier Energy is going through a major power production transition with the planned retirement of its 1,000 megawatt coal-fired Merom Generating Station in 2023. Closing this facility will dramatically change the cooperative’s energy portfolio and decrease its carbon footprint by an estimated 80%, replacing coal with renewable energy resources, purchased power, and a variety of natural gas generation.

CenterPoint Properties: Chicagoland Gem

Generating excitement among logistics professionals in the Chicagoland region is the 6,400-acre master-planned CenterPoint Intermodal Center (CIC) in Joliet and Elwood, Illinois, some 40 miles southwest of Chicago.

Opened for business in August 2010, the CIC is a project of CenterPoint Properties, which acquires, develops, and manages 64 million square feet of strategically located industrial real estate in America’s top port markets. In addition to Chicago, where the company has its headquarters, CenterPoint operates in New York/Northern New Jersey, Savannah/Charleston, South Florida, Houston, Los Angeles, Oakland, and Seattle.

Anchored by the 835-acre Union Pacific Joliet Intermodal Terminal and the 770-acre BNSF Logistics Park Chicago, the CIC is at the crossroads of east-west I-80 and north-south I-55 with intermodal rail services to and from every major U.S. West Coast port, as well as Houston. The intermodal interline services of Norfolk Southern and CSX link the center for unfettered rail access to the entire nation.

“As we saw with the pandemic and related recession, macro global events tend to drive more shippers and third-party logistics providers to look at enhanced supply chain efficiencies and savings as they aim to reduce their total landed costs,” explains Brian McKiernan, CenterPoint Properties’ senior vice president of development, who is leading the leasing efforts of newly constructed facilities at the CIC.

“As companies become more cost-focused, we’ll see even more tenants seeking to benefit from a lower total landed cost,” McKiernan says, citingrail’s economic benefits, such as allowing shippers to move goods 24/7, and the environmental benefits of taking trucks off roads. According to the Association of American Railroads, locating warehousing in intermodal hubs like the CIC offers users even more significant benefits, including slashing drayage costs by an average of 25%.

“The regional and national interstate access is a big draw for tenants at CIC- Joliet,” McKiernan says. “The center’s strategic location also gives tenants access to the area’s more than 8 million people, another critical feature our logistics, e-commerce, and retail tenants need. Beyond that, the rail service is the bread and butter of our development.

“Global demand is mounting to move products more quickly,” he adds. “Choosing the right location can result in immense transportation savings and a more efficient supply chain operation.”

The CIC has more than three-dozen tenants. Its two intermodal terminals complete some three million TEU movements per year.

“Over the past few years, we already were seeing an increase in demand for logistics hub infrastructure,” McKiernan says, adding that the pandemic and recent economic concerns are fueling even more demand.

Testimony to the CIC’s prominence among the nation’s great logistics sites is the fact that as many as 20,000 trucks pass through the center daily.

In March 2021, CenterPoint and United Bridge Partners embarked on a major public-private project to upgrade the infrastructure around the CIC. The centerpiece of the private portion of the Houbolt Road Extension project is a 1.5-mile-long highway extension—including a 0.4-mile-long bridge—which will serve as the third entrance into the CIC.

The publicly funded portion of the project will consist of a $32-million investment by the State of Illinois and the City of Joliet to construct a new diverging diamond interchange at I-80 and Houbolt Road and reconstruct Houbolt Road from I-80 to U.S. Route 6.

Duke Realty: Westward Ho

Accelerated e-commerce growth and expanded restock inventory requirements have been driving companies’ needs for more modern warehouse and distribution space. Developers are having to consider several factors when starting new projects. Tenants want warehouses in communities with a robust labor pool and proximity to population centers and ports, all while maintaining reasonable project costs.

“Finding quality labor for warehouse workers and more highly skilled robotics and heavy equipment operators is a challenge right now in Southern California,” says Chris Burns, executive vice president, Central and Western regions, for Duke Realty, a leading owner, developer, and manager of real estate in 19 markets throughout the United States.

Like the other regions Duke Realty serves, Southern California has all the advantages of location. “Southern California’s geography is uniquely positioned as the gateway to Asia, where products are made inexpensively and shipped to the United States for consumption,” Burns says.

Still, the company is constantly on the search for the region’s next big thing. “We are always looking for existing buildings, trailer yards, and development sites that are well located and can meet the needs of today’s users,” Burns says, adding that Duke Realty has more than 17 million square feet in its Southern California portfolio.

Duke Realty’s portfolio has grown more than 70% largely through development. “We currently have 11 buildings under construction in Southern California that range in size from 40,000 square feet to more than 1.2 million square feet located between five and 50 miles from the ports of Los Angeles and Long Beach,” he points out.

About 15 miles east of downtown Los Angeles in Irwindale, Duke Realty is developing its first Smart Building, a 528,000-square-foot speculative project to be delivered in 2022.

“This is a first-of-its-kind project for Duke Realty,” Burns confirms. “We are integrating a number of technologies such as improved air filtration systems, integrated solar panels, and battery storage to supplement tenants’ energy needs and increase sustainability reporting.”

In addition to labor and location, transportation access, infrastructure, and costs are essential elements in the definition of a great logistics site. “We are actively expanding our footprint in highly desirable locations that our clients are targeting,” Burns says.

He further explains that transportation and labor continue to be primary cost drivers, “so we are focused on locations that can best optimize these for our clients.”

According to Burns, Duke Realty plans for its developments and anticipates client needs. “We buy materials in advance, if possible, to mitigate supply shortages,” he says. “We are always looking for quality land opportunities that we can put into development in a timely manner so we have product ready when clients are in need.”

Because California’s strong manufacturing and agricultural industries require the ability to efficiently export goods, and the nation’s recent increase in online retail activity requires efficiency in importing, the company looks for development opportunities where infrastructure is optimal—locations that provide access to airports, roads, highways, and rail/intermodal assets such as BNSF Railway and Union Pacific.

To ensure the economic and environmental impacts are considered and the needs of tenants, cities, and communities are examined, Duke Realty works collaboratively with regional and local resources, including government and service providers.

“It has always been important to establish and foster positive relationships with the leaders in the municipalities where we own assets,” Burns says. “Given the strength of the industrial sector and volume of new projects under development, it’s more important than ever to work collaboratively to gain a better understanding of what’s important to the local stakeholders and community.”

Today’s competitive market requires that developers keep tenants’ needs for strategically located space in mind. Companies want readily available workers, easy access to ports, major thoroughfares and airports, and proximity to millions of consumers. The challenge for developers right now is keeping development costs down, but planning can help contain those costs.

When all is said and done, the logistics sites that qualify as truly great are the locations that make the most of the resources they have today, and constantly build on those assets—economically and efficiently—in order to best serve the needs of tomorrow.

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