One location, many options

Multimodal freight centers offer shippers a variety of transport options, distribution facilities, and support services at a single site.

By Toby B Gooley -- Logistics Management, 11/1/1998

all them the logistics equivalent of the shopping mall. They are full-service, multimodal distribution centers and industrial parks, which have sprung up around the country in recent years. Those centers have become an appealing option for logistics managers and an important factor in site selection.

The concept of one-stop shopping for logistics services traditionally has been applied to freight transportation and third-party logistics services. The freight centers provide another alternative. The idea is to simplify operations for the logistics manager while allowing shippers to consolidate and leverage volumes for cost savings. A look at several of these logistics-friendly industrial parks shows why the availability of a full range of transportation, communication, and building options at a single location benefits shippers.

Airbase Resurrections

The growth of these multimodal centers has paralleled to some extent the federal government's continuing program to close military bases around the country. Because the bases frequently have airport runways, rail spurs, and good highway access, local governments seeking ways to develop them for civilian use are resurrecting them as multimodal distribution and manufacturing centers.

One of the first military bases to make that transformation is the New Century AirCenter in Johnson County, Kansas. Formerly the Olathe Naval Air Station, New Century was purchased in 1973 by the Johnson County Airport Authority with an eye toward developing it as an industrial park and general-use airport.

Since then, the county has invested millions of dollars in upgrading the former base's physical plant, transportation infrastructure, and utilities. Today, New Century supports 35 businesses employing more than 4,000 people. In addition to a number of aviation-related service firms, manufacturers and distributors like Lipton, The Toro Co., Howell Mouldings, and Heartland Cement have settled at New Century for several reasons, says John Engelmann, president of the Southwest Johnson County Economic Development Corp.

"What we are offering is flexible efficiency," Engelmann says. "Shippers are looking for time and cost efficiencies that affect their bottom line, and New Century offers many different options." On the transportation side, tenants may choose truck or on-site rail service. Some use both: Engelmann cites the example of a manufacturer of plastic products that brings raw materials directly to its plant by rail and ships finished products out via truckload carrier. Aircargo shippers, meanwhile, have access to domestic and international service through Kansas City International Airport, just 40 minutes away. (The airport authority is courting airfreight carriers, but none have signed on yet.)

New Century's location at a transportation crossroads 25 minutes west of downtown Kansas City also is a strong selling point, Engelmann says. The industrial park is immediately adjacent to an interchange of Interstate 35, the "NAFTA Superhighway" that runs from Western Canada into the heart of Mexico. The rail spur connects directly to the Burlington Northern Santa Fe Railroad's main line, which runs between Los Angeles and Chicago.

Another military base redevelopment is in San Antonio, Texas, where local authorities are promoting Kelly Air Force Base as a multimodal logistics center. The base is being phased out over several years, with final withdrawal scheduled for July 2001.

Because Kelly operates as an Air Force Logistics Center, it already has runways, an air-traffic control tower, an on-site Union Pacific rail line, and immediate access to Interstate 35. It also will offer more than two million feet of warehouse space when the facility is entirely privatized. A wide variety of buildings are available, says K. Blake Hastings, vice president of Free Trade Alliance San Antonio, a non-profit group that encompasses public and private economic-development organizations. "Some are well-suited to assembly and light manufacturing. Other buildings are already very automated and will require little investment for commercial use," he explains.

The city of San Antonio, in partnership with the U.S. Department of Defense, will upgrade some facilities for commercial applications. The existing airfreight terminal, for example, will be modernized. A number of buildings also will get additional loading dock bays, updated electrical systems, and other improvements that will bring them up to current building-code standards. A new trailer storage lot designed for high-volume trucking operations also is under construction.

One of Kelly AFB's biggest selling points is its proximity to Mexico's industrial heartland. Because of the city's fast, direct highway and rail access to Mexico, about half of all U.S. trade with Mexico passes through San Antonio, says Free Trade Alliance President José E. Martínez. That makes it an ideal place for shippers and carriers to consolidate and deconsolidate shipments moving between the two countries, he reports. An added attraction for international shippers is the base's recent designation as a Foreign Trade Zone (FTZ). This status allows importers to defer, reduce, or eliminate duties on products that receive further processing within the zone.

Although Kelly is still operating as a military base, a number of facilities already have been turned over to private enterprises. Current tenants include The Boeing Co., Pratt & Whitney, intermodal trucker W.W. Rowland Trucking Co., and Ryder Integrated Logistics.

City of Transportation

The idea of offering multimodal services from a central location is not limited to former military bases. The entire city of Columbus, Ohio, considers itself to be a multimodal distribution center called the "Greater Columbus Inland Port." Thanks in part to the availability of a wide range of freight transportation services, Columbus has become one of the most popular locations in the country for logistics, warehousing, and distribution operations. Among the city's high-volume shippers are The Limited, Honda of America, Spiegel Co., Eddie Bauer, Kraft Foods, JC Penney, Wal-Mart, Ross Laboratories, Whirlpool, and Consolidated Stores, to name just a few.

The Inland Port provides shippers with numerous options in every mode of transportation. Shippers that depend on trucking, for example, can choose from more than 130 national, regional, and intrastate motor carriers that have operations in the Columbus area. Many international freight forwarders and ocean carriers also have offices in Columbus.

Rail connections are plentiful; both CSX and Norfolk Southern operate intermodal terminals as well as services for liquid and dry bulk cargoes. Of interest to international shippers are the Inland Port's relationships with the ports of Los Angeles, New York/New Jersey, and Virginia. These agreements involve joint marketing efforts, the development of coordinated rail services, and cooperation on transportation policy issues.

