Industrial

Carrying the Cargo

Intermodal transportation facilities spur industrial development in U.S. markets.

Bringing cargo through the Suez Canal to the East Coast may seem like the long way, but much of the U.S. logistics development today is an end-run around the growing congestion at the Los Angeles and Long Beach ports. While closest to China and other Pacific Rim countries that produce the majority of U.S. consumer goods, the West Coast ports often experience major delays. Port labor disputes and labor shortages in 2002 and 2004 brought many retailers and logistics companies to their knees, causing them to start planning for ways to avoid such shipping nightmares. Today “They look at how to redistribute and spread goods around to different ports to avoid problems,” says Brian S. Knowles, CCIM, principal of industrial services with Staubach’s REALogisitcs in Murray Hill, N.J.

Increased shipping into other ports has spurred warehouse and distribution development as well. Other West Coast ports, such as Vancouver, B.C., and Tacoma, Wash., have benefited, as well as Houston. As Pacific Rim ships steam though the Panama Canal to the Gulf Coast, Houston’s industrial vacancy rate has fallen to a five-year low. Nearly 2 million sf of W&D development is occurring, spurred by the opening of the new Baypoint container terminal. National retailers and developers are competing for land, sending prices 25 percent to 50 percent higher, according to Grubb & Ellis.

Other Ways to Go

While new port terminals are driving today’s W&D development, a future driver of industrial development is intermodal transportation hubs. To attract logistics companies and their clients, a number of U.S. cities are busy developing these facilities where containerized shipping units can be can be off-loaded from trucks to rail or vice versa. Some of these facilities also have air cargo and shipping modules as well. Cecil Commerce Center in Jacksonville, Fla., is one of these developments, says Walter Reed, CCIM, a principal with Commercial Florida Realty in Jacksonville. Along with the development of Jacksonville’s new deep water port, “there’s also about 15,000 acres of land at Cecil Commerce Center, an old air force base,” Reed says. “There is a private airport there with the longest runway in the state,” which is at the crossroads of three major interstate highways. To facilitate transportation access, “they are adding another bypass on the interstate that will go right to Cecil,” Reed says.

Such transportation convergence is attracting business. Bridgestone Firestone North American Tire is investing about $44 million in a 1 million-square-foot distribution center -- the first private development at Cecil Commerce Center. The facility should be completed by June of next year. Of Cecil’s 17,000 acres, about 4,800 are zoned for industrial use.

Located much farther north, adjacent to the Bismarck, N.D., airport is the Northern Plains Commerce Center operated by Mallory Alexander, a logistics company that partnered with the city of Bismarck to create the 243-acre facility that has air, shipping, truck, and rail access as well as warehousing and transloading facilities. This $10 million facility was ”fueled by Ingersoll Rand Co.’s shipping Bobcats to Singapore and Beijing,” says Skip Duemeland, CCIM, CEO of Duemelands Commercial LLLP in Bismarck. To keep Bobcat, a manufacturer of small industrial equipment, in the state, NPCC was born as a 300-acre industrial, distribution, and technology park. As NPCC completed its phase 1 development and rail line, it announced an agreement with United Pulse Trading to build a 90,000-sf facility for processing global agricultural products.

Bobcat constructed a $9.5 million manufacturing support facility nearby. “The business volume for Bobcat manufacturing is up by 38 percent according to the last report,” says Duemeland. “We have new truck distribution centers going up as well, and we have others in the planning stage. Growth has been in the area of 20 percent for volume of various shippers. This has fueled a 2 million-square-foot-expansion in retail in Bismarck with new firms coming to the market. We are excited about the future in Bismarck.”

Many small and secondary cities are discovering they have the transportation infrastructure to market themselves as inland port cities, which are defined as “sites located away from traditional land, air, and coastal borders that … process international trade through … multimodal transportation assets,” by the Texas Transportation Institute at the University of Texas. For example, begun as a freight airport, Alliance, Texas, has developed into a major distribution hub, which now has 140 companies, a free trade zone and customs facilities, as well as a 17,000-acre master planned residential community.