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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