Airfreight infrastructure is one of the Inland Port's big drawing cards. Port Columbus International Airport handles both passengers and cargo. Rickenbacker International Airport, a former military base, is exclusively devoted to air cargo. The airport, located just south of Norfolk Southern's intermodal ramp, has a rail spur that serves several distribution centers. Rickenbacker also boasts Ohio's longest runways, a Foreign Trade Zone, a 24-hour U.S. Customs Service office, and millions of square feet of warehousing space. With more than 150 distribution and manufacturing facilities exceeding 50,000 square feet each in Columbus, Rickenbacker has been able to attract such airlines as Federal Express, Polar Air Cargo, Evergreen, United Parcel Service, and Southern Air Transport.

A multimodal center of a different sort is the Alliance Industrial Park in Fort Worth, Texas. Unlike the other multimodal centers mentioned here, the Alliance center is completely private. Owner Hillwood Development Corp. has created a multifaceted complex that accommodates industrial, distribution, office, research and development, and retail business uses in a series of purpose-built and speculative properties.

Alliance has proved to be attractive as a distribution site for a wide range of companies. Among the many shippers that have distribution, warehousing, or other logistics operations at Alliance are CompUSA, Food Lion, General Mills, James River Corp., JC Penney, Kraft Foods, Marriott Distribution Services, Michaels Stores, Nestlé Distribution Co., SC Johnson Wax, Texas Instruments, and Zenith Corp.

What has brought them to Alliance, says Jay Hayes, Hillwood's director of business development, is the number of on-site and nearby transportation options. Many companies use a variety of transportation resources--for instance, bringing in raw materials by rail and shipping finished and high-value products by truck or air, he explains.

Transportation infrastructure, in fact, is an integral part of Alliance. The project offers immediate access to three major state highways, and Interstate 35 runs directly through the development. Rail service also is easily accessible: Major north-south transcontinental lines belonging to the Burlington Northern Santa Fe and the Union Pacific railroads pass through Fort Worth. The BNSF also operates a 735-acre intermodal and carload complex on Alliance property. The developer is willing to assist in getting trackage laid directly to a tenant's door; both Food Lion and Nestlé's, for example, have their own sidings. JC Penney's one million-square-foot distribution center, now under construction, will use a direct rail connection to bring in containers from Asia for deconsolidation and store distribution, Hayes says.

Alliance may be best known for Fort Worth Alliance Airport, which serves cargo and general aviation users, including FedEx's new Southwest sorting hub. The airport is owned by the city of Fort Worth but is run by a private operator. Its uncongested runways make it easy for cargo operators to offer manufacturers and distributors door-to-door service. The U.S. Customs Service office at the airport can clear international cargo in minutes. A new world trade center facility to be constructed soon will house freight forwarders, customs brokers, and other international service companies. Alliance's designation as a Foreign Trade Zone is another attraction for companies involved in international trade.

Icing on the Cake

For shippers that use more than one mode of transportation, whether it be for inbound or outbound shipments, multimodal distribution centers can make their operations simpler, faster, more efficient, and less costly. The availability of such amenities as Foreign Trade Zones, on-site customs clearance, telecommunications services, international banking, and other trade-facilitation services at most of these industrial developments is like icing on the cake.

There are a number of other multimodal, full-service distribution centers around the United States--Global TransPark in Kinston, N.C., and North America Center near Buffalo, N.Y., for example--and shippers can expect to see more of them in the future. As the logistics world becomes increasingly complicated, the kind of flexibility, convenience, and cost savings they offer is something more and more shippers are coming to appreciate.

Multimodal Center Takes Shape in Europe

The United States isn't the only place where multimodal distribution centers are taking off. The concept of an industrial park that offers on-site access to multiple modes of transportation plus a variety of related services is becoming popular in Europe, as well. Governments there, anxious to get freight off the roads to reduce congestion and pollution, are actively encouraging such developments.

One of these is France's Europort Vatry. Located in the Champagne region 90 miles east of Paris, the inland port's slogan is "The victory of freight over time." Scheduled to open its first phase late next year, Vatry will include a 24-hour all-cargo airport/freight-handling complex, a road and rail transport center with direct connections to highways and rail lines, a logistics center with a full range of international business services, and a light assembly/warehousing/post-manufacturing zone. This integrated structure will be served by state-of-the-art information and internal transportation systems.

Like many other multimodal centers, an old military base--in this case, a former NATO facility--provides the underlying structure for the center. Upgrades to the airport and construction of new buildings are under way, and a management consortium headed by the Montreal Airport Authority has been selected to operate the complex. Vatry already has signed several distribution center tenants, including Air Liquide Welding and Cora, a European retailer.

Vatry has a lot to offer shippers that distribute products throughout Europe, says Vatry's U.S. spokesman, former Air France president Jean-Didier Blanchet. It is located at a true crossroads of commerce, he says, with major east-west and north-south highways leading to all the major European population centers passing through Champagne. "This location is exceptional--we will have a multimodal facility within seven hours' drive of 75 percent of the Gross National Product of Europe," he notes.

With its uncongested highways, rail lines, and airport, Vatry will speed up distribution for both shippers and carriers, Blanchet says. Its location in a sparsely populated area, moreover, means there will be no environmental restrictions on operations. "We are in a wide-open agricultural area ... that's why a 24-hour operation is possible in Vatry," he says. Staffing will not be a problem, he predicts, since nearby Chalons en Champagne, a city of about 100,000 people, offers a well-educated workforce.

Blanchet stresses that Vatry will be not only highly efficient, but also a low-cost option for shippers and carriers. Because the existing infrastructure was so extensive and well-maintained, development costs are expected to top out at about US$200 million, he says. That will allow the development authority to keep costs low for its tenants--a policy to which it is publicly committed. Furthermore, he asserts, Vatry's status as an all-cargo facility means better service for cargo interests than anywhere else in Europe.