Supply Chain Priorities
When it comes to choosing a new location for your next distribution center, creating a strategic distribution network plan is a first priority to address today’s logistics challenges.
The world economy is uncertain, fuel costs have been riding the same roller coaster as the stock markets, and customers, when they are buying, are demanding shorter delivery times and reduced inventories. In the United States, approximately 60% of all energy consumption is used for transportation, according to Tompkins Associates, a leading provider of supply chain consulting. Although these expenses tend to be buried in the overall cost of transportation, any significant shift in the price of energy has an impact on the costs of transportation and, in turn, on distribution. Therefore, to minimize total distribution cost, it is important to find the best balance of these costs by prioritizing what’s most important in your supply chain.
“The best approach to pinpoint your supply chain priorities is to start with a comprehensive assessment of your supply chain to find out exactly where you are,” says John Spain, senior partner at Tompkins. “Then, by benchmarking your supply chain against others, you can find the gaps in performance and identify areas that need improvement.”
This is the first step to creating a strategic distribution network plan. According to a Tompkins report entitled “Designing a Distribution Network to Address Today’s Challenges,” the objective of strategic distribution network planning is to determine a plan that indicates the most economical way to ship and receive products while maintaining or increasing customer service requirements, or simply put, to maximize profits and optimize service. Strategic distribution network planning typically answers the following:
1. How many distribution centers should exist?
2. Where should the distribution centers be located?
3. How much inventory should be stocked at each distribution center?
4. What customers should be serviced by each distribution center?
5. How should the customers order from the distribution center?
6. How should the distribution centers order from vendors?
7. How frequently should shipments be made to each customer?
8. What should the service levels be?
9. What transportation methods should be utilized?
Planning a distribution network is a sequential process that continually needs updating. Some companies run into the pitfall of performing steps three through six before collecting and understanding the most important steps, which are numbers one and two.
The answer to distribution network planning is only as good as the data put into the analysis. One of the key data requirements in analyzing a distribution network is that of the delivery requirements (time order placement to receipt of the shipment). In general, is it more important to have the goods faster or at a lower price? This will determine how close your distribution center must be to the client. If a lower price is more important to the client, then perhaps it’s more important to have the distribution center in an area that is less urban, closer to a major rail line or in a state that’s a non-union state, as opposed to being right near the client.
Given that question number two, “Where should the distribution center be located?” is considered to be one of the most important questions according to Tompkins, the selection of a site for your distribution center takes time and community due diligence. The best way to narrow your selection to a few regions or communities is to create a checklist of your key requirements. Some potential considerations, according to Tompkins, include:
- Workforce Labor unions, availability of qualified personnel, wage levels, accident rates in area, community education or training programs, employment laws, right-to-work laws, local safety and health costs, and the availability of management personnel
- Utilities History of outages, rates, off-peak rates, discounts or penalties, residential rates, water condition and chemical analysis, water sources, refuse and trash collection costs, pick-up frequency, and disposal methods
- Community Availability of shopping, housing markets and costs, travel and meeting facilities, news media availability, traffic levels, organizations, communications, mail service, health facilities, protective services (fire and police), education, recreation, religious activities, and cultural facilities
- Existing Industry Major operations in area, possible suppliers and customers, civic participation, union affiliations, environmental conditions, support to the community, and number of plants gained and lost in the last five years
- Local and State Voting record of incumbents, annual budget, sources of revenue, annexation policies, attitude during strikes, property taxes, sales tax, financial health of state and community, amount of tax free property, and any community taxes
- Miscellaneous Weather conditions (temperature, rainfall, snowfall, humidity, days of sunshine), planning and zoning history and makeup, and commercial services in area (banks, industrial distributors, office supplies, industrial repair shops)
- Rail Access Railroad stop-off privileges for partial loading/unloading en route, demurrage charges, reciprocal switching arrangements, pick-up and delivery services, and freight schedules
- Highway and Truck State laws as to truck size and weight, toll roads and bridges, and condition of roads
- Other Transport Air: site near airport, schedule of airlines, personnel transport schedules; Water: channels width and depth, terminal facilities, seasonal limitations;
- Other: bus service, taxi service, rapid transit, and auto rental agencies.
