Industry Focus: Logistics – Going With The Flow

By Business Facilities Editorial Staff
From the March/April 2014 issue

SelectUSA states that “A highly integrated supply chain network in the United States links producers and consumers through multiple transportation modes, including air and express delivery services, freight rail, maritime transport and truck transport. To serve customers efficiently, multinational and domestic firms provide tailored logistics and transportation solutions that ensure coordinated goods movement from origin to end user through each supply chain network segment.”

The Council of Supply Chain Management Professionals’ (CSCMP) 24th Annual State of Logistics Report® (presented by Penske Logistics and delivered by author Rosalyn Wilson, senior business analyst at Delcan) provides trends in the logistics industry that can help professionals affect progress and innovation, and help companies remain proactive in their approach to alleviate increased costs.

“Logistics costs as a percentage of GDP in the U.S. compares quite favorably to that of our trading partners,” says Wilson. “Slow economic growth has kept the percentage low, but the supply chain sector has made great strides in productivity, asset utilization and inventory management in the past three years.” Wilson predicts that these supply chain management improvements will continue even as higher volumes return to the market place.

Spending in the U.S. logistics and transportation industry totaled $1.33 trillion in 2012, a 3.4 percent increase from 2011, remaining at 8.5 percent of the U.S. gross domestic product (GDP). The report however indicates mixed results for key modes of transportation.

While trucking transportation costs rose 2.9 percent in 2012, the industry’s delicate balance between supply and demand will likely be disrupted due to new regulations. With trucking already short approximately 30,000 drivers, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) Hours of Service (HOS) rule that went into effect on July 1, 2013 could create a reduction in industry productivity, projecting the need for another 100,000 drivers without an increase in shipping volume. Subsequently, the U.S. Labor Department forecasts that truck drivers will account for 43 percent of the growth in logistics jobs in the coming years.

In comparison, railroads are in a much better position regarding infrastructure, equipment and personnel. This is a result of the industry’s $13 billion in capital spending in 2012, a 16.1 percent increase over 2011 levels. Rail transport costs paid by users rose 4.9 percent in 2012 and CSCMP believes rail is in position to take business from trucks and ships.

The 24th Annual State of Logistics Report predicts a continuing plague of overcapacity and rate problems for ocean carriers due to optimistic economic forecasts that led to companies expanding their fleets. Maritime costs fell 0.9 percent in 2012 as vessel volume rose 7.2 percent. Wilson added that capacity is expected to rise even more as new vessel deliveries exceed the fill demand.

Airfreight revenue gained 3.1 percent in 2012 while domestic air cargo ton-miles rose 2 percent and international fell 3.9 percent, for a total drop of 3.6 percent. Total tonnage declined 2.2 percent—1.4 percent for international and 0.1 percent for domestic. According to the report, the all-cargo air industry is facing “chronic over-capacity and deteriorating yield.”

Even though potential government monopoly regulations will prevent a shift to consolidate logistics services across sectors, it is anticipated that intermodal will continue to grow and become one of the most efficient ways to move goods in what the report calls the “new normal” of logistics—slow growth, higher unemployment levels (7.5 percent in the U.S.), higher reliance on part-time workers, higher healthcare costs for businesses and less predictable freight service.

Consistent with the past few years, the 24th Annual State of Logistics Report expects slow albeit sustainable growth for the future, with the logistics GDP hovering somewhere between 2.5 percent to 4 percent. Wilson believes that “the economy and logistics sector will slowly regain sustainable momentum, but we will still experience unevenness in growth rates.”


Located in the heart of Illinois; in the great Midwest; within 200 miles of metropolitan areas of Chicago, Indianapolis and St. Louis; and with more than 95 million customers within a 500-mile radius, Decatur is well positioned to get you where you want to go and access customers you want to reach.

Well-established as a leading agri-business and manufacturing center, Decatur serves as the North American headquarters for Archer Daniels Midland and is the home of one of Caterpillar’s largest manufacturing complexes. In addition, Decatur’s diverse economic foundation includes major operations for Tate & Lyle, another agri-business leader and the Mueller Company, a worldwide leader of water distribution products.

