industry news

The Best Logistics Locations
Karim Khan of Business Facilites

Atlanta, GA - 3/10/2005 - According to the non-profit Material Handling Industry of America (MHIA), logistics can be defined as the "movement, protection, storage, and control of materials and products throughout the process of their manufacture and distribution, consumption and disposal."

Moving goods around the world and finding ways to make that process more efficient is big business, and it's growing fast. Within the U.S., the business of providing material handling equipment and solutions is at least $60 billion, according to the U.S. Department of Commerce. Producers of these systems and equipment-which include supply chain management services and software, as well as the physical machinery required to convey and sort inventory-employ over 300,000 workers in the U.S.

All of which points to the fact that if your company needs to efficiently distribute goods, you're part of a huge market faced with a lot of decisions. Before you wade through all the software and equipment, you've got to decide where in the world you want to be. Nearly every location you'll visit will claim to be an ideal hub for distribution, and depending on who and where your customers are and what you budget is, any of these locations has the potential to be the perfect fit. But we wanted to know, all other factors being equal, which locations are most favored by those with experience as sites for logistics, warehousing, and distribution?

To get an idea, we asked a cross section of location consultants, real estate professionals, and site selectors which places in the U.S. and throughout the world made the most sense for your logistics operation. What we found is summarized in the chart above (for North America) and to the right (outside the continent).

Each respondent in our survey provided up to five choices for his or her favorite logistics centers, ranked in order. We assigned a point value to each selection (five points for a first place choice, down to one point for a fifth place vote), and used the totals to compile our final list. We've provided not only the winning states (or countries in the case of our non-North American ranking), but the most-often selected cities within each state or country.

Crowning the domestic ranking is the state of Georgia, led by Atlanta and followed closely by Savannah, GA. Texas was a near second to Georgia, with the Dallas/Fort Worth area leading the vote tally inside the Lone Star State, and Houston tying with Laredo, TX and Odessa, TX for second. (Please note that it's not possible to directly compare cities across state lines using this survey.)

What made Atlanta stand out in the mind of so many of the professionals we canvassed? According to the Metro Atlanta Chamber, it's an active commitment to improving conditions for logistics businesses in the city.

For example, last year the chamber organized a task force to make recommendations on growing the logistics industry in Atlanta. A Logistics Industry Council is being formed to implement the task force's recommendations, and the chamber recently hired a new vice president to focus solely on the logistics industry for the city.

There are other reasons that Atlanta does well in this ranking. Georgia Tech's Logistics Institute provides a supply of new thinking and ideas for the industry, and leading logistics companies such as Delta Air Lines, Manhattan Associates, and UPS use Atlanta as a base for their evolving logistics operations. More than 2,000 metro Atlanta companies provide logistics services, employing 80,000 people and paying average annual salaries of greater than $50,000. The chamber has set a goal to increase logistics employment in the region to 100,000 by 2010.

Like other busy cities, Atlanta will have to solve its road traffic congestion, develop an air cargo strategy, create a regional plan to facilitate freight movement, and make logistics a priority for the state's economic agenda if it is to meet its goals. Some of the city's fiercest competitors, according to the chamber, are Miami, FL; Dallas/Ft. Worth and Houston, TX; Charlotte, NC; and Chicago, IL. While a ranking such as this will never be able to trump the importance of being close to your customers (i.e., if all your shipments go the West Coast, Georgia may not be your best bet), we hope it will give you an idea of what the current thinking is among professionals in the know.