46 DC VELOCITY FEBRUARY 2014 www.dcvelocity.com
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which opened in January 2012. The
centers represent the company’s
largest U.S. supply chain operation,
serving 345 stores in 13 states.
SPACE NEAR THEM THAR RAILS!
Welcome to the next logistics land
rush. As demand increases for
intermodal transportation—total
third-quarter 2013 traffic rose
4. 7 percent from the 2012 peri-
od, according to the Intermodal
Association of North America—
businesses are taking a hard look
at locating or relocating their DCs
near intermodal yards. Of the 225
million square feet of DC space
under development in the U.S.,
about one-third is at or close to
an intermodal facility, according
to John H. Boyd, head of The Boyd
Co. Inc., a site selection firm in
Princeton, N.J. Boyd said that is
about twice the ratio of several years
ago, though he didn’t have hard
numbers to support the estimate.
Boyd said among the factors driving property demand near intermodal yards are Canadian companies searching for bargains in U.S.
real estate and e-commerce players
like Amazon.com, which operates a
DC in Tracy, Calif., close to a line
served by the Burlington Northern
Santa Fe Railway (BNSF). Another
is the rail industry’s success in promoting intermodal’s environmental
virtues, an approach that Boyd said
has been successful with his firm’s
clients.
According to a soon-to-be-com-
pleted study by Chicago-based real
estate services and logistics firm
Jones Lang LaSalle, the six Class I
railroads—BNSF, UP, CSX Corp.,
Norfolk Southern Corp., and
the U.S. operations of Canadian
National Inc. and Canadian Pacific
Corp.—operate 164 intermod-
al facilities in the U.S. and 19 in
Canada. The study, which will quantify the
growth of distribution centers and other
real estate attributable to intermodal facili-
ties, is to be published in early 2014.
In eastern Pennsylvania’s Lehigh Valley;
the Kansas City suburb of Edgarton, Kan.;
Joliet and Elwood, Ill.—the latter being
home to a BNSF intermodal yard where
Wal-Mart Stores Inc. has two DCs totaling
3. 4 million square feet—the Dallas/Fort
Worth Metroplex; Memphis, Tenn.; and
the “Inland Empire” east of Los Angeles,
land is being snapped up for intermodal development. In the Lehigh Valley, a
straight rail shot to and from New Jersey’s
Port of Elizabeth and a gateway to the
densely populated New York, New Jersey,
and Philadelphia metro areas, there are 45
million square feet of industrial property
within 15 miles of a Norfolk Southern intermodal yard, according to Jake Terkanian,
Wayne, Pa.-based vice president of development giant CBRE’s Global Industrial
Services Group. Of that acreage, only 5
percent sits vacant, Terkanian said.
In Bethlehem, Pa., on the Lehigh Valley’s
eastern side, Wal-Mart has two buildings,
totaling 2. 4 million square feet, that are so
close to the tracks that trucks can shuttle
boxes on a private road without ever treading on public infrastructure, Terkanian
said.
In Edgarton, about 25 miles southwest
of Kansas City, where BNSF opened an
intermodal facility on Oct. 17, there are 20
million square feet of land either developed
and occupied, in the process of development, or available for occupancy, according to Chris J.F. Gutierrez, president of
KC SmartPort, a nonprofit economic and
logistics development organization. Today,
Demdaco, a maker of gift and home décor
products, occupies a 326,000-square-foot
DC next to the yard. A 500,000-square-foot
facility will be ready for occupancy this
