To reduce transportation costs, Leffew recommends strategically locating warehouses and distribution centers near the main mode of transportation for shipping/receiving and to your distributors, suppliers, customers, or manufacturing plants. Locating in an intermodal- adjacent facility also provides bene ts. “Transportation is 12-14 times the cost of real estate,” Roth notes. “By locating on an intermodal campus, corporations can directly impact their transportation spend by saving on drayage costs and carbon emissions.” To reduce recommends warehouses near for distributors, manufacturing Locating adjacent On average, the annual cost savings by locating at an intermodal center is “equivalent to 50% of a corporation’s rent depending on their intermodal volume,” he adds. “In addition, the CO2 savings are also measurable and perpetual due to the reduced drayage miles.” Leffew also recommends the following tips for factoring transportation costs into site selection decisions: • Research each potential area’s workforce availability, skill, and wages on the front end. Many real estate service providers now have integrated tools that consolidate building availability and rates, labor data and wages, transportation costs, and GIS mapping into one platform. The tool can offer a facility ranking based on key metrics the user identi es.
• With vacancy at an all-time low and rates at an all-time high, evaluate market rents compared to transportation costs; it may be less expensive to consider a nearby location. For example, surging rents in the Inland Empire in Southern California pushed many companies to Las Vegas and Phoenix, where average rates are considerably less. Other important factors to consider, Leffew says, include state and local incentives that may help reduce upfront capital costs, investments, and ongoing taxes; and local, state, and federal regulations—building codes, zoning, environmental and safety regulations—that may impact the operation. A new focus on micro-distribution plays a major role in which areas are gaining favor. “The pandemic took a knife to big retail, which has changed last-mile distribution tremendously,” says Christopher Steele of EBP-US. With e-commerce’s emphasis on micro- distribution and ful llment, Steele points to 24 locations in the United States that support 100% of last-mile distribution within 100 miles. Yet, with all these recommendations, the right choice for any one company is always unique. “It depends on the company’s exposure and markets,” Steele says. “The obvious answer sometimes is not the right answer when you look at the speci cs.” n
U.S. Hot Spots For Logistics Facilities Where are the best and hottest places to expand your logistics operations? That depends on who you ask. Perennial all stars include Atlanta , Chicago , Columbus , Dallas- Fort Worth , the Inland Empire of California, Las Vegas , Phoenix , Savannah , and New Jersey , according to Cushman and Wakefield’s Q3 Industrial Report, while Colliers’ 10 Emerging U.S. Industrial Markets to Watch in 2023 adds Austin , Charleston , Memphis , Raleigh-Durham , Reno- Sparks , Richmond , Salt Lake City , and Stockton/Central Valley of California. In the coming fight for power, water, and climate safety, “ Illinois , Pennsylvania , and the Midwest will thrive” in the manufacturing space, says Adam Roth of NAI Himan. Newmark’s Terry Coyne picks Columbus, Ohio , as his hidden gem, because of its pro-business, incentive-heavy approach. He also cites Nashville, which has won site selection awards recently. The Southeastern region “is rocking and rolling,” says Cameron Peel of Camrett, thanks to low wages and taxes, and a growing population.
RLS Logistics decided to expand its Newfield, New Jersey, cold storage facility to leverage its existing assets and remain in an area that is conducive to serving the East Coast market.
148 Inbound Logistics • January 2024
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