How to Build a Supply Chain Based on Speed to the Midwest
While companies look to technology for a competitive advantage in their supply chains, geography is an often-overlooked factor. A supply chain built on speed to the Midwest can boost efficiency and lower operating costs across a variety of industry sectors.
Midwest logistics hubs are typically within a day's drive of more than half the U.S. population and one-third of Canadian residents, as well as about half the U.S. manufacturing capacity. Perhaps as important as proximity is the relatively uncongested highways and airports in the Midwest compared to traditional coastal hubs.
These two factors help create a supply chain based on speed to the Midwest. With the implementation of electronic logging devices for long-haul truck drivers, proximity to distribution centers and customers is vital as well. With the ELD mandate, what were once one-day deliveries have turned into two-day runs. Using a distribution hub closer to your network will reduce transit times.
Midwest logistics hubs can include airfreight, intermodal, and truck deliveries. Even better, a few Midwest airports offer freight-only services that allow shipments to bypass mixed-used airports dealing with record levels of passenger traffic. Also, a robust Foreign Trade Zone program can help shippers, from fast fashion to retail to e-commerce, reduce their customs expenses and speed up processing.
For example, shippers have found that air cargo routed through Rickenbacker International Airport, part of the Columbus Regional Airport Authority, can be offloaded and trucked to Chicago faster than the freight can be offloaded and tendered for pickup at Chicago O'Hare.
An ocean shipper moved its logistics hub to the Midwest from the Port of New York/New Jersey because it could land containers at the Virginia International Terminal and transfer them via rail to the Midwest within 28 hours, compared to a seven to 10-day move from the East Coast.
By bypassing congested urban terminals and moving logistics closer to the customer base, shippers can take days out of their supply chain and reduce landed costs. A supply chain built on speed to the Midwest can create a market differentiator in any business.
3 Questions to Ask When Selecting a Midwest Logistics Hub
- 1. Proximity to supply chain and customer base? Reducing travel time and using highly efficient ports can take days out of your supply chain, increasing efficiency and reducing costs at each step.
- 2. A freight-only hub? Look for a logistics hub dedicated to serving multiple freight modes. At major passenger airports, freight has a lower priority, and space can be at a premium. A hub focused on freight understands the need for efficiency and has the infrastructure to support it.
- 3. A vision for growth? Look for a logistics hub that's responding to the changing nature of logistics, driven by the e-commerce revolution. Many companies are shifting to smaller, more frequent moves compared to traditional pallet and trailer loads. A thriving hub will be investing in infrastructure to support the realities of today's demanding supply chain.