Logistics activity in the southeastern United States is heating up—and not just in the traditional hot spot of Atlanta. Here are three more rising stars.
Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
When it comes to regions in the United States that offer growing logistics opportunities, the Southeast sits at the top of the list, says Richard Thompson, managing director at industrial real estate firm Jones Lang Lasalle Inc.
The reason for the region's appeal is no mystery, says Thompson. "First, it's an ideal spot in terms of freight costs," he says. The Southeast has an attractive population density, with 45 percent of the U.S. population living in the region. It also has a strong supply chain infrastructure with robust rail and highway connectivity and access to quality seaports like Miami; Savannah, Ga.; Charleston, S.C.; and Jacksonville, Fla., Thompson says.
Second, labor costs are relatively low because the Southeast is generally a nonunion region. And unlike other logistics hotspots, real estate in the Southeast is relatively abundant, according to Thompson.
"If you're looking for a 1,000-acre industrial site, you're not going to find that in [California's] Inland Empire, and you're not going to find that in Chicago or New York," says Thompson. "But you are going to find that in Tennessee, Alabama, Georgia, and other southeastern states."
In addition, state governments have worked to attract business by offering generous incentives to either start a company or relocate an existing enterprise.
The Atlanta metropolitan area has long been the region's main hub of logistics activity, and despite economic setbacks in the past decade due to downturns in the IT, telecom, and housing sectors, Atlanta's best days are still ahead of it, according to Thompson.
But there are other locations working hard to get on logistics professionals' radar screens. In this article, we highlight three: Central Florida, the Piedmont-Triad region of North Carolina, and Savannah.
CENTRAL FLORIDA
Not much gets made in Florida. The state is heavily tilted toward consumption because of its large retiree population. As a result, most of the goods moving through the state flow south, not north.
But that pronounced imbalance might reverse itself come 2015, when the widened and deepened Panama Canal opens. Two Florida ports, the Port of Miami and Port Manatee near Tampa, are the closest U.S. ports to the canal. Miami, in particular, is making a big push for cargo, vying for what it expects to be a larger share of waterborne commerce heading through the expanded canal to the East Coast.
Additionally, many companies are looking to South and Central America for growth opportunities, says John H. Boyd of the site selection consulting firm Boyd Co. Inc. Florida is a logical location for basing those trade operations.
Both of these trends are working to make Florida a more attractive location for logistics and distribution facilities—especially when combined with the fact that the state is, and will likely remain, a potent consuming force with a population of 19 million people.
Companies that are considering Florida for a distribution facility, however, may find themselves shying away from the coasts. Land prices around the ports can be steep, and coastal areas are at risk of flooding in the hurricane-prone state, says Boyd.
The central Florida communities of Orlando, Lakeland, and Ocala—to name a few—are more protected from these weather concerns. Central Florida also has plenty of land available at favorable prices as the local real estate market is still recovering from the downturn, according to Dave King, head of real estate operations for the real estate company STAG Industrial.
Many large companies are taking advantage of those opportunities. Grocery chain Publix, for example, recently cut the ribbon on a 1 million-square-foot distribution facility in Orlando. Furniture retailer Rooms To Go has opened a 2 million-square-foot facility in nearby Lakeland.
In addition to abundant property and a strong infrastructure, Central Florida also sets itself apart by means of a very business-friendly tax structure, says Sean Malott, manager of business development for the economic development organization Enterprise Florida. For example, Florida does not have a state income tax, and it doesn't impose property taxes on business inventories or goods-in-transit (or goods acquired and stored in a facility before being shipped elsewhere) for up to 180 days from the time of being acquired.
PIEDMONT-TRIAD, N.C.
The Piedmont-Triad region of North Carolina may not be a major metropolitan area, but it has an interstate highway system that most major cities would envy. The 12-county area, which includes Greensboro, High Point, and Winston-Salem, boasts five interstates: 1-73, 1-74, I-77, I-85, and I-40.
