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From page 39... ... Proximity and/or access to markets, especially supply chain networks, is the single most important factor in determining the location of a freight facility. most of the other site selection factors are used to refine the site selection process to specific, sometimes competing, sites. Read the entire page →
From page 40... ... Freight Facility Location Selection: A Guide for Public Officials40 Ability to access key markets or customers Freightfacilitiesexisttofacilitatetheprocessingandmovementof goodsfromanorigintoadestination.Thepointoforiginmaybea sourceforrawmaterials,amanufacturingplant,oranintermediate point.Thedestinationmaybetheultimateconsumer,amanufacturing plant,orastagingpointalongtheway.Regardless,freightfacilities typicallychooselocationsthatallowthemtomostdirectlyand efficientlyaccesstheseoriginanddestinationpoints. Accessisexpectedtoaccomplishtwothings:1) deliveryservicewith speed, predictability, and precision that matches or exceeds the competitivestandardsinthemarketand2) Read the entire page →
From page 41... ... Freight Facility Location Selection: A Guide for Public Officials 41 Theabilitytoserviceaparticularcustomerwithinaone-daydrive is a common service expectation and location consideration. This requiresbothphysicalproximitytothecustomerandalocationwithin the transportation network which permits ready movement to the customer'sfacilities.Foracityterminalbeingoperatedforpickup and delivery by a truck fleet, customer proximity is substantially shorterand thedensityof customers in the regiongreater. These facilitiesaresituatedtominimizetotalmileswithinafew-hourservice radiusandrequireaninvestmentintrucksaswellasterminals. Intermodalfacilitiesandrailfreightterminalsarealsolocatednear majorconsumptionzonesbut,duetotheirsizeandneedforaccess tomultiple customers, tend tobe locatedat theoutskirtsofmajor metropolitanareas.Additionally,thesefacilitiesneedtobelocated atpointswheretheycangeneratelargeloadsoffreightforlongdistanceshipping. For example, a rail freight terminal can require almost 100,000 carloadsannually travellingat least2,000miles tobefinancially viable.Onlythecombinationofvolumeanddistanceprovides the competitiveadvantageover othermodes. Intermodal facilities servicingcontainersandtrucktrailershavesimilarrequirements.In suchcases,thecarrierwillattempttobenearamarketthateither generates this volume or where they can collect freight from a relativelyshortdistancetocreatethevolumerequired. Read the entire page →
From page 42... ... Thus, a search for a new, larger location was undertaken, and nS selected the Rickenbacker site. A Class I railroad is a major railroad with annual carrier operating revenues of $250 million or more. Read the entire page →
From page 43... ... However, a sitemight be set in precisely the right position in the transportationnetwork,butsiteorcommunityissuescanpreventor inhibiteffectiveuseof thesite.Distributioncentersusuallyneedto operateona24-hourbasis,yetacommunitymayhaveregulations that restrict hours of operation or prohibit truck traffic on a strategically located route. Decisions aboutwhatmode to use for goodsmovementareuniquetoeachshipper, receiver,andcarrier butgenerallyreflectdirecttransportationcosts,reliability,andtravel time.Thesefactorscanvary greatlybymodeandregion depending on transportation infrastructure,availablefreight carriers,sizeofthemarket, andqualityoffreightservice. Communities that successfully attract freight facilities are able to efficiently connect points of production or ports of entry to consumers. Read the entire page →
