Freight and Economic Development
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Freight and Economic Development

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Freight and Economic Development presentation for Roundtable in the Desert Oct 16, 2012

Freight and Economic Development presentation for Roundtable in the Desert Oct 16, 2012

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    Freight and Economic Development Freight and Economic Development Presentation Transcript

    • The Economy In MotionFreight Transportation and Facility Location DecisionsROUNDTABLE IN THE DESERTOctober 15-18, 2012
    • ABOUT USCWS Consulting Group and Investment Consulting AssociatesComing together as one global team Locations in: • North America • Latin America • Europe • Asia Services: • Corporate Location Selection • Incentives Negotiation • Investment Advisory • Economic DevelopmentReal estate is a strategic asset. Each and every new location decision carries cost, workforce, andother implications. We provide our clients with the insight needed to quickly build solutions whichare flexible enough to evolve with the company’s changing needs. ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 1
    • The Economy In MotionFreight Transportation and Facility Location Decisions Freight Movement Basics Selection of Freight Facility Locations Public Sector Role Best Practices/Lessons Learned NCFRP Report Documents ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 2
    • LOGISTICS AND FREIGHT FACILITIESMoving StuffLogistics:The detailed coordination of a complexoperation involving many people,facilities, or suppliesFreight Facility:Facilitates the movement of goods andmaterials from point of origin to pointof consumption • Warehouse and distribution facilities • Ports, airports, and other intermodal connections • Manufacturing and industrial sitesFreight Facilities are the transition points inthe Logistics Supply Chain 3 ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 3
    • WHY DOES FREIGHT MATTER?Freight is the lifeblood of the American economy Domestic and International Trade Raw materials Finished products Consumer goods ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 4
    • WHY DOES FREIGHT MATTER? Over 60 million tons of freight moves through the U.S. freight transportation system daily, representing roughly $40 billion in goods Trade is increasing as a share of US GDP – from 10% to 30% over past 40 years Processing of freight and intermediate processing represent economic development opportunities in jobs and investment Efficient movement of freight lowers costs, allows the best use of our transportation facilities, protects the environment, and reduce energy requirements ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 5
    • OBSTACLES TO GOOD FREIGHT POLICY Lack of regional cohesiveness Incomplete understanding of the role of freight facilities in the economy Misunderstanding of the community’s role in the global/regional/local transportation network Lack of coordination among planning, economic development, and transportation agencies Lack of public/private coordination ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 6
    • The Public and Private Sectors view the world through different lenses; neither sees the full picture Neither the public or private sector respondents believe that public officials have an adequate understanding of freight operations or business drivers Private respondents have dropped communities who did not plan for transportation infrastructure, or their policies did not adequately accommodate freight facilities Three-quarters of private respondents said they would recommend guidance in the form of inventories of industrial sites; tax incentives for freight distribution businesses; industrial rail access programs; and expedited permitting processes. 69% of public respondents have encountered compatibility issues in siting freight logistics facilities ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 7
    • ISSUES, OPPORTUNITIES, AND CHALLENGES Economic development contribution of freight facilities (to both freight and non-freight activities) Freight facilities role in intermodal connectivity and encouraging use of non-highway modes for long-haul goods movement Land use conflicts and pressures with competing uses and size of facilities Coordination among economic development and planning agencies at local, regional and state levels Private sector typically drives site selection and participation is a requirement for success ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 8
    • What is a Freight Facility? Distribution Centers Ports Intermodal Terminals Bulk or Transload Terminal Hub Terminals City Terminals Integrated Logistics Centers 9 ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 9
    • DISTRIBUTION CENTERDistribution Centers (DCs) take several forms;All of these store and facilitating the movement of goods. ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 10
    • PORT (SEA AND AIR)Ports are key facilities for domestic shipping as well as the importing andexporting of goods, providing interface from air and sea to rail and road. ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 11
    • INTERMODAL TERMINALIntermodal terminals allow forthe movement of trailers andcontainers between modes(marine, rail, and truck) ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 12