According to Tompkins, if a community doesn’t meet these requirements, then it should be eliminated from further consideration. Once the community list is narrowed down, site visits to view alternative lease facilities, land, or buildings for sale should be made. Before you visit each site, create another checklist. This checklist should cover considerations such as zoning, topography, landscaping requirements, access to site, storm drainage, floor loadings, lighting levels, clear height, and utilities. These considerations should be prioritized and then each site should be graded based on how well it meets the criteria. Many of the items on the list may require extensive investigation before a final evaluation can be made.
Now that you know what to evaluate, here are some of the communities vying to be on your shortlist.
Mississippi: The Right Location for Success
Selecting the right location is a key component of any business’ strategic model. In fact, it can make or break a company’s outlook. Companies have to look for the right blend of resources, workforce, quality of life and business climate. A Mississippi location offers these advantages plus easy access to the top regional, national and international markets.
BMW understands the significance of the right location. “There are more than one million BMWs on the road now, and whenever possible, we are committed to providing next-day parts delivery to BMW retailers,” said Hans Duenzl, vice president of service, parts and engineering for BMW, when the company announced the location of its Senatobia regional parts distribution center. That goal is possible because of Mississippi’s central location to major markets in North America.
Mississippi has attracted approximately 2,300 warehouse and distribution facilities to the state, employing more than 29,000 workers. Recently, Creative Logistics and Warehousing announced 133 new jobs and a $2.15-million investment, and Exel, Inc. announced an $11-million expansion. Both companies are located in north Mississippi, along with FedEx Ground, Williams-Sonoma, Future Electronics and many more.
Central Mississippi also is attracting major distribution concerns. Belk, Inc. invested $20 million in a 174,000-square-foot distribution facility in Jackson that will serve 110 Belk department stores. Tim Belk, company chairman and CEO, says, “We expect that our new distribution center in Jackson….will meet our current distribution needs and accommodate our growth over the next five years.”
Mississippi is in the heart of one of the fastest growing regions in the nation, which offers warehouse and distribution facilities easy access to much of their market. The state offers distributors a number of location options, including an abundance of land available in industrial and technology parks throughout the state, as well as locations in close proximity to major airports, particularly in the Jackson and Memphis metropolitan areas. With Toyota, Nissan, PACCAR and other automotive manufacturers and suppliers flocking to the South, Mississippi has some major strategic advantages for that industry sector as well. Memphis, home to FedEx and a hub for UPS, is just north of the Mississippi/Tennessee state line. The state’s location, which is central to both U.S. coasts, is within a day’s drive of more than 50% of the U.S. business population. The state’s transportation systems—railways, roadways, airports and waterways—are fully integrated to maximize transport options. Today, 758.6 miles of new four-lane highways are in use by the public. Additionally, Mississippi highways were ranked as the fourth best in the entire country in a national transportation study. Mississippi also is home to 75 airports, and 17 rail systems serve the state with more than 2,800 miles of track. Mississippi’s 15 ports include two deep water ports on the Gulf Coast that provide access to worldwide commerce.
These advantages create significant cost reduction and improved operational control for automotive companies and other manufacturers seeking warehouse and distribution solutions. With a skilled workforce, flexible incentives and on-time, under-budget project management, Mississippi is the right location.
Baton Rouge, LA: Outpacing the Nation in Transportation Employment
Transportation and warehousing employment activity in the Baton Rouge, LA region far outpaces the trend in the nation as a whole. In the U.S., the logistics industry accounts for just 3% of total employment, while in the Baton Rouge region it accounts for 7% of regional jobs.
