Construction of intermodal facilities in the American heartland grew in the second quarter, as merchandise continued to flow through the U.S. ports and into the hands of consumers living in the country’s breadbasket, while retailers trying to establish same-day delivery services added warehouses in all the major markets.
E-commerce, the main driver of the sustained growth in the U.S. industrial market, relies heavily on the nation’s intermodal system to get shipments into the interior of the country. Intermodal growth was up 4.5 percent in the second quarter compared to one year prior, according to the Intermodal Association of North America. The big needle move was from international shipments, which increased 6.8 percent since the port strike in the beginning of this year. Compared to June 2014, international shipments increased 8.9 percent.
As the supply chains get shorter, more intermodal hubs are springing up around the country. Here is a list of the top five intermodal markets that are set to service the interior of the country:
1. Kansas City, Mo.
Kansas City has the newest and most modern intermodal facility in the country with City Southern Railroad. The BNSF Intermodal and Logistics Park Kansas City opened in late 2013 in Edgerton, Kan., serving as the main hub between the ports of Los Angeles/Long Beach and Chicago. Jack Rosenberg, national director of the logistics and transportation division with real estate services firm Colliers International, says a Kansas City Southern rail line that runs directly into Mexico’s main regions has been getting a lot of traction as a new inland port.
Rich Thompson, global head of supply chain consulting with JLL, says the 1.5-million lift capacity in Edgerton will attract 100 million sq. ft. of new industrial development within a 350-mile radius of the inland port, and 60 million sq. ft. of that will be constructed within the Kansas City area.
“For companies looking to serve 80 percent of the population in two days’ transit time, and seeking multi-modal transportation options, Kansas City is a great distribution choice,” Thompson says. “It is located at the crossroads of four major interstate highways, I-35, I-70, I-29, and I-49, has direct rail and intermodal rail options via the BNSF and a highly skilled workforce. All are important considerations in today’s supply chains.”
2. Memphis, Tenn.
The home of FedEx has enjoyed much attention in the past 10 years, as e-commerce demand grew. Thompson says Memphis is also an emerging logistics hub, with Class I rail lines, North America’s busiest cargo airport, seven highways, a Mississippi River port and proximity to major Midwest and East Coast markets. Canadian National recently expanded its Memphis intermodal facility, with plans for the adjoining 800-acre CN Memphis RidgePort Logistics Center capable of accommodating 6 million square feet of space. Real estate developers are hoping that Norfolk Southern’s Memphis-Rossville intermodal facility, which opened in 2012, could translate into the construction of up to 15 million sq. ft., Thompson says.
Jason Tolliver, vice president with real estate services firm DTZ, says Indianapolis is not only performing well as an intermodal hub, it’s in the top 20 markets for growth. Thompson agrees, pointing to the market’s affordable real estate and labor options, and direct rail connections to both Chicago and Canada, while also providing an alternative to Joliet, Illinois’ inland port, which can get congested during peak shipping months. Earlier this year, the Halfwassen Group took control of the planned 200-acre Inland Logistics Port logistics property that will be served by CSX. “Indianapolis is a popular distribution location when looking for larger land sites and big, skilled labor pools required to operate today’s huge e-commerce facilities,” Thompson says.
4. Columbus, Ohio
The Rickenbacker Intermodal Terminal is serviced by Northern Southern and CSX, can handle 28 million sq. ft. of industrial development and has a U.S. Foreign Trade Zone designation. Norfolk Southern Corp. and the Columbus Regional Airport Authority have reportedly applied for federal funding for a $34 million expansion of the terminal that would increase the lift capacity to 300,000 annually.
5. Dallas/Ft. Worth
The South Central and Southeast intermodal regions saw strong international shipping growth surpass industry averages, according to the IANA. Kansas City Southern recently opened a $64 million intermodal terminal in Wylie, Texas, about an hour northeast of Dallas, to increase the company’s capacity for domestic and cross-border shipments to and from Mexico. The region already offers rail connectivity to Chicago and Southern California, and has more than 11.7 million sq. ft. now under development, with an additional 23 million sq. ft. planned by 2017.