Location, Location, Location: The Rise of Third Party Logistics

Location, Location, Location:
The Rise of Third Party Logistics
John E. Greuling
President & CEO
Will County Center for Economic Development
According to the Council of Supply Chain
Management Professionals, 3PL is defined as:
"a firm that provides multiple logistics services
for use by customers. Preferably, these services
are integrated, or bundled together, by the
provider. Among the services 3PLs provide are
transportation, warehousing, cross-docking,
inventory management, packaging, and freight
forwarding."
CENTERPOINT INTERMODAL CENTER – Elwood, Illinois
CENTERPOINT INTERMODAL CENTER – Elwood, Illinois
CENTERPOINT INTERMODAL CENTER – Elwood, Illinois
CENTERPOINT INTERMODAL CENTER – Joliet, Illinois
CENTERPOINT INTERMODAL CENTER FACTS
• Opened in 2002, CIC offers rail, highway, and barge access to the
Midwest
• Development is made up of 6,500 acres zoned for industrial use
• Located 40+/- miles southwest of Chicago in Joliet and Elwood in Will
County, Illinois
• Anchored by BNSF Logistics Park – Chicago (LPC) and Union Pacific
Joliet Intermodal Terminal (JIT) offering domestic and international
service with most major US ports
CENTERPOINT INTERMODAL CENTER FACTS
2012 STATISTICS
• Approximately 3 million twenty-foot equivalent units (TEUs)
between BNSF LPC and UP JIT
• Over 11 million square feet occupied
• 28 tenants from varying industries (i.e. Railroads, Rail Users,
eCommerce, Retailers, Exporters, Ocean Carriers, Third Party
Logistics Providers, and Distribution and Manufacturing
operations)
CENTERPOINT INTERMODAL CENTER FACTS
2013 & BEYOND
• CenterPoint Intermodal Center – Joliet / Elwood is on track to
become North America’s third largest maritime port, behind Port
of Los Angeles / Long Beach (1) and Port of New York / New
Jersey (2), and North America’s largest inland port in terms of
container volumes
• At full build-out, CIC has the capability to handle over 6 million
TEUs per year (BNSF LPC and UP JIT combined)
• At full build-out, CIC will create approximately 26,520 total jobs
(Elwood and Joliet combined) and bring annual revenues in terms
of total wages, taxes and new investments of over $2 billion
CENTERPOINT INTERMODAL CENTER FACTS
2013 & BEYOND
• Capability for approximately 25 million additional square feet
within the development, with a maximum development capability
of 36 million square feet
• An estimated $65 billion of goods are imported and exported
annually
• This port is the fastest growing agriculture export hub in the
Midwest with over 70 million bushels of locally produced
agricultural products being exported annually.
The Rise of Third Party Logistics
The growth of major logistics hubs have increased the demand for 3PL’s
• Provide an important service in the movement of international and domestic
freight – the freight industry has come to rely on 3PL’s to keep costs down.
• Provide supplementary supply chain support for new market expansion while
minimizing risk.
• Supports seasonal or cyclical market fluctuations on a short term basis.
• Increases on-time performance using latest equipment and technologies.
• 3PL’s have cost savings offered by freight volume discounts, load consolidation and
backhaul opportunities.
The Rise of Third Party Logistics
3PL’s have a positive economic development impact
• Occupy relatively large blocks of space very quickly.
• Pay local and state taxes.
• They provide full-time, part-time and seasonal employment, often with a low
barriers to entry.
• The presence of 3PL’s increases your regions competitiveness for logistics industry
locations.
• Increases local business activity in service and retail sectors.
• Locations not driven by public incentives
The Rise of Third Party Logistics
3PL’s can present some community challenges
• Tend not to integrate into the local community fabric. The “third party” is not
often seen in the community.
• Customer contracts often are short term – long term business commitment in one
location is limited.
• Many part time, seasonal jobs in the sector. Low skill, lower pay jobs for
distribution center workers common. Lack of benefits.
• In some markets labor dissatisfaction can be a problem: accusations of “wage
stealing”, no overtime pay, poor working conditions, etc. are not good for the
community image even if the accusations are proved false.
The Rise of Third Party Logistics
3PL’s: A Necessary Evil?
• Yes necessary but not necessarily evil!
• Like any industry sector you’ve got good and bad operators – the more you have,
the more you have of both.
• It is important for EDO’s to see 3PL’s as part of your logistics strategy – they are a
business, they occupy real-estate and they hire people!! Their platform is
different and that’s OK.
• In the logistics industry today, 3PL’s are another part of the infrastructure – you
need to understand and embrace their business model – they will make your
community a more competitive place to do business.
Thank-You!
John E. Greuling
President & CEO
Will County Center for Economic Development