Perhaps that’s why Kellogg’s North America Company recently signed a lease to move into the Sealy-Ashland Distribution Center in Gonzales, LA. Kellogg’s has chosen to lease 75,000 square feet of space and is consolidating its local warehouse space. The Baton Rouge Area Chamber, in partnership with the Ascension Economic Development Council (AEDC), worked diligently to locate Kellogg’s new Southern Regional Distribution Center, which will be used to distribute cereal, cookies and snacks to retail stores in Louisiana, Mississippi, and Alabama. The center will create approximately 30 jobs and the company is investing $500,000.
The logistics industry comprises 9% of the total number of establishments, representing over 140 companies and approximately 20,020 jobs. Water transportation, pipeline transportation, and support activities for transportation are particularly robust in the Baton Rouge region. This specialized capability stems from pipeline transportation of refined products, support activities for rail transportation, marine cargo handling, and navigational services to shipping.
More than 50 freight carriers service the area including SAIA Motor Freight Line, Roadway Express, Red Ball, Consolidated, Jones Truck Lines, and Yellow Freight Lines. Current employers in the warehouse and distribution industry rated the following positions as having “satisfactory to good availability:” forklift operators, machine operators, administrative assistants, accountants, and office and accounting clerks. There are two truck-driving schools located in Baton Rouge—the Diesel Driving Academy and Coastal College Truck Driving School. The Coastal College Truck Driving School also has a second location just across the regional border. There are six technical schools in the region, offering training in the following disciplines: diesel-powered equipment technology, electromechanical technology, industrial instrumentation technology, industrial maintenance technology, machine tool technology, ship-fitter fabrication, welding, and outdoor power equipment technology.
Important trends in the logistics industry are higher customer expectations and the subsequent growth in demand for more services. The Baton Rouge MSA’s logistics workforce has a high level of computing and technology skills, allowing it to respond effectively to new and expanding applications and devices found in daily logistics operations.
Joplin, MO: Logistics Advantage Near the Nation’s Largest Retailer
With Wal-Mart’s headquarters in nearby Bentonville, AK (just 45 miles away), Joplin is well positioned geographically to serve as a distribution center for suppliers who have a directive to provide just-in-time deliveries. Joplin is located within two hours of six of Wal-Mart centers, which gives the region a logistics advantage for supplying the Wal-Mart system, the largest retailer in the United States.
Joplin has an excellent location for distribution based on the population within 150 and 250 miles. A market of 5.2 million people can be reached within a 150-mile radius of the Joplin area. Among its competitors within that radius, Joplin’s population is the largest. The population in the local market has as much of an influence on distribution costs as the overall population within the distribution radius, as it is far cheaper to distribute to local customers than to customers that are at least two hours from the distribution center.
The Joplin Metro area’s position for serving national markets is nearly as advantageous as Chicago or Kansas City. Interstates 40 and 44 (east-west) and US Highway 71 (north-south) connect to every region in the country. Four airports within 110 miles serve the region, providing commercial and cargo service to markets throughout the world. Two Class 1 and one local railroad are important parts of the transportation system. Both UPS and FedEx offer daily early morning deliveries in Joplin and Neosho through their regional hub in Springfield, MO.
There is an available workforce of 93,668 in the Joplin labor pool. Of those workers, more than half have at least some college education, while 94% have at least a high school diploma.
The Joplin area already has several back office operations that have prepared a large pool of full- and part-time workers in this industry. Companies such as La-Z-Boy, General Mills and Owens-Corning transport their finished products from the area. In addition, there are numerous large freight companies located in the area that provide logistics services.
City of Hesperia, CA: New Rail Spurs New Opportunities in Logistics
The business-friendly City of Hesperia in California’s Inland Empire North is a leader in supporting the long-term development of the regional economy. Having secured $2 million in federal grant funding from the Department of Commerce Economic Development Agency, the city is ready to build the G Avenue Industrial Rail Lead Track Project, consisting of approximately one mile of new railroad lead track and a parallel runaround track. Construction is slated to begin in January 2010 and take approximately one year to complete.
