Distribution, Logistics and Facilities
New facilities will cement Kansas City's place in the nationwide infrastructure for distribution and logistics—with more likely to come.
Just like Rodgers and Hammerstein’s song about June in Carousel, logistics in Kansas City is busting out all over. And 2013 stands as a watershed year for it, thanks to the formal opening of Logistics Park Kansas City.
This master-planned distribution and warehouse development sits on a rail line operated by BNSF Railway, the world’s leading intermodal rail carrier. It will allow companies to import or export goods, reaching customers across the U.S. The ultimate vision calls for this 558-acre inland port to serve 7 million square feet of warehouse and distribution facilities, nearly half of that targeted for rail shipments.
Aiming for a fourth-quarter 2013 opening, the railroad has partnered with NorthPoint Development and NAI Capital, along with the city of Edgerton, state of Kansas and the Southwest Johnson County Economic Development Corp. to bring the logistics park to life. Companies operating there will be able to access BNSF’s network of 32,000 route miles of track covering 28 states and two Canadian provinces.
Aligning with the right rail partner was important, said Colliers International’s Ed Elder, because “BNSF is the gold standard, a class Tier-1 line out of ports in Long Beach and Southern California.”
The presence of the park will increase the region’s appeal as a center for logistics, realty executives say, with the likely result being construction of more large-scale warehouse and distribution facilities. Earlier this year, Kessinger/Hunter & Co. completed development of the first large spec building the region has seen in years—800,000 square feet—at I-35 Logistics Park in Olathe, just seven miles away from the BNSF facility. It plans to build two others there.
They will meet what realty professionals say is a desperate need for warehouse spaces of at least 100,000 square feet, designed to accommodate the emergence of mega-retailers, whether brick-and-mortar or on-line.
“Wal-Mart is not a retailer; they’re a logistics company,” Elder said. “How do we squeeze time and money out of the supply chain? Amazon, if you pay attention to what they’re doing, you can be on the phone and order something and have at your door tomorrow. They’re out building these mega-distribution centers around the country, these 1 million square-foot centers that allow you to order as late as 4 o’clock and have it at your doorstep at a reasonable time the next day.”
Where does Kansas City fit in that calculus? Within a two-day drive time, a distributor here can reach 80 percent of the U.S. population. That’s why BNSF and others are investing here. An intermodal park’s success is based on number of containers that the user needs or has coming in.
“If you’re the standard XYZ Widget Co. and you use 100 containers a year, BNSF is not important to you,” Elder said. “But if you’re Coleman Co., with 1 million square feet in Gardner, you need 16,000 containers a year. For that kind of user, you need to be close to the intermodal.”
In addition to the BNSF facility and I-35 Logistics Park, the region sports the CenterPoint–KCS Intermodal Center, a 1,340-acre intermodal and warehouse facility in south Kansas City, designed to handle over-the-road and rail shipments into Mexico. And to the north, the 800-acre KCI Intermodal BusinessCentre abuts Kansas City International Airport. The first phase of its 182 acres includes 1.8 million square feet of warehouse and distribution centers.
Kansas City’s distribution advantages don’t stop there. Northland Park, a 2,200-acre intermodal facility operated by Norfolk Southern Railroad, includes the Musician’s Friend distribution facility—more than 700,00 square feet in itself, and capable of expansion to 1 million square feet. FedEx, Watkins Motor Lines, TNT Logistics and WW Grainger also have facilities there.
The region is also home to the nation’s largest underground warehouse and distribution center, SubTropolis Kansas City. Used by firms looking for environmentally controlled and ultra-secure facilities, the 55-million-square-foot SubTropolis covers 1,100 acres.
Development of each of these large facilities is evidence that Kansas City’s cost-saving centrality and network of interstates is recognized by both national and international businesses. 