The two-year-old, 2,000-acre Logistics Park Chicago is the model; AllianceTexas is right on its heels in offloading volume and size with more than 1,600 acres banked for development. And the latest initiative in Fontana, CA is a 38-acre example of how to meet demands of the 21st Century when developable land is not as abundant as it is elsewhere.
Vann Cunningham, BNSF assistant vice president of economic development, tells GlobeSt.com that Phoenix and Memphis are strong candidates for logistics park development in 2006 and this year will bring an announcement about Stockton, CA, where 800 acres are being primed for development. He says the Fort Worth-based BNSF's docket has five parks likely to rise in the next decade, all west of the Mississippi River. The multiple-mode shipping facilities cost $200 million to $300 million apiece to develop.
BNSF, like its competitors, is laying down plans to stay ahead of a global economy favoring offshore manufacturing and backfilling the stateside gap with logistics and warehousing space as imported parts head to US assembly lines and then pass as finished products to the nation's consumers. "The international import growth is the underlying factor driving these changes," Cunningham says. "The demand for rail-related real estate in the last three years has taken off like something not seen in 25 years."
Aside from the import appetite, the development of logistics parks is gaining momentum with the decline of long-haul, tractor-trailer drivers and rise of gasoline and diesel prices. Cunningham says the winning mix marries rail and road, and air and water if they're readily available. "Rather than think of truck and rail as competing alternatives," he says, "we should think of them as being integrated opportunities." The buzzwords these days are "transload" and "intermodal," a blueprint for a transportation infrastructure with expediency and efficiency to save time and cost in getting products to market. Industry experts say transportation accounts for about 60% of total distribution costs.
"I see transportation as the key to the continued economy of the US," Cunningham says, "and logistics parks are one important element. Logistics parks are part of a broad development strategy that is centered on the supply chain, logistics and transportation." He says BNSF's roadmap includes increasing the number of short-line partnerships to extend its reach.
Cunningham says the biggest hurdle in the logistics park plan is finding 500 to 1,000 acres for development and drumming up capital from public-private partnerships to get the parks on line. BNSF's tact calls for picking up development partners in each location: Hillwood in Fort Worth, CenterPoint Properties in Chicago, Catellus Development and ProLogis in its California ports.
According to the BNSF team, railway demand last year equaled three years of historical growth along its 32,000 route miles in 28 states and two Canadian provinces. Every business segment showed marked increases, with international or the transporting of products from ports up 16%. Last year, BNSF's economic development efforts helped to secure 144 new or expanded facilities in 15 states, representing more than $1.2 billion of investments by US companies and creating 3,350 jobs.
"It's the strongest rail growth in 40 years," Cunningham says. "All railroads are dedicated to investing in this. This is not something that's going to reverse in the foreseeable future."
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