By Nora Caley
From the September / October 2023 Issue
The logistics business is a complex one, and it is affected by several economic indicators. While predicting the future of the industry might seem as complicated as moving freight around the globe, the consensus is that the future of the logistics industry is a positive one.
The Logistics Managers’ Index (LMI), a score of eight components to describe the health of the industry, is down, but the news is not all bad. The LMI, the result of a monthly survey of logistics supply executives who are members of the Council of Supply Chain Management Professionals (CSCMP), was 45.6 for June 2023. This is the fourth consecutive month that the index has reached a new all-time low. A reading above 50.0 indicates that logistics is expanding, and a reading below 50.0 indicates the industry is shrinking.
The decline was due to the complex relationship of the various metrics. There were decreases in inventory levels and in the growth rate for inventory costs, which led to an increase in warehousing capacity and transportation capacity. Transportation utilization and transportation prices also contracted. The report noted that while the U.S. economy is strong with low unemployment and continued consumer spending, much of the growth is related to services, not goods, and that affects the logistics industry.
Still, the future is bright. The 2023 State of Logistics Report, produced annually for the CSCMP by global consulting firm Kearney, pointed to several optimistic points. In 2022, the U.S. e-commerce market grew by 8% to $1.03 trillion, and is now 14.5% of the entire U.S. retail market. Also according to the report, third-party logistics providers are updating technology investments such as Internet of Things (IoT) and the cloud.
Here are some regions that are attracting logistics related businesses.
Jefferson County, Illinois: Best Kept Secret
Jefferson County is a thriving community situated in the heart of Southern Illinois where companies both large and small find not only success but a feeling of belonging.
Jefferson County’s ideal location is simply scratching the surface when considering reasons why it is one of the nation’s best kept secrets for logistic companies. The county seat and largest city, Mt. Vernon, is located precisely at the intersection of Interstates 57 (the longest Interstate in Illinois) and 64. Over 45,000 cars per day travel by one of Mt. Vernon’s three Interstate exits. Because of its interstate access, Jefferson County is truly a short trip to anywhere. Head east and one finds themself in Evansville, IN in just over an hour. Head west, and they’ll be in downtown St. Louis, MO in the same amount of time. While the highway system is a great asset, it’s not all this community has to offer.
Mt. Vernon was built by the automotive industry. Automobiles would be shipped via rail to the factories downtown where they would be outfitted with parts and sent back out. Now, almost 100 years later, the primary mode of transportation for sending and receiving those cars still exists—the railroad. Just outside of downtown is one of the Mt. Vernon’s hidden gems, Milano Railway Logistics Services. It’s at this location that 4 Class 1 railroads converge—Union Pacific, Norfolk Southern, BNSF (via Evansville Western Railway), and CSX (via Evansville Western Railway).
Unmatched interstate access and one-of-a-kind railroad connectivity would be enough to attract some members of the logistics industry to Jefferson County, but the benefits don’t stop there. Just east of Mt. Vernon lies the Mt. Vernon Outland Airport (MVN). The commercial-sized 6,500 feet runway sees approximately 27,000 aircraft operations each year.
Distribution is not unfamiliar to Jefferson County. Since 1989, Walgreens Distribution has called Mt. Vernon home. NAPA Distribution has been operating here since 1977. In addition, the city hosts a 48-acre facility for Continental Tire the Americas.
One company taking advantage of Jefferson County’s numerous benefits is plastic compound maker Manner Polymers. Headquartered in McKinney, TX, Manner will be opening a 100,000-square-foot expansion in Mt. Vernon. The new $54 million site will increase the company’s production capacity of polyvinyl chloride by 100 million pounds. Making use of the rail lines and interstate accessibility, the expansion will increase domestic supply for markets including electric vehicle wiring, appliance manufacturing, and medical applications.
The new state-of-the-art facility represents a major industry landmark for sustainability as well, serving as the first ever solar-powered PVC compounding plant that operates using its own clean energy generated on-site. To achieve this feat, Manner Polymers took advantage of REV Illinois, one of numerous incentives offered by the State of Illinois. REV Illinois is designed to work with the growing clean energy economy in Illinois, and offers competitive incentives for companies that manufacture EVs, parts or components for EVs and other clean energy sectors.
From the outside, Jefferson County, Illinois appears to be nothing more than fields and tractors. But between the corn and soybeans lies a community on the cutting edge of innovation.
Visit www.jeffcodev.org for more information.
