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Interaction with transportation networks Besides proximity and access to customers and markets, a freight facility needs to efficiently connect to the transportation network. Depending on the facility type and the markets to be served, access to more than one mode of transportation may be required. Companies looking for locations will know what their transportation needs are along with the expected costs. Communities that successfully attract freight facilities are able to efficiently connect points of production or ports of entry to consumers. Freight facilities are located near key transportation channels such as: Communities that successfully · Areas or sites on major highways. attract freight facilities are able · Areas where multiple interstate highways converge. to efficiently connect points of · Railroad terminals at the edges of their network or at key production or ports of entry to consumption markets. consumers. · Major sea and airports. However, a site might be set in precisely the right position in the transportation network, but site or community issues can prevent or inhibit effective use of the site. Distribution centers usually need to ... site or community issues can operate on a 24-hour basis, yet a community may have regulations prevent or inhibit the effective use that restrict hours of operation or prohibit truck traffic on a of the site. strategically located route. Decisions about what mode to use for goods movement are unique to each shipper, receiver, and carrier but generally reflect direct transportation costs, reliability, and travel time. These factors can vary greatly by mode and region depending on transportation infrastructure, available freight carriers, size of the market, and quality of freight service. Freight Facility Location Selection: A Guide for Public Officials 43
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How goods and materials are transported will vary widely depending on the type of company and the goods being shipped, but can include the following: Road and Truck Full-load and long-haul trucking require quick access to major highways. Additional time on local roads, with delays due to local congestion and traffic signals, adds to logistics costs and operational difficulties and may increase conflict with local communities. A site within ¼ mile of a highway and with no traffic signals will represent a significant annual logistics cost savings when compared to a site two miles from a highway. Similarly, the less impeded the access to a major artery and the better its connection to the metropolitan network, the better. Companies also consider whether the roads they will use have tolls. Tolls represent additional cost both in terms of direct fees and lost time on the road and can impact overall cost of operations. Case Study The Family Dollar distribution center in Marianna, Florida, is serviced entirely by trucks for both inbound and outbound goods. As a result, Interstate highway access was a critical aspect of siting this facility. The facility provides a direct three-lane access road to an existing interchange on Interstate 10. Route 276 runs through the site, providing a north- south connection. Based on the local traffic experiences of some of their other distribution center facilities (such as Charlotte, NC), Family Dollar learned that a direct ramp to the Interstate can be a large benefit by eliminating local traffic concerns. 44 Freight Facility Location Selection: A Guide for Public Officials
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Rail Companies shipping bulk products or large volumes of goods over longer distances may choose to do so via rail. Increasingly, this also includes products shipped by intermodal container. The use of rail varies regionally as the shipping distance preferred by railways is somewhat shorter in the eastern United States than in the west, due to fewer miles between cities. Yet access to rail in the eastern United States can still play an important role in site selection. Railroads seek to collect shipments at points on their network that will allow for efficient use of their equipment and infrastructure. As a result, they will typically not allow unrestricted access at all points on the network, but will instead encourage complementary uses at key nodes to allow for more efficient use. For example, a company shipping consumer goods to the Pacific Northwest may attempt to co- run 60-foot boxcars with a lumber company, reload these cars with paper at the destination, and ship this back to the original site. Rail is also a natural solution in supply chains that combine a West Coast port of entry and East Coast consumption zones. Access to the rail network is concentrated at terminal facilities. Terminal facilities themselves are located at key origin and destination points for freight and are constructed with the capability to move bulk freight, intermodal containers, liquids, and/or other materials between mainline rail and other forms of transportation. While the majority of freight in These terminals are designed to allow for the most efficient interface the US is moved by truck today, with mainline rail. Such a facility might require a minimum volume access to rail is becoming more of 150,000 to 200,000 lifts annually to approach financial and of a consideration as fuel prices operating feasibility. As a result, railroads attempt to encourage the rise. co-location of rail-based freight users at interchange points to both maximize efficiency and to generate critical freight mass. While the majority of freight in the United States is moved by truck today, access to rail is becoming more of a consideration as fuel prices rise. Freight Facility Location Selection: A Guide for Public Officials 45
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Case Study Access to a Class I railroad was considered the most important consideration in site selection by Savage Safe Handling, Inc., a full-service, bulk product transportation and chemical transloading/processing company that operates the largest rail-to-truck bulk transloading facilities in New England (Auburn, ME) and western Pennsylvania (New Stanton). In part, this decision to locate next to rail reflected the company's preference for fuel-efficient transportation and its interest in keeping transportation Photo by Savage Safe Handling, Inc. costs down. Case Study A corporate decision was made in the 1980s by Murphy Warehouses of the Minneapolis- St. Paul, MN, region to obtain and preserve facilities with rail connections. The company believes intermodal access to be a competitive advantage. Consequently, rail has become a locating requirement for facilities. Each of their six rail-served facilities is served by Class I railroads including: BNSF Railway, Canadian National (CN) Railways, Union Pacific (UP) Railroad, and Canadian Pacific (CP) Railways. Rail facilities can accommodate up to 18 rail cars indoors at a single facility. Smaller facilities can house 12, six, or four rail cars indoors, with the remaining two rail facilities operating outdoors. 46 Freight Facility Location Selection: A Guide for Public Officials
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Water High bulk goods, liquids, and containers moving internationally require water access. Ports must provide the infrastructure to load and unload shipping and have the ability to transfer freight to other modes of transport. Additionally, the facility will likely require space for sorting, storing, and assembling shipments, and may also require customs and safety screening for international shipments. Air Freight carrier requirements for air transportation only truly come into play in site selection when high-value, quick response, low bulk items are considered. Medical devices, some biotech products, and some electronics are good candidates for air shipping. Air transport can also be a back-up access to high speed transportation for companies carrying very low inventories. Interestingly, however, many freight users will include proximity to a hub airport as an evaluation criterion for freight facilities. While the company may not ship anything by air, it may still require air access to accommodate company management or partners who wish to visit the facility. There may not be specific discussions with airports during the site selection process, but the company may investigate the carriers using the airport and examine how active the facilities are. Third-Party Shippers Instead of co-locating or locating near specific freight infrastructure, some freight businesses will rely upon and perhaps locate near third- party shippers or third-party logistics (3PL) companies. For example, large retailers who ship most of their own merchandise through their distribution centers may also rely upon commercial carriers such as FedEx or UPS to ship small packages, such as jewelry, directly from central distribution to their stores. Freight Facility Location Selection: A Guide for Public Officials 47