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20


Issue 6 2018 - FBJNA


///MIDWEST


Tales of three Midwest dynamos


By John Jeter


To hear ports executives from St. Louis; Kansas City, KS; and Chicago tell it, geography is hardly the issue—given, of course, that the Midwest’s three biggest supply-chain hubs really are in the middle of everything. Talk to any logistics executive in those cities, and they’ll tell you they’re within a two days’ drive of 80% of every American consumer. These days, time’s shrinking,


thanks to last year’s 16% increase in e-commerce and forecasts for even bigger growth, while geography itself is becoming more a technological challenge. Increasingly, then, supply-chain


challenges revolve around space, namely warehousing/distribution capacity, C-suiters say. Congestion, aſter all, adds cost. Here’s a look at those three


hubs. St. Louis


How do you handle 190 million total tons of all modes of freight traffic when you see major growth ahead? You build more. More warehouse/distribution and industrial sites, more logistics


parks to meet an expected doubling of cargo through the next decade. “When it comes to developable


industrial land and buildings, we have abundance,” says Mary


additional square feet underway since the beginning of this year or breaking ground soon. Two more industrial parks are planned for 925 acres on both sides of the Mississippi River. “Supporting the development of those parks is more than $1.5


“When it comes to developable industrial land and buildings, we have abundance.”


-- Mary Lamie, St. Louis Regional Freightway


Lamie, executive director of the St. Louis Regional Freightway, a freight district serving Missouri and Illinois counties in the metropolitan area. In addition to maritime ports,


other assets include six Class I railroads in the nation’s third- largest rail hub; four interstates; and two international cargo airports, St. Louis Lambert International Airport (STL) and MidAmerica St. Louis Airport. In between is readily available


space—with more on the way. More than 10.5 million square


feet of logistics-centric space have been delivered in the last


two years, Lamie says, with 6 million


centered on a new ship design— linking Plaquemines Port Harbor and Terminal District in Louisiana with the St. Louis region. American Patriot Holdings is


developing a vessel with new features that can carry up to 2,500 containers at speeds of 13 knots, making roundtrips from the mouth of the Mississippi to St. Louis in 10 days—“significantly faster than a Container on Barge,” Lamie says. “The ability to carry so much


cargo on a marine route all the way from Asia to the Midwest would dramatically reduce shippers’ landed transportation cost vs. rail and truck from other gateway ports,” she adds. The Plaquemines-St. Louis


billion, and counting, in new public and private multimodal infrastructure investment over eight years along a 15-mile section of the Mississippi River that is quickly becoming known as the Ag Coast of America,” Lamie says. The “ag” tag comes in part from


$200 million worth of investments for agricultural-product barge- transfer facilities along that stretch of river. Lamie cites a U.S. Army Corps of Engineers study saying St. Louis’s barge traffic is 2.5 times more efficient than its closest competitor. She also mentions a


Any time is the right time to load up at Lambert St. Louis International Airport. (STL photo)


“transportation alternative that could maximize the inland waterway’s existing underutilized capacity and result in less highway congestion and decreased emissions.” She’s talking about a proposed Container on Vessel


service—


collaboration was formalized in March with a five-year agreement signed among five transport and port agencies. The plan: to cooperate on river services in conjunction with barge, truck, and rail logistics—all with an eye toward improving infrastructure and transportation efficiencies. Enter the mighty soybean.


Lamie cites a U.S. Department of Agriculture projection that the U.S.’s global soybean trade will grow by 30% through 2027. “Without improvements


to regional transportation infrastructure, Brazil and Argentina are poised to capture more of the world soybean export. This directly impacts American farmers: Just 1% of market share is worth nearly $500 million dollars in annual revenue.” (In July, the Trump Administration announced $12 billion in aid to farmers for emergency trade relief due to lost business from trade wars between the US and China.) To compete, globally and


At night, in plane site at Lambert St. Louis International Airport. (STL photo)


locally, she says, “Efficient transportation infrastructure and exchange capabilities are critical. The St. Louis region has a track record of bi-state regionalism that makes infrastructure investment one of our highest priorities.”


Kansas City


In Kansas City, Logistics Park Kansas City has 17 million square feet of space on its 1,700 acres. But even more industrial, distribution,


five years, according to a CBRE industrial real-estate study.


“An


additional 1,200-acre expansion project is in the works,” reports Colby Tanner, BNSF’s assistant vice president


for Economic


Development. Says Gutierrez: “That park is


the fastest-growing intermodal facility. The railroad itself has met all of their goals and continued to expand the industrial park next to it. They were hoping to get to 11 or 12 million square feet of


“We push the envelope in terms of new spec development compared to any other city.”


-- Chris Gutierrez, KC SmartPort


and warehouse development is on the way. “We push the envelope in


terms of new spec development compared to any other city,” says Chris Gutierrez, president of KC SmartPort, the economic development group for logistics. “We’re on track to hit another 7 million square feet of new spec development this year. It’s not just LPKC; it’s in the region, both sides of the state line.” The area has seen 28 million square feet delivered in the last


distribution space in 10 years, but they’re past that in four.” In its “2018 Trends in Kansas


City’s Industrial Market” report, CBRE says last year’s investment transactions topped $500 million, a figure that is quadrupled from the previous year. “This was led by the


recapitalization at Logistics Park Kansas City, involving 10 fully leased buildings, one of the largest commercial real estate deals in Kansas City history,”


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