Lucky Seven: Core Logistics Markets
Warehouse and distribution space is being bought at a record pace in the United States. And it’s not showing signs of slowing down anytime soon.
According to commercial real estate specialists Jones Lang LaSalle, transportation and logistics tenants are absorbing the space faster than industrial developers can build it. Nearly 40 percent of U.S. distribution and warehousing space is concentrated in seven core logistics markets:
- Los Angeles
- California’s Inland Empire
- Dallas-Fort Worth
- New Jersey
These seven logistics markets account for about 52 percent of active construction. What makes them so attractive are their strong multimodal and intermodal connections, with capability to transport and exchange goods by air, rail, boat, or truck.
Here’s a more in-depth look at each market and why it’s included in Logistics’ Lucky Seven:
The second-largest city in the United States, L.A. is home to the busiest port in the nation. The port of Los Angeles, and the nearby port in Long Beach, is the nation’s chief gateway to Asia.
The city’s intricate freeway system makes it a natural center for trucking transportation, and its six commercial airports give the area impressive airlift capacity, says Supply Chain Digital. Also, numerous railroads in the area have extensive facilities for intermodal transfers from both trucks and ships.
And even more industrial development is on the way: Warehouse developer Goodman Birtcher has five Southern California logistics centers in the works, according to the Los Angeles Times.
California’s Inland Empire
This roughly 27,000-square-mile area in Southern California includes Riverside and San Bernardino counties. The IE is comprised of more than 50 cities, towns and unincorporated areas. It lies at the intersection of several highways and railroads, making it a major shipping hub.
The IE has a large supply of vacant land, which is considerably less expensive than in neighboring coastal areas such as Los Angeles and Orange Counties.
Amazon.com, Macy’s, Toyota and other large companies have large distribution centers in the IE. These distribution centers are part of the link that transports goods from ports in L.A. and Long Beach to cities such as Las Vegas, Phoenix and Denver, according to commercial real estate firm CBRE.
DFW leads the nation with more than 16 million square feet in warehouse and industrial building construction, according to The Dallas Morning News.
The metropolitan area is home to Alliance Texas, a fully integrated inland port/intermodal facility that was the first of its kind in the United States. The 17,000-acre complex, in far north Fort Worth, features a Burlington Northern Santa Fe Railway intermodal facility and Fort Worth Alliance Airport, the world’s first purely industrial airport. The logistics hub offers direct access to interstate highways as well as rail connectivity to Chicago (the nation’s busiest inland port), and Southern California (the busiest seaports).
DFW is also headquarters for two major international air carriers, American Airlines and Southwest Airlines, making the area accessible to every major U.S. city within four hours.
Major companies such as Quaker Foods, Amazon and Proctor & Gamble have logistics facilities in the DFW area. Kimberly-Clark is expected to build an 870,000-square-foot regional distribution center in southwest Dallas, and Amazon and Wal-Mart are reportedly looking for more warehouse space in the area to accommodate Internet sales growth.
The Windy City’s proximity to Lake Michigan and the Chicago and Calumet rivers give it easy access to a network of inland waterways, and access to world markets via the Great Lakes and St. Lawrence Seaway, according to Supply Chain Digital. It has the third-largest intermodal port in the world after Hong Kong and Singapore.
The Chicagoland region has six interstate highways that connect both east and west for 2,000 miles, according to Logistics List. The city is within a day’s drive of 70 percent of the country’s population.
Chicago has two highly trafficked airports: Midway International and O’Hare International —the third busiest in the world — both provide freight service worldwide. In terms of rail transport, Chicago is home to six of the seven major railroads and more than 50 railroads total, accounting for a quarter of all rail traffic in the nation, says Logistics List.
The Garden State is home to the largest port on the East Coast: the Port of New York and New Jersey. The port is the gateway for products that are shipped to more than 21 million consumers in the region, and more than 100 million that are within a day’s reach, according to the Port Authority of New York & New Jersey.
New Jersey’s land transportation network includes 39,000 miles of public roadways that carry 500,000 truckloads of freight daily, according to the New Jersey Department of Labor & Workforce Development. And its proximity to New York City and Philadelphia means it is less than a day’s drive to 40 percent of the U.S. population.
New Jersey has extensive airlift, with more 25 percent of all air cargo in the U.S. moving through the state’s three main airports: Atlantic City International, Trenton-Mercer, and Newark Liberty International, which is a major cargo hub as well as a hub to United Airlines.
The New York/New Jersey port region is served by three Class I railroads: Canadian-Pacific, CSX International and Norfolk Southern.
Harrisburg is the county seat and the largest city in Dauphin County, a major distribution hub for many companies servicing the east coast’s top metropolitan markets, according to the Dauphin County Economic Development Corporation.
Harrisburg is part of what economists call the “mega-region,” which stretches from Boston to Washington along the east coast and also includes New York City, Philadelphia and Baltimore.
Major domestic and international markets, 40 percent of the U.S. population, and more than 60 percent of Canada’s population are within a 500-mile radius of the region, according to the Pennsylvania Department of Community & Economic Development. The area includes an extensive intermodal transportation system of highways, railroads, ports and airports.
The region includes Harrisburg International Airport, a well-developed highway system, and an intermodal terminal for double stack rail freight.
Linking Harrisburg to Philadelphia is a 105-mile stretch of high-speed passenger railway operated by Amtrak. Two Class 1 railroads (CSX and Norfolk Southern ) serve the area and connect directly to ports in Greater Philadelphia.
The area offers large parcels of vacant land for logistics and distribution facilities as well as easy access to New York City and Washington, D.C. Interstate highways run north-south (I-95, the Delaware and New Jersey Turnpikes) and east-west (I-76/Pennsylvania Turnpike), according to the Greater Philadelphia Chamber of Commerce. By air, Philadelphia International Airport moves more than a ton of cargo per year, and it is home to UPS’ second-busiest hub.
Atlanta is one of the few American cities served by three major interstate highways – 20, 75 and 85, making it a natural hub for trucking, says Supply Chain Digital.
In terms of passenger traffic, Hartfield-Jackson is the world’s busiest airport. It also is a major cargo transportation center and offers direct air cargo with China. UPS, the world’s largest package delivery service, has headquarters in Atlanta.
Atlanta is home to more than 75 Class A scheduled motor carriers, as well as more than 2,000 commodity carriers, contract haulers, and irregular intrastate route carriers, according to Logistics List. The city also is a major rail transportation center. Norfolk Southern operates two intermodal facilities in the metro area.