DC Velocity - March 2013

BY SUSAN K. LACEFIELD, ASSOCIATE EDITOR

REGIONAL HUBS AND SITE SELECTION SERIES

Emerging logistics hot spots:

The Midwest

They may not be on your radar yet, but these three Midwestern locations are hoping to become the next logistics mega-hubs.

IT USED TO BE THAT COMMUNITIES WERE LESS THAN EAGER TO SEE A DIStribution center locate within their borders. But these days, things have changed, according to John H. Boyd of the Boyd Co. Inc., a consulting firm that specializes in site selection. “Instead of ‘not in my backyard,’ communities are now courting DCs to come to their area,” he says.

That attitude adjustment stems partly from a realization that the types of jobs associated with a distribution center have changed, says Boyd. Chambers of commerce and economic development authorities have come to understand that DCs bring more than just low-paying manual labor jobs to the area; they also provide employment for technical and support personnel.

As a result, more and more regions are touting their strengths as centers of logistics activity. Massachusetts Institute of Technology professor Yossi Sheffi, who recently wrote a book on the subject, calls these hubs “logistics clusters,” which he defines as areas where many logistics activities take place in close proximity. According to Sheffi, in a logistics cluster, both logistics service providers and the logistics operations of manufacturers, retailers, and distributors congregate around a port, airport, rail facility, or a location close to major population centers.

This is the first in a series of articles looking at some of these emerging logistics clusters. While most logistics professionals are familiar with hubs like Memphis, Tenn.; California’s Inland Empire; and Columbus, Ohio, our series will look at locations that may not be on their radars yet. (For more on Ohio’s role as a logistics hub, see the article “High on Ohio” at www.dcvelocity.com.)

The first article in our series looks at three emerging logistics clusters in the Midwest: the bistate Kansas City area, St. Louis, and Will County, Ill.

KANSAS CITY

Kansas City has long been known as a transportation hub. That’s no surprise given that the city is crisscrossed by major highway, rail, air, and barge routes.

Now, the city is pushing to become known as a center of international trade as well. Located in the geographic center of North America, Kansas City is situated midway between Mexico and Canada. It has an aggressive foreign trade zone (FTZ) program and ranks first in the country in FTZ space, according to the development group KC SmartPort. It also has one of the largest U.S. Customs presences in the country in terms of fiscal clearance, says Chris Gutierrez, president of KC SmartPort.