LOGISTICS NETWORK DESIGN
strategicinsight
The new
dynamics
of site selection
It’s no longer all about the rent. When shippers evaluate DC sites
these days, their number one concern is transportation.
THE CENTERPOINT INTERMODAL CENTER IN JOLIET, ILL., FACES FIERCE COMPETItion for distribution center business, but it has an edge that’s proving tough to beat. And it’s
not shy about promoting it. Visit the center’s website and you’ll find a calculator that shows
customers what they could save in drayage costs by locating a DC at the 2,500-acre industrial
development, which boasts on-site access to Burlington Northern Santa Fe’s Logistics
Park–Chicago.
A drayage calculator might not sound like a killer marketing tool. Yet that’s precisely the kind
of sales tool CenterPoint has used to attract high-profile tenants like Wal-Mart and Georgia
Pacific.
To understand why drayage costs would carry so much weight with customers, you have to
know a little bit about the new dynamics of DC site selection. The days when companies chose
DC sites largely on the basis of cost per square foot are long gone. Today, transportation costs
will likely be the principal driver when a company goes to pick a site within its target region.
Small wonder developers like CenterPoint are anxious to promote their properties’ transportation advantages.
That’s not to say industrial developers haven’t played the logistics card in the past. Leasing
companies and developers have long touted access to markets and transportation infrastructure in their marketing pitches. Many industrial developments, like the Rickenbacker Global
Logistics Park, part of the Rickenbacker Inland Port in Columbus, Ohio, focus specifically on
their potential logistics advantages in their marketing. (The Rickenbacker Inland Port even
publishes an online newsletter called “Logistically Speaking” that highlights the development’s