Hesperia’s proactive Economic Development Department, and its Redevelopment Agency (RDA), the wealthiest municipal RDA in the High Desert, are two powerhouses fueling Hesperia’s current growth. The addition of the rail track, one of the city’s far-reaching industrial development goals, will facilitate operations for a greater number of warehousing and distribution centers near Interstate 15. The new track will offer many opportunities for industrial users to purchase rail-accessible properties.
The thriving City of Hesperia exemplifies smart growth, maintaining a healthy balance between population and development. The rail project is guided by Hesperia’s efforts to create sustainable development that includes locally created partnerships and focuses on regional solutions for economic development. It is tied closely to Hesperia’s strong commitment to grow its economy, attract new businesses and development, and provide jobs for its residents.
The completion of this project will stimulate the development of 210 acres, and will indirectly impact the attraction and expansion of other businesses into the 1,300-acre I Avenue Industrial area. In addition, the project fosters entrepreneurship by making rail accessible throughout the region to smaller businesses without rail access to ship and receive goods with the use of a team trans-load facility. The city has found it is in its best interest to collaborate with local businesses to make sure they continue to be viable and successful entities.
The planned track is expected to bring economic results that will match or exceed the advantages of the neighboring, soon-to-be build-out, Foxborough rail industrial park, which has helped create many long-term jobs by attracting national and international companies.
Strategically positioned for logistics and distribution, the fast-growing City of Hesperia is conveniently situated within easy access to the logistics network that serves the combined ports of Los Angeles and Long Beach (LA/LGB), the nation’s largest international cargo trade area. Hesperia is sited on Interstate Highway 15, and Highway 395, a major corridor linking Southern California with Northern California, Nevada, Oregon, and Washington to the Canadian border. The rail project will make Hesperia one of the few viable locations in Southern California able to provide new rail accessibility.
Some of the most important distribution centers in the world are regional facilities in inland Southern California markets; many, like Hesperia, in San Bernardino County. Completion of the rail spur project will provide a strong incentive for businesses that recognize Hesperia as a prime place to relocate or expand, but that otherwise could not afford a dedicated rail spur for their private use.
Hesperia’s Economic Development Department also maintains an aggressive program to attract a diversity of businesses to the city, offering many services to site selectors, business owners and entrepreneurs who are looking for the right place to expand or locate. The second largest city in the High Desert, Hesperia encompasses nearly 75 square miles of space, offering an abundance of land at a fraction of Los Angeles’ costs, a healthy and pleasant desert climate, and clean air quality, free from the congestion of Los Angeles and Orange County.
Luxembourg: Putting Europe at Your Fingertips
Luxembourg, located at the crossroads of Europe’s main consumer markets, provides U.S. companies with many strategic advantages for conducting successful business in Europe. The country has an open, export-driven economy based on sound fundamentals that allow the government to pursue a growth-oriented and business-friendly tax policy. The availability of a highly skilled, multilingual workforce, easy access to decision makers, and efficient communication and transportation infrastructure reinforces Luxembourg’s position as a competitive European hub for the export of goods and services.
Luxembourg is fully integrated into the European Union (EU) common market, yet offers commercial neutrality. It is the ideal gateway to the European market and its 500 million consumers. As much as 79% of the EU’s GDP lies within a 500-mile radius—a day’s truck ride.
During the past 10 years, Luxembourg has continuously improved its ability to capitalize on those opportunities by establishing itself as the European leader for contract, air freight-based, and value-added logistics.
Luxembourg is a location where companies can provide value-added services, including pre-positioning, assembly, market specific packaging, kitting, quality control and certification, documentation management, labeling, and invoicing. Cargolux, China Airlines, DHL, Kuehne & Nagel, Nippon Express, Panalpina, and Schenker have chosen Luxembourg as an operating base for value-added logistic activities.
