oximity to customers remains a key factor in site selection decisions made by providers of logistics and transportation services. One of the latest examples is TNT Logistics' new facility in Brownstown, Mich., which exclusively serves Ford Motor Co.'s new Dearborn
Truck Plant.
      TNT's 340,000-sq.-ft. (31,586-sq.-m.) facility is a US$7.7-million investment and employs about 120. TNT's operation is located just 14 miles (23 km.) from the Ford plant.
      Kerry Zielinski, TNT's manager of business development in Brownstown, says the company looked at four possible sites. Proximity was a key to the final decision, as was the ability to move into a new facility.
      "A new build allowed us to pick particular dock locations," Zielinski says. "We can reduce our labor if we can site docks in a new building."
      TNT runs two shifts, mirroring the Ford operation. It delivers a parts gamut ranging from engines to trim. More than 80 Ford suppliers send products to TNT, whose personnel transport materials to the plant in a scheduled, synchronized daily pattern, with each load designed to maximize space and minimize travel time within the plant.
      "Some products come in by the truckload and others arrive in small quantities," Zielinski says. "We do our own inventory independent of Ford so we know everything we have in the building. We are providing a service that sequences and meters material into the plant, and that allows Ford to keep a minimum amount of inventory line-side."
      TNT handles more than 1,700 part numbers through its center, with two dozen of the commodities sequenced into specially designed racks for line-side delivery to the truck manufacturing facility in correct build order.

      The U.S. business logistics system experienced a demanding year in 2003, according to the Council of Logistics Management's 15th Annual State of Logistics Report. Rosalyn Wilson, a transportation consultant who compiled the report, says shifts in global manufacturing, as the U.S. loses manufacturing facilities to low-wage countries, are "redrawing the landscape for transportation strategies."
      Charles McSwain, vice president, real estate, CSX, says global trade is highlighting the importance of multimodalism.
      "The logistics platform is under change because companies have optimized the use of current resources, which are largely truck-oriented, and in order to gain the next level of savings for customers, they are seeking to incorporate multimodalism," says McSwain, who serves as vice chairman of the Industrial Asset Management Council, an Atlanta-based association of corporate real estate executives, economic developers and service providers. "They are looking for better proximity to multimodals in order to afford the savings of rail or barge or other modes as part of their mix. That requires a shift in location in order to drive those efficiencies."
      McSwain says the ultimate destinations of consumer-oriented freight are already in place. The challenge is to align supply chains more tightly around multimodal infrastructure in given areas. He cites Atlanta as an example.
      "In Atlanta, there is transportation infrastructure spread all around the city, but in order to maximize multimodalism, there needs to be a more concentrated destination of traffic so the connection between modes doesn't cause the freight to be handled and drayed, only to be handled and drayed again. Atlanta and a lot of other cities are working on this."
      TNT's executive vice president, Mark Morrison, says global sourcing brings with it its sh are of potential pitfalls. Security and control issues are huge.

Council of Logistics Management www.clm1.org KC SmartPort www.kcsmartport.com TNT Logistics www.tnt.com/logistics CGR Management Consultants www.prosavvy.com/affiliates/cgr

      "Companies have to know who is sourcing their materials and keep track of their movement electronically," Morrison says. "If you make a couple of mistakes in the supply chain, it can more than offset the value of your sourcing. Companies need to balance the risks that come with global sourcing. If you have a failure, it can really get magnified.
      "Global sourcing is in its adolescence," he adds, "but it's picking up enormous momentum in relation to its importance to the whole discipline of supply chain management. The challenge is creating command and control activities necessary for global commerce."
      Morrison says the market is calling for shared networks where large facilities get divided into smaller chunks. Customers and users take control of that smaller activity to be a distribution point in a local area.
      "That's becoming more of a phenomenon as we roll out new logistics thinking," Morrison says. "A number of our customers have invited us to look at their existing distribution environment. A lot of our energy goes into the design of new networks that rationalize assets and consolidate into larger distribution centers. We often find that yields a value for our customers in terms of better control and better turns in their materials by having it in the right place."
      But Morrison says a lot of logistics remains the "blocking and tackling" fundamentals of warehousing and trucking. He says most of TNT's facility requirements involve dedicated facilities for the company's larger accounts and involve a variety of long-term leases. And he says one of TNT's core competencies is its relationships with some of the best developers in North America.
      "We clearly like to deal with facility providers that give us and our customers flexibility," Morrison says. "We have some excellent relationships with facility providers in the warehouse industry."
      Peter Crosby is a founder of CGR Management Consultants, a Los Angeles firm that advises clients on supply chain management strategies. He says more of his clients are becoming interested in consolidating their assets as a result of the rise of third party logistics firms(3PLs).
      "More than 10 percent of U.S. companies use third party logistics," he says. "Ten years ago, it was under 2 percent. More and more companies are outsourcing." Crosby says certain industries, such as frozen food manufacturers, seem to favor 3PLs.
      "It doesn't make sense for them to have an owned or leased distribution center. Frozen food manufacturers want to be able to consolidate into truckload shipments."

      Kansas City's central location gives it some natural advantages in the sector. It's the second largest rail center in the U.S. behind Chicago. Interstate 35 links the region to Canada and Mexico and is an important facilitator of NAFTA trade. And, Kansas City International Airport boasts the largest air cargo facility in the region. K.C. is also home to the corporate headquarters of two large motor carriers, Yellow Roadway and SCS Transportation.
      "Kansas City has historically been known as a transportation hub, and we continue to emphasize and focus on this strength, improving the city's ranking among Midwest cities in regards to logistics and transportation services," says Chris Gutierrez, president of Kansas City SmartPort, Inc.
      Big box retailers and "pure" manufacturers are the typical prospects considering the region for a new distribution center, Gutierrez says. One prime example is Target's 1.3 million-sq.-ft. (120,770-sq.-m.) distribution center in nearby Topeka, which will eventually employ 650 and serve Target stores in five states. The $80-million facility opened in mid-July 2004.
      The area also attracted Ameri-sourceBergen, the world's largest pharmaceutical services company, which is consolidating its Midwest distribution operations into a $40 million, 280,000-sq.-ft. (26,000-sq.-m.) facility in the city's Congress Corporate Center development. It will be one of the company's seven regional distribution centers and will employ about 180 when it opens in early 2005.
      TNT Logistics opened a new center in Brownstown, Mich., earlier this year. The facility is dedicated to serving Ford's new plant in Dearborn.