DC Velocity - February 2014

BY MARK B. SOLOMON, SENIOR EDITOR

RAIL/INTERMODAL

transportationreport

THE LEGENDARY ILLINOIS SENATOR EVERETT McKinley Dirksen famously quipped that “a billion here, a billion there, pretty soon you’re talking real money.” The Home Depot Inc., which was poised to crack the $80 billion annual sales mark in its 2013 fiscal year that ended in January, knows of what Dirksen spoke.

At the Atlanta-based home improvement retail-
er, the law of large numbers almost decrees that
any operating efficiencies, no matter how trivial
they seem on the surface, will yield big savings. So
when the company in September relocated opera-
tions from two stocking distribution centers (SDCs)
near Interstate 55 about 25 miles south of Chicago
to a single 1. 6 million-square-foot facility adjacent to
Union Pacific Railroad Co.’s (UP) intermodal facility
in Joliet, Ill., about 40 miles southwest of the city, it
raised nary an eyebrow in the mainstream world. But
for a huge intermodal user like Home Depot, the abil-
ity to avoid the cost of draying products between the
highway locales and UP’s lines was no small matter.

Home Depot would not disclose container volumes or specific cost savings. Michael Murphy, chief development officer for CenterPoint Properties, a Chicago-based industrial property developer active in the intermodal arena, estimates the typical dray move costs between $125 and $150. Multiply that by a hypothetical number of 100,000 twenty-foot-equiv-alent containers a year, and the annual dray savings alone hit $12.5 million or higher. That figure doesn’t include other synergies that come with a large user’s being a three-iron golf shot or so away from the train and the boxes on or in it. Murphy said he had no concrete numbers on Home Depot’s activity.