"The Triad area has one of the densest concentrations of interstates in the United States," says Charles Edwards, director of the North Carolina Center of Global Logistics. "There's Chicago, St. Louis, and a few other very large major metropolitan areas that have more interstate, but we don't have the congestion that those locations have."
Old Dominion Freight Line Inc., considered by many to be among the best-run trucking companies in the business, calls the region home. FedEx Corp.'s mid-Atlantic hub is also based in the Triad, and one of the company's largest ground hubs is located in Kernersville, N.C.
The region is served by CSX Corp. and by Norfolk Southern Corp., which has an intermodal terminal in Greensboro and a bulk transfer terminal in Winston-Salem. Companies that operate distribution facilities in the region include Ralph Lauren, Harris Teeter, Ashley Furniture, and the aviation firms Honda Aero and Timco Aviation Services.
Perhaps unsurprisingly, between 50,000 and 60,000 of the region's residents work in transportation and logistics, according to data from the local chapter of the World Trade Association. (The U.S. Census Bureau, which defines logistics jobs more narrowly, puts the number at 27,000.) "That makes the Triad one of the larger [logistics] centers in the world," says Edwards. "There are actually more people engaged in transportation and logistics in the Triad than in the Rotterdam area. Of course, we're a lot of smaller than Memphis or New Jersey or L.A./Long Beach, but we are not trying to be those areas."
SAVANNAH, GA.
The basis for Savannah's status as a hotbed of logistics activity is, in the words of Brandt Herndon of the Savannah Economic Development Authority, not man-made but "god-given." The Port of Savannah is the westernmost port on the Eastern Seaboard and is located within two days' drive of 80 percent of the nation's population.
Savannah and the state of Georgia, however, have done a lot of work enhancing that god-given asset. The Port of Savannah is the country's fastest-growing port as well as the fourth largest container port, and its Garden City Terminal is the largest single-terminal operation in the United States.
Savannah's strengths include its transportation connections and land availability. "Because the port is located upriver, inland from the Savannah historic district, the port was able to develop great highway and rail connectivity, and the land available is second to none," says Curtis Foltz, executive director of the Georgia Ports Authority.
Savannah and the port can be accessed via both I-95 and I-16 as well as by the Norfolk Southern and CSX. The Mason Intermodal Container Facility, which is in the process of being expanded, is actually located on terminal. "Which is unusual for a port," says Herndon.
According to Herndon, there are more than 100 warehouses and distribution centers located near Savannah, including facilities run by such companies as Home Depot, Lowe's, Ikea, and Dollar Tree. In the 1990s as the port grew, the community became concerned about a possible shortage of warehouse and distribution space. That led to the construction of the 1,600-acre Crossroads Distribution Center a short distance from the Garden City Terminal.
Other large-scale industrial distribution facilities have followed. For example, there's the RiverPort Business Park, which contains 1,400 acres of warehousing, distribution, and light industrial space located six miles from the port. There's also the 904-acre Belfast Commerce Centre, which is located 20 miles from Savannah and has direct rail connections to the port.
But when it finally comes down to persuading companies to locate in Savannah, Herndon says the tipping point is often the city's quality of life. As a historic site with 12 million visitors a year, Savannah is able to support restaurants and cultural events that many cities its size can't. "When they're being shown the area, many prospective companies ask us to give them 15 minutes to an hour to see the downtown area," he says. "They love the history and the oak trees; it's an easy sell."
For more information ...
Want to learn more about the logistics hot spots mentioned in this article? Here's where to find more information:
Central Florida
Enterprise Florida Inc.: Enterprise Florida, a public-private partnership formed to promote the state's economic development, devotes a whole section of its website to logistics and distribution. The site includes extensive information about the state's logistics and distribution opportunities, infrastructure, and employment and wage picture.
Lakeland Economic Development Council: This organization focuses on the area around Lakeland, Fla. Its website contains information about available warehouse space, major employers, and area demographics.
