St. Louis: World-Class Multimodal Freight Network
Thanks to its strong global and fast-growing market, the St. Louis region is a leader in freight, setting records and gaining national and global significance.
Unrivaled accessibility. Those two words define the logistics advantage the St. Louis region offers. Factor in an outstanding logistics infrastructure and a ready, willing, and able labor force, and it is little wonder that logistics providers and users are the area's biggest cheerleaders.
Ag Coast of America Activity and Industrial Market Growth Make St. Louis Region One to Watch
Located in America's heartland, a 15-mile section of the Mississippi River in the St. Louis, Missouri, region is rapidly becoming known as the Ag Coast of America for delivering the highest level of grain handling capacity anywhere along the river.
Investments of more than $200 million in the agricultural product barge transfer facilities there since 2005 have helped increase handling capacity and other efficiencies driving growth. St. Louis regional ports have been ranked by the U.S. Army Corps of Engineers (USACE) as the most efficient inland port district for tons moved per river mile. The region's barge industry handles 500,000 tons per mile, making St. Louis two and a half times more efficient than its closest competitors.
Those efficiencies translate into one-third of all freight traffic along the Mississippi River, from Minneapolis to the Ohio River near Cairo, Illinois, being captured by the St. Louis region's ports and river terminals, reinforcing the region's critical role in the national freight network.
The signing of a Memorandum of Understanding (MOU) in March 2018 by the St. Louis Regional Freightway, Plaquemines Port Harbor & Terminal District (located in the State of Louisiana) and four ports in the St. Louis region is expected to generate more barge freight traffic in the St. Louis region.
The Freightway will be collaboratively working with the Port of Plaquemines and America's Central Port, Port Authority of St. Louis, Kaskaskia Regional Port District, and Jefferson County Port Authority to support development of a new transportation link for container transport vessel shipments from Plaquemines to the St. Louis area. In 2017, the Freightway and three of the ports signed another key MOU with the Port of New Orleans.
David Jump, president of American Milling based in Cahokia, Illinois, says the amount of river business in the region disproportionately increased over the past three decades. He attributes this to increased demand for grain transfers across the industry and recognition of the region's transfer facilities as a more cost-effective and efficient means to move products by barge to the Port of New Orleans.
"The St. Louis region is a rail and interstate highway gateway," says Jump. "It's more cost effective to move commodities into, out of, and through St. Louis by combinations of truck, rail, and barge than points upstream on the Mississippi and Illinois Rivers."
St. Louis' ability to capture more than 30 percent of the 109 million tons of freight traffic is also due to exceptional intermodal connectivity via the regional freight rail network, which includes six Class I railroad carriers, critical unit train capacity available at many river terminals and ports, and four interstate highways providing national access. The location in the center of America's agricultural heartland also provides the northernmost ice-free and lock-free access on the Mississippi River to the Gulf of Mexico.
"Barge rates from St. Louis to New Orleans are very competitive," says William Grebenc, General Manager of COFCO GROWMARK. A partnership between global agri-business COFCO International Limited and the robust farmer cooperative network of GROWMARK, COFCO GROWMARK jointly owns a barge, truck, and rail terminal in Cahokia, Illinois.
"The St. Louis harbor is able to load 14-foot hull barges (2,000 to 2,200 short tons per barge) versus the locking rivers loading 1,600 tons per barge," says Grebenc. "This makes barge rates more competitive and loadings more efficient."
The same assets and advantages contributing to the success of the Ag Coast are also driving steady growth in St. Louis' industrial sector. Companies are attracted to special tax abatements and other incentives, and are impressed by the speed at which they can build a new project in the region.
A job-ready workforce and available land and space are also critical amenities. The region is keeping up with the labor demand by proactively working with universities, community colleges, and technical colleges to train workers in the two-state area.
The availability of a strong workforce precipitated the opening of General Motors' one-million-square-foot 3PL facility and expansion of Reckitt Benckiser's operations, both located in St. Charles County, Missouri.
