Over the last decade, there has been a sea change in how freight is moved through ports and on land, which is beginning to have a profound impact on traditional ports and inland ports and the real estate that surrounds them.
Jim Ford, a project executive of logistics and infrastructure at Clayco, said during a session at the 2015 ULI Spring Meeting that the new focus on how freight is moved has shifted to connectivity and reliability, which has been pushing ports and real estate developers to create more efficiency.
In the past, freight would traditionally be loaded onto trains after arriving at a port and then taken to a population center before being trucked to its final destination. But now, Ford said, railroads and port authorities are having to get more creative.
In addition, whereas retailers were reliant on port authorities and railroads in the past, many have begun to invest in their own facilities near inland ports. One example is Chicago-based Archer Daniels Midland Company, a huge agricultural processor and food-ingredient provider that recently built its own private intermodal terminal at the Midwest Inland Port in Decatur, Illinois.
Ford also used the example of BMW, which has a large facility near the South Carolina Inland Port in the city of Greer, located 212 miles (341 km) inland from the Port of Charleston. The carmaker puts several versions of its sports utility vehicles together at the plant, then disassembles them before loading them onto trains to the Port of Charleston and then exporting them in pieces to be reassembled and sold overseas.
“It’s an evolution of creativity in the methods of movement,” Ford said.
Michelin and Adidas also have facilities near the South Carolina Inland Port.
These users have helped shift the focus away from getting product to the store level for retailers to getting back to assembly and manufacturing in a more efficient way using well-planned modes of transportation.
Ford pointed to a similar example with a port in north Georgia near Chatsworth that supports the carpet and flooring industry.
Shane Williams, Foreign Trade Zone administrator for the Port of Houston Authority, said the trend can also be seen in the manufacture and export of plastic resins out of the Port of Houston. The increased demand in plastic resins—used to manufacture plastic water bottles and other products—has spurred the construction of more than 40 million square feet (3.7 million sq m) of new space just for the storage of these plastic pellets, which has created a big push in the development of rail-served warehouses and storage and transit yards.
The resins are loaded onto rail cars and taken to storage buildings until they are exported.
“Plastics and resins [are] a huge boom here, especially for exports,” he said. “We have a huge captive market for resins.”
Curtis Spencer, president of IMS Worldwide Inc., said whether it is resins in Houston or cars or flooring in the Southeast, the manufacturing wave is shifting back to areas near U.S. ports, spurred in part by relatively cheap energy such as electricity, as well as innovation and technology.
“In lots of cases, products can be made here and exported cheaper than they can be made in Europe,” Spencer said. “We are seeing a real resurgence in American manufacturing.”
With that reemergence in mind, Clayco recently developed an inland multimodal facility—which allows transportation in and out in more than two ways—in Winterhaven, Florida, that allows for the development of direct rail straight into the industrial park. Ford said projects like this one will likely begin to sprout up in other inland markets.
“It’s part of the optionality that’s occurring, and it’s a very real shift,” he said.