Piedmont Triad, N.C.
Greensboro Economic Development Alliance: This organization is focused on the city of Greensboro and surrounding Guilford County. It offers information about the area's infrastructure, supply chain and logistics employers, and training programs.
Piedmont Triad Partnership: This private nonprofit economic development organization focuses on the Piedmont Triad region of North Carolina. Its website offers information about the area's logistics infrastructure and wages, as well as the state's training programs.
Savannah, Ga.
Georgia Ports Authority: The GPA, which serves as the administrative agency for the ports of Savannah and Brunswick, includes detailed information on its website about the Port of Savannah's two terminals, Garden City Terminal and Ocean Terminal. The site also includes highway mileage charts, interstate and rail data, and operating information.
Savannah Economic Development Authority: This organization provides site selection services for the Savannah area. Its website contains extensive information and resources, including a property database and data on the area's transportation infrastructure, taxes and incentives, and major distribution employers.
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Economic activity in the logistics industry continued its expansion streak in October, growing for the 11th straight month and reaching its highest level in two years, according to the most recent Logistics Managers’ Index report (LMI), released this week.
The LMI registered 58.9, up from 58.6 in September, and continued a run of moderate growth that began late in 2023. The LMI is a monthly measure of business activity across warehousing and transportation markets. A reading above 50 indicates expansion, and a reading below 50 indicates contraction.
October’s reading showed the fastest rate of expansion in the overall index since September of 2022, when the index hit 61.4. The results show that the industry is continuing its steady recovery from the volatility and sluggish freight market conditions that plagued the sector just after the Covid-19 pandemic, according to the LMI researchers.
“The big takeaway is that we’re continuing the slow, steady recovery,” said LMI researcher Zac Rogers, associate professor of supply chain management at Colorado State University. “I think, ultimately, it’s better to have the slow and steady recovery because it is more sustainable.”
All eight of the LMI’s indices grew during the month, with the Transportation Prices index showing the most growth, at nearly 6 points higher than September, reflecting increased activity across transportation markets. Transportation capacity expanded slightly during the month, remaining just above the 50-point threshold. Rogers said more capacity will enter the market if prices continue to rise, citing idle capacity across the market due to overbuilding during the pandemic years.
“Normally we don’t have this much slack in the market,” he said. “We overbuilt in 2021, so there’s more slack available to soak up this additional demand.”
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.
Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.
“The Canadian port strike is a microcosm of many of the issues that are impacting Western economies today; protection against automation, better work-life balance, and a cost-of-living crisis,” Russell Group Managing Director Suki Basi said in a release. “Taken together, these pressures are creating a cocktail of connected risk for countries, business, individuals and entire sectors such as marine insurance, which help to mitigate cargo exposures.”
The strike is also sending ripples through neighboring U.S. ports, which are hustling to absorb the diverted cargo, according to David Kamran, assistant vice president for Moody’s Ratings.
“The recurrence of strikes at Canadian seaports is positive for U.S. ports that may gain cargo throughput, depending on the strike duration,” Kamran said in a statement. “The current dispute at Vancouver is another example of the resistance of port unions to automation and the social risk involved with implementing these technologies. Persistent disruption in Canadian port access would strengthen the competitive position of US West Coast ports over the medium-term, as shippers seek to diversify cargo away from unreliable gateways.”
The strike is also affected rail movements, according to ocean cargo carrier Maersk. CN has stopped all international intermodal shipments bound for the west coast ports of Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. And CPKC has stopped acceptance of all export loads and pre-billed empties destined for Vancouver ports.
Connected with the turmoil, Maersk has suspended its import and export carrier demurrage and detention clock for most affected operations. The ultimate duration of the strike is unknown, but the situation is “rapidly evolving” as talks continue between the Longshore Workers Union (ILWU 514) and the British Columbia Maritime Employers Association (BCMEA), Maersk said.
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."