The Ministry of Economy and Trade has developed and owns logistics parks in the immediate vicinity of Luxembourg Airport (Eurohub Centre) and major railways and highway corridors (Eurohub South). Value-added activities include third-party logistics (warehousing, packaging, processing and shipping operations), fourth-party logistics (organization of production and distribution flows, supply chain management, invoicing services), and reverse logistics (handling of overstocks, recovery, recycling and reselling of non-sold products).
Troy, OH: An Automotive Hub
The automotive sector in Troy, OH, continues to grow. Troy has become the East Coast consolidation center for Honda’s parts distribution. Honda’s expansion created nearly one million square feet of warehousing, repackaging and procurement operations. “[Our] success has been driven by the very unique public-private initiative that combines the efforts of the Troy Development Council (TDC) with those of the city of Troy,” notes Charles Cochran, TDC president.
During the past four years, Troy has added nearly 2 million square feet of manufacturing space. New companies in Troy include Precision Aero, Clopay, Komyo, F-Tech Research & Development, U.S. Kushin, Prex and Novacel. Companies with recent expansions include Goodrich Aerospace, American Honda, Faurecia, F&P America, Hobart Brothers and Freudenburg-NOK.
To fill its new jobs, the TDC’s workforce development committee partnered with area educational leaders to create an advanced manufacturing training program specifically designed to support immediate needs of the manufacturing sector. Identified as “Skill-Trac,” the program already has more than 120 students enrolled in courses at Edison Community College, Sinclair Community College, and Wright State University.
Barstow, CA: Located at the Crossroads of Opportunity
The most exciting project for the City of Barstow, CA with regard to job creation is the 1,200-acre Barstow Industrial Park. IDS Real Estate, the developer for the soon-to-be rail-served Barstow Industrial Park, will offer large parcels of land within three miles of Interstate 15 and within five miles of Interstate 40.
IDS has completed negotiations and signed contracts with the BNSF Railroad for a rail spur extension into the Barstow Industrial Park. IDS also is moving quickly to complete the Environmental Impact Report and to obtain all entitlements for the 1,200-acre project. IDS expects the Barstow Industrial Park to be ready for development in 2010, and estimates that it will construct 16.5 million square feet of new industrial buildings over the next decade.
The Barstow Industrial Park is located within the Barstow Enterprise Zone, which the state of California awarded to the region in 2006. The Barstow Enterprise Zone provides special incentives designed to encourage business investment and promote the creation of new jobs through tax incentives for businesses that locate in the zone. In addition, IDS is working on an application for a Foreign Trade Zone. The city offers Recycling Market Development Zone incentives for those industries that use certain recycled materials in their manufacturing processes.
With its strategic access to major highways, airports, railways and deep-water ports, the City of Barstow, and especially the Barstow Industrial Park, offers ideal sites for manufacturing, warehousing and distribution activities.
With these advantages, the Barstow Industrial Park was selected by the world’s largest retailer to be the home for one of its perishable food distribution centers. Wal-Mart recently announced its plans to build and operate a food distribution center in the Barstow Industrial Park. The Environmental Impact Report was certified by the Barstow City Council in July 2008 and construction of the 900,000-square-foot Wal-Mart distribution center is expected to begin in early 2009.
Moreno Valley, CA: One of America’s Fastest Growing Cities
Ideally situated at the junction of State Route 60 and I-215, Moreno Valley is one of the Inland Empire’s best locations for a new business or development. As one of America’s fastest growing cities, Moreno Valley is the fourth largest city in the Inland Empire and continues to be a leader with a wide array of business or development opportunities.
The city is strategically located in the marketplace with excellent access to logistics hubs for air, land and sea transportation. Ontario International Airport can be reached in 30 minutes, fulfilling both cargo and passenger service needs. An inter-modal rail facility is just 18 miles away and the ports of Long Beach and Los Angeles are in close proximity. The transportation network also includes easy access to major highway corridors connecting California to the rest of the West.