From page 44... ... Freight Facility Location Selection: A Guide for Public Officials44 How goods and materials are transported will vary widely dependingonthetypeofcompanyandthegoodsbeingshipped, butcanincludethefollowing: Road and Truck Full-load and long-haul trucking require quick access to major highways.Additionaltimeonlocalroads,withdelaysduetolocal congestionandtrafficsignals,addstologisticscostsandoperational difficultiesandmayincreaseconflictwithlocalcommunities.Asite within¼mileofahighwayandwithnotrafficsignalswillrepresent asignificantannual logisticscost savingswhencomparedtoasite twomiles fromahighway. Similarly, the less impeded theaccess toamajorarteryandthebetteritsconnectiontothemetropolitan network,thebetter.Companiesalsoconsiderwhethertheroadsthey willusehavetolls. Tollsrepresentadditionalcostbothintermsof directfeesandlosttimeontheroadandcanimpactoverallcostof operations. 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. Read the entire page →
From page 45... ... Freight Facility Location Selection: A Guide for Public Officials 45 Rail Companiesshippingbulkproductsorlargevolumesofgoodsover longerdistancesmaychoosetodosoviarail.Increasingly,thisalso includesproductsshippedbyintermodalcontainer.Theuseofrail variesregionallyastheshippingdistancepreferredbyrailwaysis somewhatshorterintheeasternUnitedStatesthaninthewest,due tofewermilesbetweencities.YetaccesstorailintheeasternUnited Statescanstillplayanimportantroleinsiteselection. Railroads seek to collect shipmentsatpointson their network that willallowforefficientuseoftheirequipmentandinfrastructure.As aresult,theywilltypicallynotallowunrestrictedaccessatallpoints onthenetwork,butwill insteadencouragecomplementaryusesat keynodestoallowformoreefficientuse.Forexample,acompany shippingconsumergoodstothePacificNorthwestmayattempttocorun60-footboxcarswithalumbercompany,reloadthesecarswith paperatthedestination,andshipthisbacktotheoriginalsite.Rail isalsoanaturalsolutioninsupplychainsthatcombineaWestCoast portofentryandEastCoastconsumptionzones. Access to the rail network is concentrated at terminal facilities. Terminalfacilitiesthemselvesarelocatedatkeyoriginanddestination points for freightandareconstructedwith thecapability tomove bulk freight, intermodalcontainers, liquids,and/orothermaterials betweenmainlinerailandotherformsoftransportation. Read the entire page →
From page 46... ... 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. Read the entire page →
From page 47... ... Freight Facility Location Selection: A Guide for Public Officials 47 Water High bulk goods, liquids, and containers moving internationally requirewateraccess.Portsmustprovidetheinfrastructuretoload andunloadshippingandhavetheabilitytotransferfreighttoother modesoftransport.Additionally,thefacilitywilllikelyrequirespace forsorting,storing,andassemblingshipments,andmayalsorequire customsandsafetyscreeningforinternationalshipments. Air Freightcarrierrequirementsforairtransportationonlytrulycomeinto playinsiteselectionwhenhigh-value,quickresponse,lowbulkitems areconsidered.Medicaldevices,somebiotechproducts,andsome electronicsaregoodcandidatesforairshipping.Airtransportcan alsobeaback-upaccesstohighspeedtransportationforcompanies carryingverylowinventories. Interestingly, however,many freight userswill include proximity to ahubairportasanevaluationcriterionforfreightfacilities.While the companymaynot shipanythingbyair, itmay still requireair accesstoaccommodatecompanymanagementorpartnerswhowish tovisitthefacility.Theremaynotbespecificdiscussionswithairports duringthesiteselectionprocess,butthecompanymayinvestigatethe carriersusingtheairportandexaminehowactivethefacilitiesare. Read the entire page →
From page 48... ... Companiesmayspeakdirectlywithpeercompaniesinthelocalmarket tobetterunderstandlocalsalarytrends,bestpracticesforattracting andretainingkeytalent,andtodetermineunionizationtrends.They mayalsoexaminetheeducationinfrastructuretodetermineoverall Freight facilities can require a wide variety of employee talents, depending upon the exact nature of the facility. Skills required may include forklift operators, assemblers, truck drivers, machinists, mechanics, technicians, material handling specialists, and engineers in addition to unskilled labor. Read the entire page →
