Logistics Hot Spots
Area Development Research Desk (Aug/Sep 07)
The international supply chain is a relatively new phenomenon for many U.S. companies, many of which are still working through how to align their domestic distribution networks with global manufacturing realities.
However, there are some companies that have been international for years, including author Underwood's company, APL Logistics, which operates in more than 50 countries and was one of the first 3PLs to set up shop in China.
In light of that, Area Development asked Underwood to comment on where his company has the greatest concentration of U.S. locations - and to tell us why those locations are so key in today's more Asia-centric manufacturing environment.
APL Logistics has its greatest concentration of square footage - about 3.1 million square feet - in California - not just because it's the major population center on the West Coast but also because the ports of Los Angeles and Long Beach are some of the busiest in the country. In fact, that's why APL opted to open its first deconsolidation center there. The port access is paramount.
In addition to being the gateway to the Midwest, Chicago is a real mecca for intermodal transportation, which means that you'll only see it becoming more important as the battle for quality North American transportation heats up. The fact that it's not located directly near either coast makes it an attractive option for companies that are interested in a port diversification strategy, because they can easily bring goods in on either coast.
When you think about distribution in the Southwest, Texas is always the state that comes to mind first. Not only is Dallas a major population center with all the quality infrastructure you associate with that, it also offers excellent access to Mexico and other Latin American countries, which could prove invaluable for companies that want to deploy more of a near-sourcing manufacturing strategy.
Atlanta has the twofold advantage of being one the country's most populous cities as well as the gateway to the Southeast. While not a port city like Los Angeles, it's also the closest major population center to thriving ports like Charleston and Savannah.
Indianapolis and Memphis
About as close as you can get to the center of the country, Indianapolis and areas like Memphis are especially popular for companies with a particularly high inventory carrying cost that prefer not to have their goods spread throughout the country. APL operates its single largest facility in Indianapolis, a mega-warehouse that measures well over one million square feet. The fact that Indianapolis is in the middle of both coasts also makes it attractive for port diversification.