NTX Magazine Volume 1 - Page 17

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 www.ntc-dfw.org 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 North Texas Magazine 15