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United States Inward Investing Guide

United States Inward Investing Guide

Location USA is a guide for international companies looking to invest or establish operations within the United States. Location USA provides practical advice and guidance about facilities deployment, labor force skills, taxes and incentives, and more. For specific information on all 50 states, utilize the State Resources links.

The United States as a Logistics Hub for the Americas - and Beyond
The United States has the world's largest, most efficient, world-class logistics infrastructure, which is currently under-going upgrades to handle growing capacity.
Bill Luttrell, Senior Locations Strategist, Werner Global Logistics, Werner Enterprises (Location USA 2012)
(page 2 of 2)
Mega transportation corridors are developing rapidly, connecting large metropolitan areas and regions throughout the United States. These include:

  • Boston - New York - Philadelphia - Washington, D.C.

  • Chicago - Pittsburgh

  • Charlotte - Atlanta

  • Southern and Northern California

  • Denver - Omaha - Kansas City - St. Louis

  • Indianapolis - Columbus

  • San Antonio - Austin - Dallas - Oklahoma City

  • Louisville - Cincinnati - Lexington

  • Orlando - Tampa - Miami

  • Seattle - Tacoma - Vancouver

  • Cleveland - Youngstown - Akron - Canton

  • New Orleans - Baton Rouge - Memphis

  • Tucson - Phoenix - Las Vegas - Salt Lake City

  • Idaho Falls - Great Falls - Calgary

As the United States grows by an additional 30 million people by 2050, keeping its transportation infrastructure in top condition and meeting these future growth needs are vital and will require long-term planning.

Sector Challenges

Trucking companies are experiencing several issues, including new Compliance, Safety, and Accountability (CSA) safety requirements; Hours of Safety (HOS) guidelines; and very tight capacity conditions. The CSA has already begun sending warnings out to carriers regarding deficient safety numbers. These CSA reports on carriers will force them to keep on top of their data if they want to be competitive. HOS rules calling for shorter-hour limits and restart timelines for drivers are currently being debated in Congress, and a decision should be forthcoming soon.

Capacity constraints, the sudden high cost of new trucks with 2010 Environmental Protection Agency (EPA) compliant engines, and the unknown economy have most carriers holding off on buying new trucks until the economy picks up. This means we will see more aging trucks on the road. Today the average age of the U.S. fleet of Class 8 trucks is seven years, an increase of 17 percent since 2005. An aging fleet, along with a surging shortage of drivers due to tougher hiring requirements and higher fuel prices, has led to higher pricing.

U.S. rails are in a better position. Railroads, along with government entities, have poured millions into upgrading U.S. rail network infrastructure. The Association of American Railroads is requesting that $150 billion be spent on upgrades and expansion by the year 2040 to meet network future needs. Overpasses and tunnels have been upgraded to accommodate double stacking. The Class I railroads were recently the major recipients of $7.7 million from the government to upgrade security. Railcar leasing companies are now pulling several thousand idle railcars out of storage to meet increasing demand.

Weather and cost-cutting has caused some constraints, but intermodal rail continues to grow at a very rapid rate. New high-tech intermodal facilities are being built. Volume-wise, more than 4 percent of total U.S. tonnage has shifted from trucks to rail due to higher fuel prices and new double-stacking routes. Basically, if a product is moving more than 750 miles, rail transport can be an economical option.

The U.S. port infrastructure has also been going through major upgrades. While the West Coast ports have already made significant upgrades, the East Coast ports are currently spending millions on upgrades directly related to the $5.25 billion Panama Canal expansion, which is expected to be completed in August 2014. New post-Panamax ships will be twice the size of current vessels and require a 50-foot draft, and U.S. ports - especially those on the East Coast, including New York/New Jersey, Norfolk (Virginia), and Charleston (South Carolina) and Savannah (Georgia) - are competing for expanded traffic.

All U.S. ports are modern, state-of-the-art facilities with trucking and rail links, warehouse/terminal development, and foreign-trade zone (FTZ) status. U.S. ports recently received $235 million in security grants from the government. The United States also has a series of inland ports that have been making significant upgrades. These include inland ports located in Dallas/Ft. Worth, Chicago, Kansas City, St. Louis, Atlanta, Memphis, the Inland Empire of California, Columbus (Ohio), Charlotte (North Carolina), and Florida's Inland Port.

Air service, including global air cargo service is widespread across the United States. The International Air Transport Association (IATA) states that the air cargo industry continues to experience some extensive capacity oversupply and flat volume well into next year. However, the volume to/from the United States and Latin America is gaining. With inspections on all domestic and "high-risk" international flights, the Transportation Security Administration (TSA) states that air cargo is more secure than ever.

The bottom line is the United States has the world's largest, most efficient, world-class logistics infrastructure in place, and it is currently undergoing upgrades to handle the growing capacity of the future. From the West Coast ports of Los Angeles/Long Beach, to the inland transportation hubs of Omaha and Memphis, to the border crossing at Laredo (Texas), to Chicago's O'Hare Airport, the United States is truly a mega hub to the Americas - and beyond.

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