From page 49... ... Freight Facility Location Selection: A Guide for Public Officials 49 educationlevelsofthepopulationandtheavailabilityoffollow-on trainingprogramstofillspecificrequirements. Some companies view the presence of a union as beneficial, as specificindustriesalreadyexpecttoworkwithunionizedlabor.Unions mayprovidetraining,supporttothelocallaborforce,andalsoact asaneasily identifiablepartywhocanreadilyrepresent labor in negotiations.Othercompaniesworkactivelytoavoidunionization andwillusetheirlocationaspartofanoverallstrategytolessenthe riskoflaborbecomingorganized. Total cost environment Companies develop cost models to evaluate the relative costs of doingbusinessineachcandidatelocationorscenario.Themodels will assess the sensitivity of each scenario's relative feasibility to changes in factors suchas fuel costs,productmix, labor costs, tax exposure,productsourcing,orotherkeyinputs.Thecostmodelmay includeanyorallofthefollowing: $ Start-up costs • Landorfacilitypurchase(ifapplicable) Read the entire page →
From page 50... ... Freight Facility Location Selection: A Guide for Public Officials50 • Utilities. • Propertyandincometaxes. Read the entire page →
From page 51... ... In addition to facilities, the availability of low-cost land and large parcels impacts location decisions, particularly for large intermodal facilities such as the Rickenbacker facility (mentioned earlier) and Alliance Global Logistics, an 11,600-acre integrated logistics center in north Fort Worth, Texas. Read the entire page →
From page 52... ... , willpayevenmoreattentiontoutilitiesandmayevenuseaccessto uninterruptedpowerasago/no-goissuewhenevaluatingpotential sites.Freightfacilitiesoftenincludeassemblyorlightmanufacturing operations inaddition tofreightmovement.Utility requirementsof theseancillaryfunctionsmayimpactlocationneeds. Permitting and regulation Permittingandregulationimpacthowacompanycanimplementits plansforaparticularsiteandcanalsoimpactitstimeline.Knowledge thatacommunityisalreadyfamiliarwithindustrialandfreightfacility typesandhasaprocessinplacecanbeseenasalocationpositive. Contentandinterpretationoffirecodes,landuseregulations,traffic regulations,zoning,andhoursofoperationregulationscanallimpact thefeasibilityofafreightfacilitylocation. Tax environment Income, sales, real estate, and property taxes can all affect the costenvironmentforfreightfacilities.Realestatetaxescanbehigh on urban facilities, especially if the land could be used for other high-densitydevelopment suchas upscale condosand retail.High Income, sales, real estate, and property taxes can all affect the cost environment for freight facilities. Read the entire page →
From page 53... ... When competing sites are rated relatively equal, incentives offered by the public sector may help close the deal. Read the entire page →
From page 54... ... Freight Facility Location Selection: A Guide for Public Officials54 LOCATIOn CRITERIA TyPE OF LOGISTICS FACILITy Distribution Center Port Intermodal Terminal Transload Terminal ILC Hub Terminal City Terminal AbilitytoAccessKey MarketsorCustomers Interactionwith TransportationNetwork LaborandWorkforce TotalCostEnvironment AvailabilityandCostof SuitableFacilities Utilities Permittingand Regulation TaxEnvironment PublicSectorAssistance andIncentives ClimateandNatural Hazards key PriorityofCriteria: PrimaryFactor ImportantFactor LesserFactor Table3belowidentifiestherelativeweightofvariousfactorsthat willdrivethesitelocationdecisionforeachtypeoffreightfacility. Publicofficialsshouldnote thatfactorsoverwhich theyhavesome control–permittingandregulations,thetaxenvironment,incentives andotherformsofassistance–aregenerallyalessimportantfactor than access to markets, transportation networks, and aworkforce whenlocationdecisionsarebeingmade. Table 3. Read the entire page →

From page 39...

... Proximity and/or access to markets, especially supply chain networks, is the single most important factor in determining the location of a freight facility. most of the other site selection factors are used to refine the site selection process to specific, sometimes competing, sites.