Decatur is becoming a leading transportation and logistics hub. Its centralized location is directly connected by a robust network of Interstate highways (I-72, I-55, I-57 and I-74) along with four-lane U.S. Highway 51, providing uncongested, toll-free access to locations and markets to the north, east, south and west. Three Class I railroads (Norfolk Southern, Canadian Northern and the CSX) serve Decatur and are directly interconnected through a privately owned intermodal ramp as part of the Midwest Inland Port. This unique, intermodal facility provides direct access to ports on both coasts, domestically and through Canada, as well as access to the Gulf of Mexico and Mexico. The Norfolk Southern’s Decatur rail yard is one of the nation’s largest, helping support Decatur’s status as one of the leading global trade cities. The Decatur airport provides another important transportation option; with runways of 8,500 feet in length and 150 feet wide the airport is capable of handling large freight carrying aircraft. Together, this transportation infrastructure (highway, rail and air) provides access to suppliers and customers, both domestically and worldwide.

The Midwest Inland Port is served by a Foreign Trade Zone and provides local Customs Clearing, features that are being enhanced to provide a more robust set of service offerings. Ample land is available for development of facilities that can benefit from this complex of transportation and logistics services and is ideal for the development of warehousing, distribution and manufacturing opportunities. Local incentives through a well-established Enterprise Zone, coupled with additional state incentives are available to businesses seeking to locate in the Decatur area.

Decatur has strong utility infrastructure capacity. The City recently approved a $90 million investment in its water supply capabilities to ensure an ample water supply for existing and future businesses. The State of Illinois was one of the leaders in establishing competitive choice for electricity, and Decatur currently enjoys sufficient electric capacity to support future growth at prices that are better than those of surrounding states.

Quality higher education is available through local and regional offerings. The University of Illinois, a world leading research institution, is within one hour; and Decatur-based Millikin University provides quality offerings in a variety of disciplines. These universities help provide good access to the talent necessary to support business needs today and tomorrow. In addition, Decatur’s Richland Community College has recently completed a major investment in its Business Technology Center and is capable of working with businesses to develop tailored training programs to meet individual business needs. And education at the elementary and high school levels is a community priority, as evidenced by the complete renovation of Decatur’s two public high schools. Several parochial schools provide additional educational choices.

Quality of life also is a Decatur attribute. The Decatur Park District is moving forward with a comprehensive Lake Shore Landing Project, which will create a uniquely attractive combination of facilities and activities developed around Lake Decatur. In addition, the Park District operates high quality golf courses and an extensive complex of biking and walking trails. The City of Decatur is nearing the completion of its major Downtown Streetscape renovation, creating one of the most attractive downtowns in downstate Illinois, with revitalized shopping and dining options. Access to quality health care for routine and specialized situations is provided by two community-based hospitals and the highly regarded Cancer Care Institute. And nearby communities of Forsyth and Mt. Zion provide additional living, educational and recreational choices.

This is just a snapshot of Decatur’s work in progress. They invite you to come grow with them.


The southwest is the fastest growing region of the country and New Mexico is right at the heart of it, offering a very low cost of doing business well suited for logistics, transportation and distribution. The state has the lowest property tax burden in the nation, according to the Tax Foundation, and property is assessed at only 33 percent of its market value. There is no inventory tax, which is particularly advantageous to distribution companies.

Real estate, particularly in non-urban areas, is very competitively priced, as are the hourly wages for warehouse and distribution employees. Abundant natural resources mean the state is a net exporter of electricity, which is reflected in the price of natural gas and electricity.

Supported by three interstate freeways, a vast railway system and a number of regional and international airports, New Mexico offers direct access to much of the United States, as well as the international borders of Canada and Mexico. From New Mexico, it’s possible to reach Texas, Arizona, Colorado, Kansas, Oklahoma and Utah within one day’s trucking, and California markets in two days. Distribution companies, manufacturers and other business are well positioned here to serve both east and west coast clients.

The state is crisscrossed by three major interstates: I-25 (north-south), I-40 (east-west) and I-10 (east-west), in addition to two- and four-lane highways. The volume of truck traffic into the state translates into low backhaul rates for goods leaving the state.

The cost of transporting goods from the ports of California, for example, also is reduced by utilizing the railroads that come directly into New Mexico. Union Pacific and Burlington Northern Santa Fe Railway are among those serving the state and provide transportation of raw materials and finished products throughout the nation.

New Mexico provides transportation and storage logistics that make doing business simpler. Rail access is provided by both the Burlington Northern Santa Fe (BNSF) and Union Pacific (UP) railroads, as well as several short-line railroads. In Belen, BNSF operates the largest inspection yard on the southern transcontinental corridor, linking Southern California and Chicago, and serves as a regional maintenance and fueling facility for trains up to 10,000 feet long. The Sunset Route, the 760-mile Union Pacific corridor between the ports of Los Angeles and El Paso, is an important transcontinental route for goods and business. The Union Pacific intermodal facility in Santa Teresa will provide increased service from Mexico by both road and rail, with established logistics parks that have rail spurs providing short-line railroad cross-docking services. The Santa Teresa and Columbus ports-of-entry have overweight cargo zones with a six-mile radius for trucks carrying a reducible load up to 96,000 lbs. Public warehousing also provides the ultimate flexibility in storage for companies.

