Industry Spotlight LOGISTICS
Three Class 1 railroads make North Texas a
premier logistics distribution hub.
business in the area.
North Texas is considered to be in a
particularly advantageous location because
it is directly east of the Southern California
ports where most of the Asian goods pass
through. As imports arrive from Asia, the
region’s intermodal facilities are the first to
be reached by rail after shipments leave the
West Coast. North Texas has more efficient
and less congested transfer points compared
to other intermodal routes in the U.S., such
as Chicago, and has proven to be a more
cost-effective location to do business.
According to Dr. Terrance Pohlen,
director for The Center for Logistics
Education and Research at The University
of North Texas, the logistical assets of the
region allow businesses to quickly and easily
plug-and-play into the global supply chain,
enabling them to reduce time-to-market
and costs, while increasing their ROI.
Operating from an efficient logistics hub
is both a competitive weapon and an
advantage for most businesses, because
when a company can respond quickly to
market demands, they are more likely to
stay ahead of the competition.
“When you look at what drives value
for a firm, it’s the cost of items and how it
affects sales,” he said. “Taking advantage
of the intermodal hubs of the region lets
companies easily move freight from point A
to point B, reduce transportation costs, and
get products into the market more quickly.”
The revenue implications are enormous
when a business has the ability to take
advantage of intermodal, he added.
“When I can respond to the market
10 days faster, that means if demands are
changing or product is selling fast, I can
respond that much quicker. Using
intermodal rail rather than going through
the Panama Canal, Houston and then
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Dallas,” he said, “shaves off anywhere from
one week to 10 days. Ten days for consumer
goods is huge because it’s then tied up as
inventory and companies will then have to
absorb the cost; and they also don’t have the
ability to respond to the market as quickly.”
A Centralized Location and Mild Climate
The North Texas region is cost competitive,
and from an ROI perspective, it also serves
a beneficial purpose due to its central
location. Companies are finding that by
having logistics operations in this area, they
don’t need a distribution center on both
coasts. Instead, their Dallas-Fort Worth
operations facility can be conveniently
utilized for the entire country, which is a
huge, cost-effective benefit for businesses,
according to Pohlen.
“Location is always critical to the
success of intermodal facilities,” said Kelly,
whose company has made a capital
investment in Texas of more than $1.5
billion. “Union Pacific has made capital
investments in our rail infrastructure to
ensure we have the capacity to meet our
customers’ requirements. Both [Dallas hubs]
are also located in areas where we have easy
access and can take advantage of our
interstate highway system, and we are
currently expanding our Mesquite facility to
meet the growing demands for our domestic
intermodal services.”
Expansion seems to be the key for
BNSF as well. Van Cunningham, AVP of
Economic Development for BNSF Railroad,
says the DFW area is primed for growth, and
his company is preparing. “BNSF has been
acquiring land for industrial development
over the past several years, and we have 350
acres for future use. As a key partner in the
growth of this region, this is an investment
we’re making in the future of this area.”
And location is a great advantage of
being here, he went on to add. “If you’re
going to pick a couple of places in the U.S.
to be located, this area should be one of
them. You have the ability to get west and
east, and north and south pretty easily
because of our central location.”
However, when taking into account the
area’s centralized location, companies must
also consider the fact that North Texas
equates to no immediate seaport access. But
although the area may not be anywhere near
the ocean, for businesses considering the
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