Real estate brokers expect a surge of activity With higher trucking costs and nationwide truck driver shortages posing a risk to distribution strategies, shippers are increasingly looking at transportation alternatives – most predominately, intermodal rail.
BNSF’s Logistics Park Kansas City Intermodal Facility is a 1,550-acre master-planned distribution and warehouse development anchored by BNSF’s intermodal facility.
BNSF’s Logistics Park Kansas City Intermodal Facility is a 1,550-acre master-planned distribution and warehouse development anchored by BNSF’s intermodal facility.
The trend is impacting demand for warehouse and distribution space in markets with access to significant intermodal connections. Consequently, commercial real estate services firm CBRE predicts a big uptick in industrial space activity in markets with significant intermodal facilities. Among the leading locations, CBRE says, are the Inland Empire, Indianapolis, Baltimore, Dallas/Fort Worth, Orlando, central New Jersey, Portland, San Antonio, Northern Virginia, and Houston. That’s because much of the new construction in these markets is on or near intermodal pathways that can take advantage of the links these rail lines provide to ports and major distribution hubs. “Rising transportation costs, particularly those associated with trucking, are forcing supply chain users—manufacturers, importers, and exporters—to devise blends of warehouses and distribution centers that will most efficiently service the need for port access while enabling quick delivery to end users in densely populated metropolitan areas,” says Scott Marshall, Executive Managing Director, Industrial Services, The Americas, CBRE. For that reason, locations that offer access to rail, is the obvious and very cost-effective choice, CBRE maintains. It’s no secret that rail usage has been on the rise. The Association of American Railroads recently reported that the week ending October 25 registered the third highest level of intermodal use in US history with traffic up 6.7% year over year. Strategically Central Central Florida Intermodal Logistics Center (CFILC) in Winter Haven, Florida, is a good location that benefits from rail. Strategically located in central Florida, the 318-acre rail facility can reach 19 million people living within a 200-mile radius and has access to major domestic markets such as Atlanta, Chicago and New York. Its terminal has the capacity to move 300,000 containers annually. “It is designed for scalable expansion as freight volume grows,” the CBRE study states. The project is anchored by a nearby mammoth 930-acre industrial park. Mike Mullen of Winter Haven Industrial Investors LLC reported in the Tampa Bay Business Journal that he envisions 8 million square feet of warehouse and light industrial space at the site in what will become a “distribution mecca for Fortune 500 companies” such as Walmart and Home Depot. Another good example is the intermodal facility in downtown Indianapolis. Since opening in 2013, it’s been receiving a lot of buzz as an all-rail, direct West Coast intermodal rail connection for manufacturers, importers, exporters, developers, agribusinesses and logistics providers for containerized products moving to/from Asia. Developed by the Indiana Rail Road Co and CN Railway, the facility is touted as “Asia to Indiana Nonstop. Its intent is to offer shippers a way to avoid traffic bottlenecks in Chicago and the congested I-65 corridor to Central Indiana. “This service provides a more reliable, consistent and environmentally-friendly movement of goods that is less susceptible to costly weather and congestion delays,” says Thomas Hoback, president and CEO of Indiana Rail Road. Mega Master Planned Projects With new supply chain configurations altering the industrial landscape, companies are not only flocking to where they have intermodal access but also where they can create synergies with innovative companies that are exploring technology to advance fulfillment. Take Home Depot, for example, which moved several years ago into its 1.6 million square foot facility at the CenterPoint Intermodal Center (CIC) in Joliet/Elwood, Illinois. The facility complements Home Depot’s existing 657,000 square foot Rapid Deployment Center to create a combined 180-acre logistics campus with more than 2.2 million square feet under one roof. Its facility at CIC serves as the company’s Stocking Distribution Center (SDC). As North America’s largest inland port, CIC offers the lowest dray charges in the region, heavyweight capacity roads, the ability to operate yard hostlers within the park roads, reduced fuel surcharge exposure, direct access to both the Union Pacific and Burlington Northern Sante Fe’s (BNSF) intermodal facilities, a foreign trade zone and an enterprise zone. Home Depot’s SDC is located 1.75 miles from Union Pacific’s Global IV entrance and 3.5 miles from BNSF’s Logistic Park Chicago entrance. When the SDC was completed in 2013 it became the largest occupied building in Joliet. CIC is among the largest master-planned inland ports in North America. Situated on more than 6,500 acres just 40 +/-miles southwest of downtown Chicago, CIC - Joliet/Elwood is billed as being strategically positioned at the epicenter of the region’s immense transportation infrastructure. Adjacent to the I-55/I-80 interchange and anchored by the BNSF Logistics Park-Chicago and Union Pacific-Joliet Intermodal Terminal, CIC - Joliet/Elwood is ideal for regional goods distribution. The BNSF Logistics Park-Chicago is a 770-acre intermodal facility. Opened in 2002, the facility has grown to become one of the nation’s largest and most active inland rail terminals. The 785-acre Union Pacific-Joliet Intermodal Terminal opened in 2010. It offers international, as well as domestic intermodal service, to and from every major West Coast port. Volumes are projected to exceed 1.2 million lifts per year during full build out. Slightly further afield, the 370-acre Centerpoint KCS Intermodal Center in Kansas City that is anchored by Kansas City Southern rail lines. Adjacent to this intermodal facility is a 940-acre industrial park, which gives the Center an advantage for distribution centers seeking intermodal access. The facility also has east-west and north-south highway and interstate access, meaning shippers can transport goods to 80% of the US population within two days by truck. Also confirming Kansas City as a major logistical hub is a new generation of huge distribution centers that are sprouting along its Interstate 35 corridor to take advantage of the BNSF intermodal facility that opened in October 2013 in Edgerton, Kansas. At three stories tall, these DCs are described as being longer and wider than the Navy’s largest super carriers. Rails arrived from the West Coast via rail. Orders are processed then shipped out by truck. In describing the facilities, Joseph Accurso, a principal at commercial real estate company Kessinger/Hunter & Co stated: “We haven’t had this kind of product for a significant amount of time. We kept hearing Kansas City was the next ring after Chicago, Dallas, Indianapolis, Los Angeles and Memphis.” BNSF’s Logistics Park Kansas City Intermodal Facility (LPKC) is a 1,550-acre master-planned distribution and warehouse development anchored by BNSF’s intermodal facility, the third such facility to anchor a Logistics Park on BNSF’s network. With six 8,000-foot tracks for loading and unloading intermodal trains, more than 1,800 parking spaces and 4,300 container stacking spots at full build-out, BNSF’s LPKC facility was designed to accommodate the growing demands of freight rail transportation in the Kansas City region and has nearly double BNSF’s lift capacity in that market. The Intermodal facility encompasses 433 acres. It is equipped with five wide-span, electric, rail-mounted gantry cranes. No doubt the pace will continue to pick up as more companies employ intermodal rail and seek locations to take advantage of the links that rail lines provide to ports and major distribution hubs.