The BNSF and Union Pacific railroads provide direct service to the Ports of Long Beach and Houston, as well as ports of entry at the Mexican and Canadian borders.

The Burlington Northern Santa Fe Railway serves 28 states and two Canadian provinces, a total of 32,000 route miles. It operates a multimodal rail yard in Belen, 30 miles south of Albuquerque. The company is investing $90 million on track and rail capacity improvement projects in New Mexico. BNSF also is investing approximately $1 billion on locomotive, freight car and other equipment acquisitions, many of which will serve New Mexico.

Union Pacific serves 25,000 customers in 23 states across the western two-thirds of the U.S., a total of 31,900 route miles. The railroad has a $400 million, 2,200-acre intermodal facility near completion at the Santa Teresa International Port of Entry to Mexico. The new facility is located just west of the Santa Teresa Airport and will include fueling facilities, crew change buildings, locomotive inspection tracks, an intermodal ramp, a switching yard and 200 miles of track.

New Mexico has three ports of entry bordering Mexico, all overseen by the New Mexico Border Authority with varying degrees of service: Santa Teresa, Columbus and Antelope Wells.

Union Pacific currently is completing a new, state-of-the-art rail facility in southern New Mexico. For the first time ever, New Mexico will have a key inland port, positioning the Santa Teresa/El Paso area as a strategic focal point for shipments in the southwestern United States.

The new facility will increase capacity for lifts, parking and containers as volume in this area continues to grow. Located along the busy “Sunset Route” between El Paso and Los Angeles, the Santa Teresa Facility also will allow additional access for shippers and intermediaries in the area.

Facility features include an intermodal ramp that will permit businesses more immediate access to the efficiencies of freight trains, fueling facilities to enhance commerce and goods movement, and an intermodal block swap/switching yard that will incorporate the latest engineering techniques for improved efficiency and throughput.

More than 60 airports are located throughout New Mexico. Four international airports serve different regions of the state:

  • Albuquerque International Sunport provides nonstop service to 30 cities daily via eight commercial carriers. Three cargo carriers serve the airport: Federal Express, DHL and UPS.
  • El Paso International Airport is served by five commercial carriers with nonstop service to 18 cities. It is served by four cargo carriers: Federal Express, UPS, DHL and Cargo Force.
  • Rick Husband Amarillo International Airport is served by four commercial carriers: American Eagle, Continental Express, Southwest and United Airlines.
  • Tucson International Airport is served by six commercial carriers: Alaska Airlines, American, Delta, Southwest, United and US Airways with nonstop service to 14 cities.

Airports in Carlsbad, Farmington, Hobbs, Roswell, Santa Fe and Silver City also offer passenger service to cities within New Mexico and bordering states.

In 2011, New Mexico created a six-mile overweight cargo zone around the Santa Teresa port-of-entry. The zone allows trucks up to 96,000 pounds of cargo even if they have a reducible load. The permit is $250 annually and is applied to a single truck, giving companies the flexibility to pay for only the trucks that will travel in the zone rather than paying for their entire fleet.

New Mexico also is geographically well positioned to serve major markets in Mexico by both road and rail. The ports at Matamoros and Mazàtlan are growing, making the connection from Santa Teresa an increasingly important one. The highway and rail systems connect these ports to the Santa Teresa port-of-entry where a large number of containers shipped in and out of Mexico will utilize the Santa Teresa intermodal facility.


For companies seeking a central location that reaches numerous major metro areas, excellent transportation connections and a capable labor force, Joplin, MO is a great place to locate.

The Joplin Metro area in southwest Missouri is in the center of North American markets. Major metros such as Dallas, Kansas City, St. Louis, Tulsa, Little Rock and Memphis are just hours away. Transportation to those markets is efficient, thanks to Interstate highways and substantial rail connections. Commercial air service is available at Joplin Regional Airport and three other major airports within 90 minutes drive time.

Companies in the Joplin Metro area benefit from a productive, available labor pool of more than 93,000 people. Missouri Southern State University in Joplin offers a broad range of standard and business-specific classes, and a strong industrial technology program. Crowder College is a source for customized technical training. Overall, between the Joplin schools and MSSU, more than $100 million has been spent on educational facilities.

