Location is not only about the address occupied by a 3PL facility or distribution center. One of the most important things to consider when choosing a 3PL is the city or market where it resides. Large ocean freight ports such as Los Angeles and New York provide great starting points when goods are imported, but having a quality secondary market is critical for successful supply-chain distribution.
Secondary Logistics Markets
Central locations in the United States allow us to ship to most customers quickly and conveniently. A shipment from Kansas City, Missouri can reach 80% of the US population within 48 hours of shipment! Centralized, inland markets also generally have lower storage rates than the large urban markets. As we discussed in our previous post, “More is Less”. By spreading DCs throughout multiple secondary markets, you will see increased efficiency and cost savings in storage, distribution and transportation. In 2012, Murphy added new facilities in Kansas City, Missouri, because one of our longstanding customers wanted a DC in a new market. We were able to set up a warehouse within months, which brought our client’s product closer to their manufacturers and wholesalers.
The benefits of rail shipping are no secret in the logistics industry. Inland markets make rail shipping easily accessible. Minneapolis is home to four Class 1 rail ports (CP, CN, UP, BNSF). Kansas City is home to five Class 1 rail ports and also has access to the CSX line through the Central Midland Railway short line. Kansas City is also the headquarters for the Kansas City Southern Railway which runs from Kansas City, Missouri to the Gulf of Mexico.
Just because a location is inland, that doesn’t mean that it loses access to water. Barge shipping is available through the river system and Great Lakes. Because the Louisiana ports are some of the busiest in the United States, barges heading North on the Mississippi River are common. Although barges move slower than truck or freight shipments, they are extremely efficient and sustainable. One barge can hold as much as 16 rail cars or 70 truck trailers reducing the amount of trucks on the road, and greenhouse gasses emitted. Port KC is on the inland river system which connects the Upper Missouri River, the Lower Missouri River and the Mississippi River through 19 states and into the global trade system. Port KC is located near major international railroad intermodal yards of all six different class 1 railroads. Barges can get as far north as St. Paul, MN which is located near Class 1 railroads and within 10 miles of four Murphy Warehouse Locations. (PortKC.com)
Storage rates, transportation efficiency and shipping times to your customers are all extremely important factors when choosing DC locations. Having quality secondary markets in play can help you with shipments, storage rates and efficiency. Be sure to follow the blog for the next couple of weeks to learn more about how location can be one of the most important pieces to running a quality, efficient supply chain!
Have a wonderful day!