Is the midwest the best location for your distribution center?
That’s what Todd Yadzi of the 3PL TAGG Logistics thinks, and writes in this Operations & Fulfillment article, “DC Operations Why Midwest is Best”. His basic premise is that operations on either coast slow an entire supply chain down and increase its costs. Part of this comes from the proximity issue (I suppose he’s thinking that you would spend more on a coastal DC’s for each coast than you would for one larger operation in the middle of the country). It makes sense in that land, labor and utilities are less expensive down the center than they are near the larger urban centers. He believes that if you’re shipping from coastal ports to your facility, it still makes economic sense to move product inland due to the higher carrying and transportation costs.
Take that a step (and a few years) further: as the NAFTA corridor matures, you will see areas that align with it receiving larger and larger amounts of cargo, not only from Central America, but from other areas as the Port of Houston capacity grows. This is already happening, and all that growth will travel north from Texas and into the heartland.
Scott Stone is Cisco-Eagle's Marketing Director with three decades of experience in material handling, warehousing and industrial operations. He writes on automation, warehousing, safety, manufacturing and other areas of concern for industrial operations.