Joplin Airport
This 30,000-square-foot terminal replaced Joplin Airport’s existing facility, which was originally constructed in 1948. The tower, constructed of 16 reinforced steel piers (each 30 inches in diameter and drilled 20 inches into bedrock), was designed with stormy weather in mind: the glass on the tower is designed to withstand 120-mile-per-hour winds. (Photo: Crossland Construction Company, Inc.)

Joplin’s quality of living is enhanced with two major regional medical centers, more than 150 restaurants and a wide variety of retail from locally owned shops to the 114-store Northpark Mall.

With Wal-Mart’s headquarters in nearby Bentonville, AR (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.

The Joplin Metro area’s position for serving national markets is nearly as advantageous as Chicago or Kansas City. Interstates 44 (east-west) and 49 (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.

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.


The Tennessee-Tombigbee Waterway (commonly referred to as the Tenn-Tom) is a 234-mile Waterway that connects 17 states to the Gulf of Mexico and the world. It provides access to more than 16,000 miles of navigable, inland waterways in the United States. It is a slack water route and the shortest distance from mid-America to the Port of Mobile in the heart of the Gulf of Mexico. It also is a shortcut and reduces the boating distance from Knoxville, Tennessee to the Gulf of Mexico by more than 665 miles. The Tenn-Tom has available capacity and it is open for business.

Tennessee-Tombigbee Waterway
Tennessee-Tombigbee Waterway (Photo: Tennessee-Tombigbee Waterway Development Authority)

The Tenn-Tom has certified industrial sites available and several local economic development organizations that will be happy to show them to you. These communities along the waterway are business friendly. Recent announcements have credited this attitude and willingness to work with the developers—along with the location on the Tenn-Tom—as the key factors that persuaded them to choose the site. It is home to some of the nation’s largest steel manufacturers including Severstal and U.S. Steel.

The steel industry is only one example of those taking advantage of the Tenn-Tom and its regional resources. Located in the “wood basket of the nation,” the Tenn-Tom provides access to over 34 million acres of commercial forests, and approximately two-thirds of all recoverable coal reserves are found in the region. These industries have, and are realizing the benefits of waterborne transportation.

By using the waterway, manufacturers take advantage of the most energy-efficient, safest and environmentally friendly mode of transportation. They can ship more cargo with less energy, corresponding to fewer emissions. And by using the waterways instead of the highways, it is much safer for people on the roads and for the environment from accidents and spills. By using less energy, these shippers on the waterways save money. These cost saving advantages are not only important to investors but also to global customers and to everyone else as consumers of these products.

The Tenn-Tom serves a wide range of public ports and terminals throughout the region, many of which can provide a full scope of intermodal services and warehousing. The Tenn-Tom has a standing Memorandum of Understanding with Panama and is uniquely positioned to serve an increasing trade market with the world’s foreign markets. Once the expanded Panama Canal is completed in 2015, more trade is expected in the Gulf and the Eastern Seaboard. The Port of Mobile has a world class 850,000 TEU container port already in operation and, this along with the Tenn-Tom’s designation as a Marine Corridor (M-65) by the United States Department of Transportation, makes the waterway “shovel ready” for Containers-on-Barge. In fact, the first established service is scheduled to begin on May 1, 2014 between the Port of Mobile and the Itawamba County Port in Fulton, Mississippi. Once established, containers on barge can go up the connecting Tennessee River to Paducah, Kentucky and markets beyond.

The Tenn-Tom also is home to prime waterfront industrial sites in the region. These sites are ideal locations for manufacturers that need, or at least have the option to use, multiple modes of transportation for their raw materials and finished products.

In addition, with unlimited recreational opportunities, the waterway has become a way of life. Boating, sport fishing, hunting and camping are some of the ways that people use the Tenn-Tom. The “Loopers” use it for their sojourns thru mid-America across to the Eastern Seaboard, around Florida and back to the Gulf. Bass and crappie tournaments have drawn worldwide attention. With the mandated Wildlife Mitigation established in Alabama and Mississippi, hunting along the Tenn-Tom is prime territory. And with nine campgrounds/parks, most of which are equipped with all the necessary hook-ups, one can enjoy the outdoors while still having the conveniences they have grown accustomed to.

With all this available as a draw to the region, it is not surprising that an eager and ample work force is available in an enviable business climate.

