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For companies that import goods to deliver to retailers or consumers in the U.S., there are many locations, steps and transportation modes at play. In Part I of this series on transportation, published in CREATE’s Winter 2025 issue, we provided an overview of logistics, supply chain and intermodal, the transfer of products involving multiple modes of transportation (generally, air, rail, truck and sea).
In this article, we take a deeper dive into the process of transporting goods and look at how some states and cities are bringing greater efficiency to the process, and attracting business, by encouraging the development of logistics supply hubs.
Imagine you work for a company that transports goods from Shanghai. Whether or not you’re in charge of the logistics, as a real estate professional, you must be aware of the process because a company’s distribution and real estate needs are linked. The transportation steps might include:
- Procuring the shipping company from Shanghai to Long Beach, Calif.
- Making an appointment for the ship to dock at port
- Making an appointment for the containers to be unloaded
- Scheduling the rail company for pickup of the product and delivery to your building, or to a temporary holding warehouse, or to a customer’s facility
If the company needs to meet a guaranteed delivery date, that may mean arranging truck pick-up directly from the port. Rush delivery from Asia requires air cargo to the nearest airport, plus trucking to the end-user’s building.
Logistics Hubs: One-Stop Shops
The work required to bid out and schedule transportation services in various parts of the world to meet scheduled delivery for customers is time consuming and costly. One solution to be more efficient is to hire a company that will handle these transportation issues. These outside companies are known as third-party logistics, or 3PL, companies—a topic for another article.
The other solution is to find all the transportation services in one location, a so-called logistics hub, typically a collection of industrial buildings with infrastructure that encompasses at least three of the four intermodals.
A typical logistics hub is a minimum of 1,000 acres—some hubs are as large as 2,000– 3,000 acres or more—preferably with a flat topography. The land should be inexpensive with low barriers to development. Developers look for such factors as ease of obtaining permits or entitlements and favorable tax status for potential tenants and purchasers.
Logistics hubs offer temporary storage for goods that are not ready for the next leg of an intermodal journey. A hub may also include a holding area for rail cars so that they can be immediately available for end users.
While there’s no data readily available on the prevalence of logistics hubs, in my experience they represent a growing presence in the market as companies become more sophisticated in their approach to logistics and supply chain. Whether your client is looking to buy, sell, lease or develop industrial or warehouse property, your knowledge can put you a step ahead of the competition.
- If you’re working with an end user—such as a local retailer or a national company such as Target or Best Buy—be prepared in the first site selection meeting to talk about whether a logistics hub is a requirement.
- If you are working with an industrial developer and the right pieces are in place, the recommendation may be to develop a logistics hub, which could give the development a critical advantage.
- If you are representing an industrial building in an area where you’re competing with a logistics hub, then you should know the marketing challenge you’ll have—but also know what tier of the industrial market you should be chasing. The market that’s attracted to a hub location may not be the market you should be going after.
It’s always the client’s decision. But if you can give your clients all the options and explain the pros and cons of each, you can help them make better real estate decisions.
The Advantages of Operating in a Logistics Hub
There are five basic advantages for end users who locate within a logistics hub:
- The hub will eliminate multiple stops as the intermodal is “under one roof.”
- The hub avoids multiple unloading and reloading of products.
- One-stop shopping creates more efficiency in the distribution of goods.
- Efficiency creates savings, and thus the ongoing expense of operating in a hub location is likely to be less costly.
- The hub provides quicker delivery time, allowing your industrial clients to meet their customer delivery guarantees.
Developing a Logistics Hub
Not every market is physically suitable for a logistics hub. Developers generally need:
- Relatively inexpensive land to keep down leasing and selling costs.
- Low barriers for entry. Texas, for example, has more flat land and easier permitting than my home state of Massachusetts.
- A location that supports intermodal. To install an airport or rail line can take years, if it’s even possible.
A developer doesn’t necessarily need to construct a hub park with contained airport, highway or ocean access, as long as access is nearby. Logistx Hub Savannah is located within minutes of the Savannah–Hilton Head International Airport, the shipping port, and Route 95, a federal highway stretching from Maine to Florida.
The advantage to “co-locating” near intermodal infrastructure is that the developer may not need to find 1,000 acres. If the surrounding area can provide access to a port, highway, and rail or sea (or both), then the logistics hub may be delivered with less acreage. The hub size could be dictated by the square footage of buildings to be developed. Near the Port of Miami and Port Everglades in Fort Lauderdale, Fla., you’ll find examples of how the surrounding infrastructure allows logistics hub parks to be built on limited land.
For a broker, understanding your market— including the presence of logistics hubs and certified sites — gives you the credibility and professionalism clients expect.