Retail giant Amazon has two fulfillment centers in Edwardsville, Illinois, two smaller facilities in St. Louis County, and announced plans for its first Missouri fulfillment center in St. Peters, Missouri. The company attributes its ability to expand in the region to "incredible customers and an outstanding workforce."
St. Louis-based World Wide Technology signed a lease for two million additional square feet of industrial space in Edwardsville, Illinois. The company has 1,200 employees there, and will add another 500 jobs, increasing its regional workforce to more than 3,200.
Procter & Gamble has a manufacturing plant in St. Louis and a distribution center in Edwardsville, Illinois. Procter & Gamble product supply warehouse leader Herbert Hall oversees three million square feet of space and the movement of several hundred trucks every day. He sees potential for more growth in St. Louis, particularly with continued investment in the region's infrastructure.
"We've purchased land next to our North St. Louis facility for expansion," Hall says. "The labor workforce, freight availability, and cost of living are good, but seeing improvements to key road infrastructure will be a big win for us."
Investing in Multimodal
The Freightway is committed to delivering that win for Hall and other companies that want to grow their operations in eastern Missouri and southwestern Illinois. The role of the Freightway is to optimize the regional freight transportation infrastructure and to advance its position as a world-class freight distribution hub.
"We recognize investment in our multimodal interconnectivity is critical for continued growth," says Executive Director Mary Lamie of the St. Louis Regional Freightway. "A key focus has been uniting local governments, Class I railroads, manufacturing and logistics leaders, port and barge industries, and other stakeholders in regional freight around a list of 20 priority projects necessary to modernize our freight infrastructure."
More than six million square feet of new projects are underway as of early 2018, or breaking ground soon. With two additional industrial parks totaling 925 acres planned in prime industrial corridors on both sides of the Mississippi River, the growth continues.
"Investors are parking tens of millions of dollars at a time in the St. Louis region because it has established itself as a stable, productive market without the highs and lows of Tier 1 markets," says Pat Reilly, Senior Vice President with Jones Lang LaSalle.
Magnet for Manufacturing
One by one, the St. Louis region checks off the contents in a bill of particulars:
- Four major interstate highways allow outbound trucks to reach 70 percent of the U.S. population within 48 hours.
- Six Class I railroads offer access to the third-largest U.S. rail terminal.
- The Port of Metropolitan St. Louis is home to the third-largest inland port.
- Two international cargo airports position the metropolitan area for immense growth.
"With so much potential, we are proud to call St. Louis home," says Brian Pierce, vice president/operations for Sunset Transportation, a St. Louis-based logistics company that specializes in supply chain management, shipper technology, transportation brokerage, and freight auditing and payment services.
"Aside from expansive infrastructure options, St. Louis provides a high quality of life for a low cost of living," he adds. "The area is attractive to businesses—manufacturing in particular—with available, affordable properties for distribution services, one of the lowest corporate tax rates in the country, and highly skilled talent coming from at least 12 local colleges offering logistics or supply chain management degree programs."
Sunset has been around not only to witness the area's growth, but also to contribute to it. "Sunset has been a family-owned business in St. Louis for nearly 30 years," Pierce explains. "We've seen firsthand the growth and logistics evolution of our city.
"We're proud to say we've been growing the same way, focused on hiring capable, passionate people from an extremely talented and fresh pool of candidates," he notes.
"Our innate knowledge of the geographical area has been a comfort to local customers and, above that, our emphasis on shipper technology and optimization has only fostered Sunset's place in local and national logistics circles," Pierce says.
The company works hard to be a gem in the St. Louis logistics marketplace through attention to individual customers' needs. "Sunset isn't a one-size-fits-all 3PL," says Sunset COO Lindsey Graves. "Our founding principles are the basis of what we promise our customers every day: savings, visibility, data-driven solutions, continuous improvement, and relationships above transactions.
