The I-69 Regional Summit was held in Bloomington on October 20-21, providing Indiana’s economic development community with an excellent opportunity to discuss strategies for leveraging the new interstate to promote economic growth.
The speakers at the Summit contributed a number of interesting insights, many of them pertaining to opportunities to develop logistics capacities in a region that previously, because of the lack of an interstate, would not have been considered viable for many logistics operations.
Tim Feemster from Foremost Quality Logistics identified a combination of factors affecting logistics site selection including; rising transportation costs; E-commerce (“the Amazon effect”); shortages of qualified truck drivers; near-shoring/reshoring; and reduced costs through greening the supply chain. In particular, higher fuel prices are causing businesses to shift toward increasing rent and labor expenses at more distribution sites and away from a model based on fewer distribution sites and longer trips. New reduced hours of service requirements for drivers are also leading to a shift toward more dispersed distribution sites. He noted that on average, transportation costs amount to around 60% of total logistics costs.
Feemster also identified multiple ways that developers of logistics centers are using green technology to reduce costs at logistics centers including high efficiency lighting, which can reduce energy costs by two-thirds. He also noted that hydrogen fork lifts are in-demand and that sales of natural gas trucks rose dramatically from 2013 to 2014.
On the Site Selection breakout panel, Kelsy Benckart from Stonebelt Freight Lines spoke about the shortage of truck drivers that is driving up transportation costs. She also noted the need for adequate truck parking facilities along I-69 and stated that communities that don’t provide them risk higher shipping rates. At the same panel, Dave Harstad of Summit Realty described identified the necessary characteristics of industrial buildings to suit particular industrial users.
The challenge for those in Southwest Central (SWC) Indiana will be to take this information on cutting edge practices in logistics and use it to the region’s advantage.
The payback for building logistics capabilities are not only in the jobs created at trucking companies and within warehouses, but also in the creation of a “positive feedback loop.” Logistics assets create a “positive feedback loop” because as more assets come online within a region, warehousing and transportation options increase for regional firms, leading to more efficiencies. These efficiencies then induce more firms to the region, leading to further efficiencies.
Despite the promising opportunities for building logistics capacity in SWC Indiana, Tim Feemster also provided Summit attendees with an important, if sobering, reminder that having a freeway doesn’t guarantee success at attracting new business and industry – it only puts the region on par with many other regions. This observation was consistent with his larger theme that site selection is done by process of elimination, and it is the absence of major weaknesses which allows a region to survive the site selector’s process of weeding out competitors.
Indiana University’s Office for Engagement was well represented at the I-69 Summit. Kirk White, Assistant Vice President for Strategic Partnerships served as the Co-Chair of the Summit, which brought over 350 people to Bloomington. And IU’s Vice President for Engagement, Bill Stephan introduced the Summit’s afternoon keynote speaker, Becky Skillman, President and CEO of Radius Indiana.
More information about the I-69 Summit is available here.
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