Rail service plays bigger role in DP plans | nnbw.com

Rail service plays bigger role in DP plans

John Seelmeyer

When Reno’s DP Partners scouted Illinois locations for one of its LogistiCenter industrial parks, it paid nearly as much attention to rail service as highway access.

That attention to rail service to DP Partners locations is likely to increase as the company sees a broad historic shift that will give greater importance to rail service in the logistics industry.

Given that privately held DP Partners is one of the nation’s 10 biggest private industrial developers, its view is worth a listen.

Here’s how Aaron Paris, executive vice president and chief operating officer of DP Partners, sees things: In an economy in which goods were manufactured almost anywhere in the United States and taken to consumers who lived almost anywhere, a logisitics system based on trucks and highways made sense.

But increasingly, the manufactured goods consumed by Americans are foreign- made.

They enter the United States at a relatively small number of ports Long Beach, Oakland,Tacoma on the West Coast, for instance.

That dramatically reduces the number of starting points on a logistics network, and rail makes sense to haul containers from ports to logistics centers close to metropolitan areas, where trucks can take over.

At the same time, the huge volume of imported goods arriving in intermodal containers is more than the nation’s road system can handle.

“They can’t put those on the highway.

It just can’t be done,” Paris said.

Add to that the delays caused by congested highways and the greater energy efficiency of trains a rail car can carry as much merchandise as the equivalent of four trucks and rail services becomes all the more attractive.

The final element, Paris said, is a newfound belief in customer service among railroads.

“They no longer sit there and act like utility companies,” he said.

Only about 6 percent of DP Partners’ properties across the United States currently are served by rail.

The company is so convinced of the rising importance of rail, however, that it expects that a full 25 percent of its properties will have rail access within three to five years.

The Illinois property is a good example.

Located 65 miles west of Chicago, the LogistiCenter at Rochelle

“LogistiCenter” is DP Partners’ brand name for its logistics parks is served by Interstate 88 and Interstate 39.

But equally important, the park is served by mainlines of both the Union Pacific and the Burlington Northern and Santa Fe railways.

The two railroads cross at grade level at only place in America Rochelle, Ill.

The city of Rochelle, meanwhile, built a short-line railroad that connects the UP and BNSF.

That will allow tenants of DP Partners’ LogistiCenter to play the two railroads against each other as they negotiate rates.

LogistiCenter at Rochelle also is near a new, 1,200-acre intermodal facility that the UP expects to complete by August.

That facility will have the capacity to handle 350,000 intermodal containers.

The Reno company’s development in Illinois ultimately will include 5 million square feet of industrial and manufacturing space.Work is beginning with a 500,000- square-foot speculative building.

The Illinois development is DP Partners’ third LogistiCenter project.

At Harrisburg, Pa., the first 805,000- square-foot building in a LogistiCenter will be completed this summer.

That project is planned for 3.2 million square feet at build-out.

At North Las Vegas, DP Partners broke ground in January on a project that will include seven speculative buildings totaling 1.97 million square feet.