By Intersect Illinois
There are many factors that companies looking to reach the country – and the world – need to consider when making location decisions. Transportation, distribution and logistics (TDL) companies need a location that offers a talented workforce, access to the world, modern infrastructure and ready sites. Below, we explore these attributes and their importance within subsectors of the TDL industry.
It’s impossible to operate a TDL company without the right people. With a 27 percent higher TDL job concentration than the national average, companies find the talent they need in Illinois, where more than 82,000 students completed programs that qualified them to work in TDL in 2021. Companies also need a location that invests in their people. Illinois is home to 254 higher education institutions churning out the talent of tomorrow and has programs such as the Illinois Workforce Equity Initiative (WEI) that offer industry training.
“When adults earn credentials with labor market value, it not only changes the trajectory of their lives, but also the lives of their families; while strengthening the community, growing the workforce, expanding businesses and creating a more vibrant regional economy,” said ICC (Illinois Central College) President Dr. Sheila Quirk-Bailey said about the WEI program.
Access to the World
One of the greatest factors logistics companies need to consider is how to efficiently and effectively move people and products via air, rail, road, or water. Illinois leads in all modes:
ROAD – 83 percent of the continental U.S. population is within a two-day truck drive; 3rd largest interstate highway system in the U.S.
AIR – Within a four-hour flight of nearly the entire North American market; Chicago’s O’Hare is the most connected airport in the world
PORT – 19 port districts offer direct links to the Atlantic Ocean, Great Lakes, Gulf of Mexico; home to the largest inland port in North America: CenterPoint Intermodal Center in Joliet
RAIL – The only state with all seven Class 1 freight railroads; twenty-five percent of all U.S. freight traffic passes through Chicago
Access to the world is not possible without modernized infrastructure and a supportive government that invests in the future. For example, Illinois is continually investing in improvements that help companies move people and goods; Rebuild Illinois has dedicated $33.2 billion to roads, bridges, mass transit, rail, aeronautics and ports.
“Since I signed our historic, bipartisan infrastructure plan into law over three years ago, we have already completed more than 4,500 miles of highway renovations, 422 bridge repairs, and hundreds of additional safety improvements—all while creating and supporting thousands of jobs. Planes, trains, automobiles, and barges, too—we are transforming and revitalizing every mode of transportation in every corner of our state to build a modernized Illinois that works for everyone,” said Illinois Governor JB Pritzker.
A location must also have qualified sites ready and available. The Chicago MSA alone has a record high of 37.5 million square feet of industrial space under construction, 25 percent greater than the previous record according to Colliers International. Whether companies need a distribution center with access to rail and water or a logistics technology office with access to exceptional engineering talent, companies can access a database of available sites on Intersect Illinois’ searchable portal. There, they will find some of the reasons more than 1,225 logistics companies expanded or relocated in the state since 2017 (the second most in the nation).
One of Illinois’ available sites is the Hartford Industrial Center, a level, 500+ acre, heavy industrial zoned property located in a TIF District and Enterprise Zone. It can be serviced directly by the Union Pacific, Kansas City Southern, Canadian Pacific, and BNSF lines and is located approximately one mile from the Mississippi River with potential barge dock access. The property is close to Interstates 255, 270, 55, 70, 64, and 40, as well as America’s Central Port, the 1,200-acre multi-modal business and industrial campus providing exceptional access to river, rail and road freight transportation. The site is close to fresh water, wastewater, natural gas, and electric infrastructure.
Retail And eCommerce Growth Stories
Workforce, access and infrastructure are important to retail and eCommerce companies from furniture to food. For example, Crate and Barrel opened a 646,000-square-foot fulfillment facility, investing $75 million and employing up to 200 people in Romeoville. This I-55 area has become a logistics and distribution corridor with major companies including Amazon, RJW Logistics, Best Buy and Wayfair building a presence.
“Growth. This is the main buzzword when talking about the I-55 Corridor,” noted a recent Colliers story. “Suburban Chicago offers a more friendly business climate with a strong labor supply, factors both recognizable and sought-after by outside users,” the story said.
Similar things are happening throughout the state. Major confection and snacking company, Ferrara, recently opened a 1.6-million-square-foot facility off I-88 in Dekalb, an investment of $100 million, bringing 500 jobs.
“Dekalb’s utility infrastructure, trained workforce and central location will allow us to drive scale and realize our ambitious growth agenda,” said Ferrara CEO Todd Siwak.
Ollie’s Bargain Outlet is building a new distribution center in Princeton, Illinois, investing $68 million and creating 145 new jobs. The 600,000 square-foot-center will serve 150+ stores. The company evaluated 150 sites across multiple states throughout the Midwest, weighing attributes including access, land quality and transportation. Princeton was chosen due to the site’s readiness, access to multiple modes of transportation and available workforce.
“Its central location to our other markets in the Midwest region and the strong workforce made Illinois the perfect spot for breaking ground to bring customers more bargains,” said Eric van der Valk, Executive Vice President and Chief Operating Officer of Ollie’s.
Third Party Logistics
The third-party logistics (3PL) subsector also looks for the same attributes. And it is because of those attributes that the Chicago region is home to 24 of the 25 top 3PL providers such as the Hub Group and Coyote Logistics, which was purchased by UPS in 2015 and employs more than 1,300 people in Illinois.
“With the ability to deliver products to half of the US population within a day, it’s no wonder Illinois is considered to be at the heart of U.S. logistics. It connects both the east and west and north and south,” noted JRC Dedicated Services Company.
The emerging logistic technology industry is showing tremendous growth throughout the country. A recent report showed that capital investment in logistic tech companies in the Chicago metro area alone skyrocketed 800 percent from 2019 to 2021, making it one of the area’s fastest-growing verticals. Among the more than 100 logistics tech companies that have recently opened headquarters are Loadsmart, which moved from New York to Chicago after raising $90 million, and project44, a leading supply chain visibility platform that is valued at $2.7 billion.
“We are proud to call Chicago home because of its deep bench of logistics talent and heritage as a hub of supply chain technology,” said Jett McCandless, Founder & CEO, project44. “We know we’re at an advantage with our close proximity to investors, global Fortune 500 companies and other influential supply chain innovators.”
It takes a powerful ecosystem for these companies to thrive and programs such as 1871’s Supply Chain Innovation Lab that brings together early-stage founders, growth-stage companies, corporate partners, VCs, and industry leaders to network, collaborate and solve challenges in the industry.
The Future Is Bright For Tdl
With supply chain disruption impacting the world, the role and presence of the TDL industry will continue to grow, and companies within the industry need to evaluate the best place for that growth. Out of 396 significant business expansions or relocations in Illinois in 2022, 177 (45 percent) involved transportation, distribution and logistics. By 2026, the TDL industry in Illinois is expected to add 28,000 jobs (a 9.04 percent increase) and 44,000 by 2031 (a 10.75 percent increase). For companies looking to grow their TDL operations, there is no better place than Illinois. For assistance finding the best location for TDL growth, visit intersectillinois.org.