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Hub sweet spot

By Denise Trowbridge
From the March 2014 issue of Columbus CEO

The Rickenbacker Inland Port, which includes the Rickenbacker Airport and the Global Logistics Park, is the epicenter of a focused effort to transform Columbus into a cutting-edge hub for the logistics industry, and to boost the cargo coming in and out of the area. After years of construction work and roads lined with orange construction barrels, the burning question is, is it working? Signs point to yes, but the answer isn’t that clear cut.

Between January and October 2013, air cargo into Rickenbacker was down about half of a percent compared to the same period in 2012, while 2012 ended with cargo volume up about 8 percent compared to 2011. Those numbers aren’t always good predictors of growth trends.

“Air cargo is a very small percentage of overall activity that moves through here. We use it as a key metric, but Rickenbacker is a niche facility and it’s difficult to predict (cargo) trends” in part because supply chain disruptions in other cities can lead suppliers to divert more cargo here, said David Whitaker, vice president of business development for the Columbus Regional Airport Authority, which oversees Rickenbacker. “Volumes can go up or down unpredictably.”

Cargo coming through Norfolk Southern’s Rickenbacker Intermodal Terminal appears to be on a steady upswing though. In 2012, approximately 150,000 cargo containers were moved through. About 180,000 were expected to go through in 2013, according to The Business of Ohio magazine.

Some companies say the many road and rail improvements have already boosted business. ODW Logistics has landed new clients as a direct result of the many road and bridge projects near Rickenbacker since 2010, said spokeswoman Sara McKinniss. Changes to Alum Creek Drive “really opened up traffic and allowed people to find and get to our facility more easily.”

Improvements to Alum Creek Dr. and Groveport Rd. involved directing truck traffic north of the airport onto I-270 and construction of a flyover bridge and two roundabouts on Groveport Rd., at a cost of about $17 million, according to the Ohio Department of Transportation. The airport authority said the changes increased the road’s capacity to 85,000 vehicles each day. About 51,000 vehicles per day passed through the intersection in 2010.

The Norfolk-Southern’s intermodal terminal has also helped them draw business. “It was a key factor for one of our most recently-acquired customers. They selected us over Indianapolis because of that,” McKinniss said. Improvements at Rickenbacker, combined with intermodal capabilities, “have allowed us to attract (West Coast) customers who wouldn’t have necessarily cared about Columbus.”

Because of this, the company reopened an old gate in a previously unused area to new traffic. ODW also plans to expand this year, adding warehouse space at Rickenbacker to meet customer demand for space in the area, McKinniss said.

Alum Creek Drive and the intermodal rail yard are only two of many projects to boost capacity at Rickenbacker. Work began in 2010 to expand Rickenbacker Parkway from two to four lanes to create easier north-south access to I-270, the Pickaway County East-West Connector and State Route 23. The last phase, for $14 million, should be finished this year.

The Pickaway County East-West Connector is a roughly four-mile stretch of road being widened to improve truck access to the Rickenbacker Global Logistics Park, the Norfolk Southern intermodal terminal and State Route 23. The work, which includes construction of a bridge over railroad tracks over Duvall Rd., as well as lane-widening along Duvall Rd. to Rickenbacker Parkway, State Route 23 and Ashville Pike, should be finished this year. The project is expected to cost about $44 million.

All of the projects have been funded by multiple agencies, including the Ohio Department of Transportation, Norfolk Southern Railroad, the Mid-Ohio Regional Planning Commission, the Airport Authority, as well as federal funds.

Yet these multi-year investments in roads and rail terminals weren’t necessarily designed to move Columbus to the top of the logistics industry. We’re already on top, said Jeff Zimmerman, director of the Columbus Region Logistics Council. “It’s not like we have passed through a gate. Columbus was already a logistics hub, and always has been.”

It’s just a function of geography, Zimmerman said. Columbus just happens to be in a “geographic sweet spot,” within a one-day truck drive, or about 500 miles, of some of the densest population centers east of the Mississippi. Columbus is close to about 50 percent of the U.S. population and 33 percent of the Canadian population, as well as to manufacturing facilities.

Yet that isn’t enough anymore to lure in the portfolio of businesses, such as trucking companies, warehouses, distribution centers, manufacturers and retailers needed to sustain Columbus’ title as a logistics hot spot. The same case could be made for Indianapolis, Louisville, Pittsburgh and any city within that triangle. “The question then is how do we continue to evolve and compete to remain a key logistics center in the Midwest?” said Matt McCollister, vice president of economic development for Columbus 2020.

One key is to make getting around fast and easy. “If your operation has 100 trucks a day running through, if they all sit in traffic every day on the way to and from a site, it adds up,” as far as fuel, time and overall costs, he said.

Rickenbacker upgrades were designed to accommodate today’s traffic and future increases and reduce congestion. “We’re trying to stay ahead of the demand curve,” Whitaker said.

Organizations such as the logistics council and Columbus 2020 point to the businesses moving into the area as signals that infrastructure projects are paying off. For instance, yoga-apparel company Lululemon inked a deal for nearly 300,000 square feet of warehouse space at Rickenbacker in December.

Local logistics companies say upgrades have brought other benefits. “All the improvements have made it easier to get our job done. It’s brought more trucks here, and we can work with more carriers. (Truck and rail) capacity has opened up, and the rates are more competitive,” said J.J. Rodeheffer, co-founder of Zipline Logistics. “We see nothing but more freight coming through here in the future, because the Rickenbacker projects have opened up the opportunity for more capacity.”

For business leaders, wider roads, lower shipping costs and double-stack rail capacity are selling points they’re quick to mention to companies considering a Columbus location. “These improvements enhance our ability to say ‘hey, look what’s available here,’ but what they really do is help (Columbus) remain competitive,” Zimmerman said. “The absence of these sort of improvements could really subdue (logistics) growth.... When companies send site selection teams to visit our facilities, what they’re really doing is looking for arguments to eliminate us from the list. We can’t let that happen.”

Denise Trowbridge is a freelance writer.