Moreno Valley anchors the “I-215 Corridor” that stretches from State Route 60 to Interstate 15. Office and industrial developments in cities along this corridor are destined for success as international trade expands, industrial space in the coastal counties grows scarce, and our well-educated workforce becomes ever more eager to work close to home.
A variety of nationally recognized development firms currently have 22 million square feet of state-of-the-art office and industrial projects under development, many with campus-like amenities. For example:
- Ridge Property Trust-Centerpointe is a nine-building development on 125 acres with available building sizes ranging from 80,000 square feet to 780,000 square feet
- First Industrial Realty Trust is developing six buildings with sizes ranging from 191,000 square feet to 1.5 million square feet
- Prologis has 2.3 million square feet in five buildings proposed along State Route 60
- Skechers and Highland Fairview Properties have a planned 1.6 million square feet development for an upscale business park.
Moreno Valley’s expanding medical office market stems from successful RCC/Moreno Valley Community College’s Allied Health sciences programs, the city’s two major hospitals, and nearby University of California, Riverside’s School of Medicine, scheduled to open in 2012.
With a growing population of nearly 200,000 and an eager workforce, the city’s can-do attitude has inspired a number of Fortune 500 companies to choose Moreno Valley for business facilities. Harmon Karden, Lowes, Minka Lighting, MVP RV, Philips Electronics, ResMed, Ross Dress For Less, Serta Mattress, Supreme Industries, U.S Postal Service, United Natural Foods, and Walgreens have selected Moreno Valley as a place to do business.
Moreno Valley offers a municipal electrical utility that is easy to work with, and several sites designated as a Foreign Trade Zone. Additionally, the city of Moreno Valley partners with Riverside County’s Workforce Development Center to provide employee recruitment and training services and incentives that save time and money.
Moreno Valley boasts a lifestyle that includes a full range of outdoor and recreational amenities, as residents enjoy a variety of quality places to dine, shop, play and relax in lifestyle and neighborhood centers.
A Moreno Valley address also provides residents and businesses access to public and private universities and colleges; additionally, there is convenient access to world-class healthcare facilities, and has a variety of quality housing options in a wide array of product types and pricing.
Laurens County, SC: A Ready Workforce in a Great Location
Laurens County is located mid-way between the metropolitan areas of Greenville-Spartanburg and the state capital of Columbia. It is bisected by two Interstate systems (I-385 and I-26), which make the county easily accessible to I-85 and the Port of Charleston. I-85 is less than 30 minutes away giving the county excellent north-south accessibility, and the Port of Charleston is approximately two hours away.
The current unemployment in the county is 7.5%, which is slightly above the state average of 7.3%. Distribution accounts for 18.5% of the employment in Laurens County. The county is home to nine distribution companies with the largest being Wal-Mart. The availability of labor has improved for prospective companies, as Timken recently closed its Clinton operations resulting in an additional 1,000 people that are available and the closing of Sofa Express and BBA Non Woven in December 2007.
The county’s economic designation, attractive wage rates and a county council that is very pro-business make the cost of operation very attractive. On a $5 million investment, the county can reduce the assessment ratio by more than 40% for a period of 20 years. In addition, the county also has the ability to offer a Special Source Revenue Credit that further reduces taxes for a period of 10 years. In addition to these incentives the county’s average wage is below the state average, resulting in an even lower cost of operation. The State of South Carolina also offers one of the nation’s best training programs. The program has recently undergone a name change and is now ReadySC.
