Sketchy Decision?

A recent newsletter from the publication Area Development Online included a link to a blog by a supply chain consultant which had an interesting take on something we in Chicago have known for some time, but isn't always recognized.

Logistics, Geography & Demographics for Californians and Other Foreigners

Occasionally, as with this blog, one reads of distribution centers in seemingly illogically located spots - tucked away in some far corner of the nation, as opposed to a central point close to most major markets with a large and well developed distribution infrastructure and - critically - expertise…like one particular city that comes to mind.

Waddell's blog takes a somewhat tongue in cheek approach to the same issue, but the point is a serious one. When looking at the US, or North America, as a market the most efficient approach tends to be a port to rail transport with truck distribution from that point. Waddell points up the fallacy in setting up peripheral distribution points. Certainly, there are cases in which companies are only marketing to one corner of the US, or decide to have multiple distribution centers, but as Waddell points out so well, there are national-scale centers that have gone into some odd locations.

Sometimes inertia is to blame; years ago, for example, planes coming from South America with relatively limited range touched down in Miami, laden with flowers for the US market. Today, trucks still head north from the far end of the Florida peninsula to deliver fresh flowers (with a limited shelf life) days by road north to various national markets. Today, that cargo could fly directly to Chicago and reach most target markets much more quickly. So the concept of distribution from here has been raised, and requisite local infrastructure is being evaluated.

Waddell does not address one other aspect of the issue: surprisingly, some companies, particularly from relatively compact nations, are not always fully conscious of the distances involved in the North American marketplace. This has very real consequences for location on transportation costs and logistics, not to mention transportation costs involved in moving product from out-of-the-way plants. I've had to set straight visitors arriving with plans for an afternoon drive from Chicago to the Gulf or East Coast. And that’s just the Californians (kidding).

That's part of what we are here for – bringing in jobs and investment by providing accurate information in telling the Chicago story.