On the menu of Indiana’s economic development initiatives, the logistics industry has had all the appeal of truck stop coffee.
Meanwhile, the information technology and life sciences sectors—and recently clean tech—have had everyone salivating.
Logistics, however, is cooking up a new strategy. Twenty-seven of the state’s best minds in trucks, trains and warehousing
have been meeting for nearly a year to draw a roadmap for expanding an old sector still capable of substantial growth.
The group—the Logistics Council Executive Committee—plans to unveil its work this fall.
Leaders are focused on creating a list of proposed public and private infrastructure projects and public-policy recommendations
and developing logistics skills credentialing.
They also want to improve public perception and awareness of the industry.
"There are going to be some very significant ideas to come out of this," said David Holt, vice president of operations and
business development at Conexus, which is behind the effort and is the manufacturing and logistics arm of Central Indiana
One area being studied is what’s needed in the way of job skills and creation of a common job-skills curriculum, Holt said.
The industry has grown beyond the forklift to ever more complicated computerized tracking and routing systems. It’s also expanding
in Indiana; it’s expected to grow 20 percent in central Indiana alone over the next five years.
The logistics industry employs more than 250,000 people in the state, with an estimated 75,000 working in related positions
within manufacturing plants.
Logistics jobs pay on average 30-percent more than the state’s per-capita average income, according to Conexus. Many of the
more compelling jobs will be on the operations side of the sector, involving software systems and "track and trace" technologies,
such as radio frequency identification, or RFID.
The executive committee is also pinning down critical infrastructure needs. What, for example, can be done to ease the bottleneck
of truck traffic near Chicago? How can the state improve freeway access to water ports? Even deteriorating locks and dams
on the Ohio River are being considered as part of possible infrastructure fixes.
The logistics group also is compiling a list of promising intermodal sites. In places such as LaPorte County, for example,
officials are contemplating a facility that could ship to the East Coast biodiesel made by Indiana Flex Fuels in Kingsbury.
But the biggest buzz is the potential for the CSX rail facility in Avon. There’s lots of room to grow it to handle a larger
volume of train and truck operations. It can also process air freight from nearby Indianapolis International Airport.
Most of the freight from the West Coast moves through Chicago, in part because of its vastly larger commercial and industrial
base. But last September a rail route was opened between Los Angeles and Avon, via St. Louis. It came after intense lobbying
from Massachusetts-based retailer TJX Cos. and locally based Duke Realty to convince CSX and Union Pacific railroads to give
it a go. Duke has built many of the major warehouse distribution facilities around the region.
"These intermodal facilities—everybody wants one," said Charlie Podell, senior vice president of Duke’s Indiana industrial
business and a member of the committee.
Building a multimodal rail facility from scratch generally costs in the range of $250 million to $400 million, but Avon could
be expanded for a fraction of that cost, Podell added.
"The Avon yard is [already] there and the ability to use it more efficiently for the logistics world is really just huge."
Shippers in Louisville and other surrounding cities would prefer the Avon location to more distant and congested Chicago,
Unfortunately, Avon is still a tough case to make to railroads, which inevitably point to Chicago’s higher freight volume,
said Doug Williams, president of Indianapolis-based Venture Logistics and one of the executives on the committee. His company
maintains a freight facility in the Chicago suburb of Elk Grove.
On the other hand, some smaller cities in the region have managed to pull off big intermodal hubs, including Columbus, Ohio,
home of Norfolk Southern’s intermodal yard adjacent to Rickenbacker International Airport.
Podell argued that the region already benefits from a relatively low cost of labor compared with Chicago. That, along with
lower taxes and congestion, should translate into more efficiency for shippers.
Indiana is already a logistics lynchpin for a number of industries, such as wireless phones. Indianapolis-based Brightpoint
Inc., for example, programs and packages nearly 40 percent of the wireless phones sold in the United States.