Four industrial parks are located along the two interstate systems in Laurens County. Woodfield Industrial Park and Owings Industrial Park are located along I-385 near the Greenville/Laurens County line. Woodfield Industrial Park has approximately 130 acres remaining and Owings Industrial Park has 316 acres. Owings Park has rail service provided by RailAmerica. Hunter Industrial Park is located on I-385 and US 221 and has almost 400 acres available and much of it is rail served by CSX. ClintonPark Corporate Center has two phases that are available for industrial development. Phase two is located on I-26 and has 200 acres available while phase three is just more than one mile from I-26 and has 140 acres available. Phase three has access to rail, which is served by CSX. All utilities are either in or border the parks. In addition to the industrial parks, the county has numerous stand-alone sites, many which also are rail served. The county also has two mega-sites: one 973 acres and the other 1,387 acres. The smaller site is on I-26 and the larger on I-385. Both have access to rail if needed.
The county has one 31,600- square-foot spec building available for immediate occupancy in Woodfield Industrial Park. In addition, the Sofa Express building is 95,000 square feett with 44-foot ceiling heights, and the former Timken building is 525,000 square feet and located on 165 acres with potential rail service.
Laurens County offers a rural living environment with the metropolitan life style only minutes away. Lake Greenwood, which borders Laurens and Greenwood Counties, offers water sports, fishing and lakefront properties. Presbyterian College in Clinton offers college sports and theater opportunities. Musgrove Mill Golf Club, designed by Arnold Palmer, offers one of the most challenging courses in the state. Laurens County’s location offers a near perfect climate with no rainy or dry season. Greenville’s Bi-Lo Center and Peace Center offers a variety of entertainment opportunities and is only a short drive away.
Why locate in Laurens County? It offers an excellent location with easy accessibility, a good available workforce, low cost of operation and a great rural community in which to raise a family.
Illinois Valley: Con-way’s New Freight Facility Puts LaSalle on the Map
Con-way Freight, a 25-year-old company operating in 460 locations throughout the continental United States, Canada, Hawaii, Alaska, Puerto Rico and Mexico, started operations in late November 2008 in its new facility in Cannon Industrial Park, just east of the I-80/I-39 interchange in LaSalle, IL.
Con-way is the second largest LTL in the U.S. and is publicly traded on the New York Stock Exchange. According to its Web site, Con-way is time-definite and day-definite freight transportation for commercial, industrial, retail, wholesale and manufacturing companies throughout North America.
“LaSalle will serve as a strategic re-ship center for shipments moving to and from hundreds of other cities,” says Gary Frantz, spokesman for Con-way Freight, from its headquarters in San Mateo, CA.
The new facility is part of Con-way’s plan to improve service and reduce costs, which includes reducing miles driven nationwide by 5.2%, conserving a projected 4.9 million gallons of fuel annually. At an average cost of $3 per gallon, the estimated annual savings would be more than $14 million on fuel alone.
The new $20-million LaSalle facility, located on approximately 60 acres, features a 98,000-square-foot loading warehouse with 226 docks, a fuel island and 25,000-square-foot truck maintenance and cleaning building, along with office space.
The terminal will be a 24-hour operation, busiest at night, with the bulk of the 120 to 140 trucks arriving and leaving from throughout the Midwest during the night. “We’ll be handling over three million pounds of freight a night through the new LaSalle facility. Eighty percent of the cargo will be delivered the next day, or in two days,” says Franz. According to the Con-way spokesman, “Every community we serve today will continue to receive service, with some seeing improvements.”
Con-Way relocated its operation and the majority of its business in Rock Falls, IL to LaSalle, with the balance going to the Quad Cities and Rockford, IL. The new terminal will employ about 85 people for driver sales, customer service, sales, operations and management, according to Franz. This includes everyone who worked at the now-closed small Con-way facility in Peru, IL, along with 10 from its now-closed Rock Falls facility. Of the 23 employees at Rock Falls, 21 remain with the company.
“LaSalle is pleased that Con-way chose LaSalle for the location of their $20-plus million facility,” says Art Washkowiak, mayor of the city of LaSalle. “It is a welcome addition to our industrial park and the creation of additional jobs is certainly a welcome addition to the local economy.”
