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Longer lasting Belts, New Split Spools -- no regrind:Layout 1 8/26/2009 4: 37 AM Page 1
month, and dirt has been turned on two
more parcels of 600,000 and 400,000 square
feet, respectively, according to Gutierrez.
In Fairburn, Ga., 25 miles south of
Atlanta, 5 million square feet of DC space
has, over the past 14 years, been erected
near a CSX intermodal terminal. That is
a far cry from the 1990s when the DC
operation consisted of two or three buildings clustered around an interchange off
Interstate 85, according to Carl Warren,
director, integration project planning
for CSX Intermodal Terminals, a unit of
Jacksonville, Fla.-based CSX.
TRADE-OFFS WORTH THE RISK
For intermodal users, there’s a trade-off
in making a DC investment at or near a
yard. Because of the increased demand
for space, the cost of land near an intermodal facility can be anywhere from 10
to 20 percent higher than a comparable
facility elsewhere. On paper, however, the
numbers seem to support the sacrifice.
Transportation accounts for 40 to 50 percent of a company’s supply chain costs. By
contrast, real estate clocks in at between 4
and 5 percent. The cost of a dray can run as
high as $1.75 a mile. A user who negotiated
a good deal on the land will find those savings eaten up quickly with each mile they
are away from the yard.
The tipping point comes in the volume
projections. Cozying up to an intermodal
yard makes sense if a DC is handling at
least 1,000 40-foot-equivalent-unit containers a year, said Murphy of CenterPoint.
Anything above that volume threshold
becomes gravy; anything below that may
not work, Murphy said. The strategy is
“not a value proposition for everyone,” he
said.
Experts caution that factors such as a
trained and motivated labor force, a tolerable taxing climate, and economic incentives need to align with the transportation
benefits when selecting a site. “Sometimes
we have to hold back our clients from
making a decision” to locate a DC near an
intermodal yard based solely on transport
considerations, said Tim Feemster, a longtime real estate and logistics executive and
now head of a Dallas-based company bearing his name.
Terkanian of CBRE said proximity to an
intermodal facility is not the engine
of a typical customer’s site selec-
tion strategy. “We don’t have clients
telling us they have to be near an
intermodal yard,” he said.
One unsurprising roadblock to
locating at an intermodal yard lies
in the long-standing organizational
divide between a company’s real
estate and supply chain operations.
Supply chain folks say the real estate
side is more interested in closing a
land deal at the best possible price
than in taking the operation’s holistic costs into account. The chasm
is widened by the growth of intermodal itself, which is a recent phenomenon and whose implications
might not yet be understood by real
estate professionals accustomed to
working with on-highway facilities.
Logistics experts are split on this
issue. Feemster said that “inter-
modal is a concept [real estate bro-
kers] don’t understand and [that]
According to Boyd, industrial real
estate powerhouses are catching on
to the value of intermodal, and,
perhaps more importantly, its stay-
ing power. “The national firms are
going to develop dedicated inter-
modal units,” he said. “They are
playing catch-up, but they will catch
up.” N