"Sunset's diamond in the rough is truly our culture, and the integrity and pride we have for our jobs, our fellow employees, and customers," she adds. "Combine those family-style ethics with advanced shipper technology and visibility tools, and you have Sunset at your service."
Still, the company is not resting on its laurels. This year, Sunset added two new locations to its branch network by acquiring Snowland Freight Services in Wisconsin and Minnesota. The acquisition further strengthens Sunset's role in St. Louis.
"Snowland's expertise in temperature-controlled shipments, and the expansion of our national reach into crucial freight markets has been a welcomed addition to the Sunset family," Graves says.
Moreover, Sunset serves as a prime example of the state-of-the-art approach that logistics providers in St. Louis take to business.
On the technology side, "Sunset's corporate business operations teams have been working diligently to upgrade our business intelligence suite to ensure customers have maximum, up-to-the-minute shipment visibility," Graves explains.
If unrivaled accessibility is key to the logistics strength of St. Louis, so, too, is the saturation of its resources.
"Most of our facilities are located within the St. Louis area, which makes it easy for us to keep a large number of staff on call for our clients," says Mike Dieckhaus, director of sales and business development for FW Logistics. Founded in 1949 with a focus on food-grade storage, over the years FW has expanded its expertise to include contract warehousing, dry storage, and temperature-controlled warehousing.
FW operates warehouse facilities across the nation, including in California and the St. Louis, Kansas City, Indianapolis, and Atlanta metropolitan areas. "With eight of our 15 warehouses located centrally in the United States, it is cost effective for us to ship just about anywhere and get product there fast," Dieckhaus says.
"FW Logistics enhances these assets by accommodating our clients with space, staff, technology, and trucking when they need it most," he adds.
On the Road
In addition to its warehouses, FW offers trucking services with more than 85 company-owned trucks and 250 trailers servicing the continental U.S. The company offers same-day service within 325 miles of St. Louis and next-day service up to 550 miles.
Its breadth notwithstanding, the company maintains its focus on customer service. When you're talking about logistics, you might call that attitude the "spirit of St. Louis."
"We are small enough to be nimble to our clients' needs, yet large enough to handle the volume. Our focus is to treat our clients like family because that's how we would want to be treated," Dieckhaus says. "With 15 locations nationwide, 85 dedicated trucks, and over 8 million square feet of warehouse space, we can accommodate for just about anything."
Advantages of the Midwest
Another component of the logistics spirit of the region is constant attention to what is just ahead, over the horizon. In keeping with that spirit, FW is always looking for the next big thing.
"The biggest trend that we—and everyone else in the United States—is seeing is the uptick in e-commerce demand," Dieckhaus says. "This greatly improves the advantages that FW Logistics offers. We are able to accommodate not only quickly, but also efficiently."
Having its corporate base in the St. Louis area has contributed significantly to the company's status as one of the fastest-growing logistics companies anywhere.
"We believe that our consistent growth is directly related to our location in the Midwest, coupled with our customer service, and the ability to flex," Dieckhaus says. "We always suggest that our clients have product in the Midwest to increase their competitive advantage in their market."
In the Center of it All
The company's St. Louis warehouse is centrally located, close to the city and its outlying areas. This allows the company to service customers in both Illinois and Missouri.
"The advantage of having a warehouse in this Midwest location is that Missouri lies at the center of a vast transportation network, which is directly connected to foreign and local markets," Dieckhaus says. "Missouri has a great history of warehousing and distribution along with low tax rates, gas prices, and energy rates, which is helping to shape the future of the logistics industry with help from FW Logistics.
"Our St. Louis warehouse provides resourceful access to both coasts for easy international delivery," he adds. "Another advantage of having a warehouse in St. Louis is that it enables easy access to eight neighboring states, which helps simplify logistical planning services."
Unrivaled accessibility and saturation of resources. That's the long and the short haul of the St. Louis region's story of logistics excellence.