“We are extremely happy to see this project come to fruition and locate their facility in LaSalle. This is a great addition to the area,” says Barb Koch, executive director/CEO of the Illinois Valley Area Chamber of Commerce and Economic Development (IVAC), who worked with Con-way throughout the site selection and enterprise zone process.
North Carolina’s Piedmont Triad: World-Class Infrastructure With Ready Access
Polo Ralph Lauren recently unveiled its 330,000-square-foot distribution and fulfillment center in High Point, NC. The company has had a presence in High Point since 1991 with a major distribution center that serves retail operations for the entire U.S. The new facility was built specifically to provide support for the company’s Internet direct sales divisions, serving people who place orders via Internet or phone. The new facility brought 215 new jobs in management, technology support, warehouse and distribution, contact center, and embroidery to the Piedmont Triad, the region that encompasses Greensboro, Winston-Salem and High Point in North Carolina. The company, which announced in 2006 that it would create up to 210 jobs by December 2010, has met that goal about two and a half years ahead of schedule, according to the region’s economic development officials. Here are some of the reasons Ralph Lauren and other high volume distribution centers are doing so well in the Piedmont Triad:
The region’s mid–Atlantic location—midway between New York and Miami; Washington D.C. and Atlanta—puts more than half the U.S. population and most major markets within 650 miles. More highways converge in the Piedmont Triad than in any other region in North Carolina. In fact, I-40, I-85, and I-77 provide excellent north-south, as well as east-west connectivity, while future I-73 and I-74 will increase access to key Southeastern ports and Midwest markets.
Centrally positioned along the rapidly growing I -85/1-40 corridor between the Research Triangle and Charlotte regions, the Piedmont Triad offers “half day” OTR transit to the state’s deep water ports at Wilmington and Morehead City—only three and a half hours driving distance from the center of the region.
The Piedmont Triad Inland Terminal (PTIT), operated by Bridge Terminal Transport under contract with the NC Ports Authority, is a regional intermodal terminal connecting the Piedmont Triad to North Carolina’s deep water container port at Wilmington. The state’s other deep water port at Morehead City specializes in handling bulk and break bulk materials and specialty cargoes.
Piedmont Triad International Airport’s central location in the region makes air cargo service a central component of the region’s supply-chain cluster with enplaned and deplaned freight totaling more than 160 million pounds each year, which will increase dramatically when the FedEx Mid-Atlantic hub begins operations at the airport in 2009.
Norfolk Southern, CSX Transportation and several short line railroads provide rail service in the region. Both Norfolk Southern and CSX Transportation have several routes that serve central North Carolina, including the Piedmont Triad, with Norfolk Southern operating a north–south mainline that connects the Northeast and Midwest to Atlanta via Greensboro in Guilford County.
Norfolk Southern operates an intermodal terminal at Greensboro and a bulk transfer terminal at Winston–Salem, in Forsyth County, while CSX Transportation operates a rail–to–truck TRA NSFLO SM transloading facility at Winston–Salem.
The Piedmont Triad has one of the largest concentrations of trucking firms on the East Coast, providing a full range of transport services including dry freight, LTL, TL, liquid bulk, refrigerated, and heavy lift. In total, there are more than 150 trucking companies serving the region, with more than 100 of these firms operating local terminals.
As North Carolina’s manufacturing center, the Piedmont Triad is home to an expanding community of global companies taking advantage of the region’s logistics and distribution competencies. FedEx is constructing its new Mid-Atlantic Hub at Piedmont Triad International airport. Scheduled to begin operations in 2009, the one–million–square–foot facility will be capable of sorting 24,000 packages per hour and will be served by 20–25 aircraft each weekday. The hub will represent a significant logistics advantage to companies operating in the Piedmont region—extending workday shipping access and streamlining delivery to East Coast markets.