    • BULK/TRANSLOAD TERMINALAllows for receiving and distributing for lumber, grain, concrete,petroleum, aggregates, and other bulk products. 13 ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 13
    • HUB TERMINALA Hub is a carrier-operated facility that allows for re-sorting and re-consolidation of freight between city destinations ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 14
    • CITY TERMINALA city terminal focuses on intramodal (e.g., truck to truck) sorting andconsolidation, as well as the management of pickup and delivery servicesto customers. ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 15
    • INTEGRATED LOGISTICS CENTERIntegrated Logistics Centers are industrial parks or mixed usedevelopments specifically constructed around high performance freightservicing facilities. ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 16
    • FACILITY PLACEMENT & PRIORITIESFreight Facilities site selection is overwhelmingly made by the privatesector  Locations fit in a network fulfilling a business process  Network optimizes business drivers to serve a market franchise  Location process is expression of network strategy Freight Origin(s) Destination(s) Facility X 17 ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 17
    • LOCATION PROCESSThe Location Process allows for progressive testing and narrowing ofalternatives based on business drivers Field Validation Final Negotiations Planning and Network Location and Strategy Modeling Screening Location Selection Cost ModelingDefined Strategy Universe of Short-List ofand Evaluation Criteria Location Candidates Location Candidates Preferred and Alternate Location(s)©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 18
    • KEY LOCATION CRITERIA Ability to Access Key Markets or Customers Interaction with Transportation Network Labor and Workforce Increasing Total Cost Environment degree of importance Availability and Cost of Suitable Facilities Utilities Permitting and Regulation Tax Environment Public Sector Assistance and Incentives Climate and Natural Hazards©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 19
    • FACTORS BY FACILITY TYPE©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 20
    • …AND THESE FACTORS CHANGELogistics is (by its nature) a dynamic field. Several factors are currently makingcompanies re-think their facility strategies Global factors Trade patterns Price of oil Global facilities (e.g., adding the third, wider channel to the Panama Canal) Trends Just in time delivery Sustainability Carbon footprint concerns ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 21
    • PUBLIC SECTOR GOALSDevelopment in concert with communityvision….Accrue Public Benefit Revenues JobsAvoid, Minimize or Mitigate Impact Transportation Environmental Cost Controversy ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 22
    • PUBLIC SECTOR STRATEGYLearn More About Logistics Understanding of freight location drivers = ability to plan effectively Understanding of community outcomes (both positive and negative) can lead to higher quality decisions Questions to ask • Where does my community lie within the freight network? • Which facility types and functions best match the location and characteristics of my community? • What strengths does my community have that help give us a competitive edge? • What are the benefits and costs? ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 23
    • PUBLIC SECTOR STRATEGYCommunicate Develop regional and local dialogue on the role of freight in planning, and economic development Educate and engage residents and the business community on costs, benefits, and goals for freight development ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 24
    • PUBLIC SECTOR STRATEGYPlan!!! Ensure strongly held and understood vision for local/regional development and strategies to convert that vision into reality Coordinate economic development, land use, transportation planning Identify appropriate sites and areas for freight facility development Build effective zoning, regulatory and incentive policies “Build it and they will come” is not an effective strategy ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 25
    • BRIDGING THE GAPNCFRP Report 13 – Economic and TransportationDrivers Impacting Location Decisions Inform the public sector about the complexity of the various facility types and the role they play Inform public-sector planners and decision makers about key criteria that the private sector considers when siting logistics facilities, Enhance the potential for successful projects. • Bring benefit to the community • Avoid impact to community • Serve private sector needs ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 26
    • THANK YOU Christopher Steele Chris.Steele@cwsgrp.com Chris@ic-associates.comNCFRP 23/Report 13 Website Telephone: 617-314-6527 www.freightlocation.org www.cwsgrp.com www.ic-associates.com www.locationselector.com www.icaincentives.com©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 27
    • CONTACT DETAILS – HEAD OFFICEInvestment Consulting Associates (ICA)H.J.E. Wenckebachweg 210 T: +31 (0)20 217 01151086 AS Amsterdam, The Netherlands F: +31 (0)20 462 3535 E: info@ic-associates.com W: www.ic-associates.com A New Generation in Strategy Consulting ©© 2012, CWS Consulting Group LLC 2012, CWS Consulting Group LLC 28