Billions of dollars have been invested in the Tenn-Tom corridor and much more is on the way. For more information, please contact the Tennessee-Tombigbee Waterway Development Authority at 888-Tenn-Tom or visit


Location is a key factor that business leaders consider when determining where to expand operations or build new facilities. Executives also analyze ways to make sure goods can be received and distributed too. From a logistical perspective Southwest Louisiana is the right location for many kinds of business ventures. When a corporate leader considers the region’s direct access to land, water, rail and even pipelines they will understand why the five parish area is home to $65 billion in economic development projects. Simply put, it’s easy to move goods in and out of the area.

“The infrastructure in the five parish area is robust and is a major factor in our existing industrial base,” said George Swift, president and CEO of the Southwest Louisiana Economic Development Alliance.

Interstate 10 crosses approximately 40 miles through Calcasieu and Jefferson Davis parishes—starting from the Texas/Louisiana boarder—and connects with U.S. 171, U.S. 165 and U.S. 167, all of which provide north and south connections to move goods and provide services.

Lake Charles
Port of Lake Charles. (Photo: Southwest Louisiana Economic Development Alliance.)

Interstate 10 loops south around Lake Charles—which is the governmental center for Calcasieu Parish—and is used every day to transport goods from the area’s industrial complex and ports.

Grant Bush, executive director of the Imperial Calcasieu Regional Planning and Development Commission, said that businesses that locate in Southwest Louisiana will benefit from being located in the Interstate 10 corridor.

“It is estimated that $50 trillion in commerce takes place along I-10. And Southwest Louisiana is a hub of activity that happens to be situated between Houston and Baton Rouge which are two major commerce centers,” said Bush. “And all agencies and municipal governments here are constantly working to plan and improve our road system to meet the needs of business and industry.”

Another mode of transportation for oil, gas and petrochemicals is the pipeline that is part of Louisiana’s 125,000-mile system.

The Calcasieu Ship Channel is approximately 30 miles long with deep draft navigation capabilities and connects the Port of Lake Charles (nation’s 13th busiest port) with the Gulf of Mexico. Southwest Louisiana also is on the path of the Intracoastal Canal which intersects with the ship channel. Intracoastal Canal is part of a 3,000-mile waterway transportation system that connects the Atlantic Ocean to the Texas/Mexico border.

“The Port of Lake Charles offers its unique combination of location, infrastructure, operational capability and ease of transportation—with access to rail, water and the Interstate system. This is why many global companies choose to locate along the Calcasieu River Ship Channel. The Port’s properties, dispersed along the channel, are more than just cargo terminals. They provide a venue for facilities to locate for dozens of tenant companies that generate jobs and dollars for the area’s economy,” said Dan Loughney, Director of Marketing and Trade Development, Port of Lake Charles.

Six ports located in Cameron, Calcasieu and Jefferson Davis parishes comprise the Southwest Louisiana Port Network. Combined, their facilities allow access to deep water and river transport lanes along with connections to railways and highways to help import and export petroleum, liquid natural gas, petrochemical products, aluminum, food and numerous other products.

Major waterways that are used by shipping vessels are: Sabine River, Calcasieu Ship Channel, Mermentau River and the Intracoastal Canal.

Commercial airline services are located at Lake Charles Regional Airport. American and United airlines operate at the airport. Several helicopter companies also are located at the facility and serve the oil and gas industry.

“Our area is rich in aviation assets. There are four airports in Calcasieu Parish alone. And from the regional airport, a business person can get to Houston and Dallas easily,” said Heath Allen, executive director of the Lake Charles Regional Airport. Seven airports are located in the five parish area. The others are: DeQuincy Industrial Airpark, Beauregard Regional Airport in DeRidder, Jennings Airport, Chennault International Airport in Lake Charles, Allen Parish Airport in Oakdale and Southland Field in Sulphur.

The region also has a deep railroad history dating back to the times when lumber was king along the Gulf coast. An extensive rail system connects all of the petroleum and chemical producing complexes. Rail also is used to move an assortment of products into and out of the area. “We have several major railroad expansions underway and planned for in our area to make rail service even better,” Swift said.

Kansas City Southern Railroad, Union Pacific Railroad, Burlington Northern Santa Fe Railroad, Amtrak, Lake Charles Harbor and Terminal District Railroad and Timber Rock Railroad all provide service throughout Southwest Louisiana.

Southwest Louisiana is home to the most impressive network of pipelines in the U.S.: hundreds of miles of pipe used to move crude oil and chemicals inside and outside the area. This “second to none” infrastructure has made SWLA a magnet from some of the biggest energy-related projects in the nation.