Ranked #2: Highway Accessibility

Highway accessibility continues to be among the highest ranked factors that corporate site selection managers use in selecting locations for offices, factories, and logistics operations. So why does it continually find its way to the top of the list in Area Development's Annual Corporate Survey?

We recognize that choosing the location for a new facility has become a strategic move that can spell success or failure for a company's business, especially when it comes to the placement of manufacturing plants and distribution centers. And none of the locations that may be under consideration will ever be ideal if highway accessibility isn't understood. So what should you do next?

Ask Some Key Questions
Does the location have a good access to interstate highways and other major thoroughfares?

Whether it is a factory, distribution center, or other type of facility, access to major arteries will always give you more bang for your transportation dollar. Also, if the facility is not in an accessible location, prospective employees may find it hard to get to work, and motor carriers may find it even more difficult to locate your new address. There's a lot to be said for being in the "public eye."

What is the condition of the roads that connect with the location being considered?

If the roads are in disrepair, this will discourage applicants from becoming employees, and truckers may also not be able to get to you; the dimensions of the streets coming in and going out may be a hindrance. Not only must the roads be accessible and conveniently located, they must be able to support the kinds of traffic that your business will come to expect.

What enhancements are planned to existing roads in the next five years?

If the location isn't immediately accessible to an interstate highway, how will that change - if at all - in the next five years, and how would construction impact access to your plants and offices? How many times have you stopped going to your favorite restaurant because the roads around it are being repaved or reworked? That can be the death knell for a business, especially a smaller one.

Are there any zoning restrictions that would limit the ability of trucks to access the location?

If 18-wheelers can't have access to the roads leading to your plants, then full truckloads of product can't be delivered or picked up. Beware of streets in an industrial area that have limits on the size or weight of the vehicles using them.

Are there any height restrictions on reaching your new location?

Suppose you need to have trucks bring building materials to you and the combined height of the truck and materials is 15 feet, but a bridge one mile down the road is only 14 feet high. At a minimum, this will disrupt your plans and cause a rework that will cost you more time and money to implement.

Stay On Schedule
If new construction is in your future, then good highway access helps to ensure availability of the work force that is needed to build and design your facilities. And this access helps to speed the delivery of the equipment and building materials needed for the construction.

People, equipment, and materials are essential to keeping to the timeline for developing new facilities. Failure to stay on schedule can negatively impact market share, lease expiration dates, location consolidations, acquisitions, and other expansion plans. Delays - whether due to congestion or road conditions - can all contribute to missed opportunity for your business.

What Others Have To Say
Other research supports these conclusions and puts a footnote on the impact that highway accessibility has on local economic performance. Studies by the Kentucky Cabinet for Economic Development, for example, show that highways are a major factor in determining economic performance in its state. This is according to J. R. Wilhite, Commissioner, Existing Business Development, Kentucky Cabinet for Economic Development. Wilhite presented the studies at the Annual Kentucky Transportation Conference in Frankfort in January 2006. "Highway accessibility is the most important factor in getting and keeping good jobs," said Wilhite.

Charts prepared by the Kentucky Cabinet for Economic Development show graphically exactly what good highways mean to that state in terms of gross product, per capita personal income, wages, and the poverty rate. While there are a few exceptions, if a highway map is overlaid on these charts, it is clear that nearby interstate corridors are where the highest level of economic activity is, followed by the parkways and good four-lane highways.

Per capita gross product for counties served by interstate highways is nearly three times that of counties that do not have good four-lane highways. According to the Cabinet's findings, per capita income is 56 percent higher.

You have only to do a few Internet searches to find similar reports for economic development in other areas of the country that show how highway accessibility is tied in.

Deal With Shortcomings
No highway issue will be perfect. If shortcomings are obvious, highway access can often be improved to acceptable levels if the community surrounding an area is willing to finance the improvements needed to attract your business and others like it. And not all the improvements involve years of construction. Some may be "simple" fixes like adding dedicated turning lanes or traffic lights and widening certain key stretches of the roadway. More involved changes include installing flyover exit ramps and entire new roads. Find out if the needed improvements involve the highway itself or local zoning ordinance changes to eliminate the barriers between your business and an interstate highway system.

In Conclusion
These are just some of the questions and issues that should be addressed about highway accessibility when doing a site search. A failure to recognize the importance of highway access can be catastrophic to the lifeline of your business. A simple rule to follow is that if you can't easily drive to a location to check it out yourself, then chances are no one else can, and maybe you should be expanding or revising your site search.

Note: Rick Thomas is director of managed transportation at CEVA Logistics. He can be reached at (904) 996-1901. CEVA Logistics is the new name for TNT Logistics, which began rebranding in December 2006. CEVA provides a wide range of supply chain logistics services for key market sectors. CEVA employs more than 38,000 people, who are operating in 26 countries, managing 79 million square feet of warehouse space. In 2005, CEVA reported sales of $4.22 billion. The CEVA Logistics web site address is www.cevalogistics.com.