Published Dec. 19, 2012
CHARLOTTE, N.C. — Interest in developing inland ports is rising as U.S. manufacturers’ export volumes abroad grow.
A white paper by Jones Lang LaSalle, a financial and professional services firm specializing in real estate services and investment management, found that manufacturers are re-evaluating their supply chains.
The Materials Handling Industry of America, which reviewed the report, noted that exports have accounted for half of U.S. economic growth since the Great Recession’s end, topping $2.1 trillion in 2011.
“Although the number of U.S. manufacturing jobs have been steadily declining over the past 40 years, output per employee is sharply up. And, by export volumes, the numbers are healthy,” MHIA said.
The paper said some 40% of chief supply chain officers are seeking to alter their entire domestic supply chain network and 34% are changing their international supply chain network.
“Developers, investors and communities able to address U.S. cargo exports, will find greater ability to attract transitional distribution centers and third-party logistics users to their projects,” the paper said. “Inbound cargo containers can then be better matched with export/outbound cargo, resulting in greater profitability for all concerned.”
The port would improve the efficiency of container movements between the Port of Charleston, the Upstate region and South Carolina’s neighbors, the ports authority said.
“The fact that the port will operate the facility provides an extension of our Charleston facilities into the hinterland, not dissimilar to the development of the Virginia Inland Port in Front Royal, Va. some years ago,” said Jim Newsome, president and CEO of the ports authority.
The MHIA said key factors driving the movement toward inland ports include:
- Rail freight costs are on average one-third of trucking costs.
- Rising U.S. exports are prompting many to re-evaluate existing supply chain networks, which are historically import-centric.
- Rising fuel prices are leading to a rise in intermodal and rail as an alternative to trucking.
- Of the goods exported, several industries are reporting expansion, including medical equipment, pharmaceuticals, automobiles, energy products, agricultural, mining and oilfield equipment.
- The high volume of empty shipping containers traditionally sent back to China provides an opportunity for exporters to obtain favorable shipping rates on common cargo vessels. Technical and logistical improvement have made this a viable alternative for producers of time-sensitive goods, such as agricultural products.
- Critical to financial success is the proximity of intermodal hubs that can provide empty containers to manufacturers and smooth, quick intermodal transloading and rail shipment to seaports.
- The biggest export growth is in emerging markets such as Latin America (up 17%) and China (up 12%).
- As key access points to seaports that provide cost-savings offered by intermodal rail, inland ports present an option for manufacturers.
- The agriculture industry will continue to be a major contributor to overall export volume from the United States, thereby providing a long-term user base for inland ports' outbound containers.