Regional Spotlight: Midwest

spotlight_on_midwestTeam DCA Shines a Spotlight on the Midwest Regional Market

In this issue, DCA President, Mike Holland of Midwest Warehouse, shares insights and information on the important regional market of Chicago, and we hear from industry experts on what’s happening and what’s next in manufacturing – including 3D printing!

Manufacturing’s next revolution

Source: Journal of Commerce

These days, the technology that has my full attention — and imagination — is “3-D Printing.”Also known as “Additive Manufacturing,”an object of virtually any shape can be manufactured from a three-dimensional model through aprocess that prints individual layers of material.  In addition to being waste-free as opposed to traditional machining,this revolutionary process has a seemingly endless diversity ofapplications.

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Chicago has always been considered a distribution hub of the Midwest Region.  Chicago’s central location, rail and expressway system is a popular site for most companies seeking to optimize their customer service and distribution cost. Midwest Warehouse’s business in Chicago has grown at a steady pace of 5% to 10% per year.  During the past 10 years we have grown from 2.1mm sq ft to over 5mm sq ft in 20 facilities.  Recently we have seen a tremendous increase in organic growth of existing customers as well as new inquiries.  We manage a nice balance of contract labor and multi-customer, traditional 3pl facilities.  80%+ of our current customers have been doing business with us for over 5 years.  Our long term relationships are directly due to the excellent service and personal management we provide each of our customers.  We work with over 300 customers who store from 50,000 pallets to 5 pallets.  We customize our service to fit each of our customer’s requirements no matter the size.

Are certain industries hit hardest or doing best – making news or on your radar because of economic impacts or recovery successes?

We service many types of customers, from non- hazardous chemicals and general commodities to e-commerce.  The two verticals we specialize in are paper and food.   We provide value added services to support both of these segments.  For paper customers we provide rail service facilities, clamp trucks and complete trucking delivery service thru our company’s own fleet, Bedford Motor Service.  We add value to our paper customers by operating a paper converting operation for roll stock and flat paper cutting to specific size based on customer order.  This is a very turnkey solution.

For the food industry we have racked most of our facilities, upgraded our WMS with state of the art pallet bar code scanning, lot code tracking/recall and EDI mapping to customers and retailers, and provided temperature control. Midwest Warehouse also provides Organically Certified facilities, FTZ Bonded space, and local/regional in-house transportation company with LTL, TL and Intermodal services.   Because we work with so many food customers we are able to provide significant freight savings to all points within the Greater Midwest region.   We are consolidating LTL freight daily based on “Requested Arrival Date”  to all of the retail grocers, drug chains, food service and mass-merchandisers.  We are quite familiar with the various receiving requirements and work with carriers who specialize in handling food deliveries with protective service year round.

How is Midwest Warehouse business?  Are certain market sectors or types of companies rebounding faster than others?

Actually, our company has experienced growth even throughout the recession.  As the economy has rebounded our business has really taken off, particularly in the last 18 months.  Fortunately the Chicago market is generally on or near the top of everyone’s “places to be” list within distribution networks.  We have an abundance of rail ramps to support inbound intermodal and box car traffic.  While the trucking rates have remained fairly flat and shortages of equipment have been predicted, we are able to schedule and handle shipments inbound and outbound on a timely basis.  We continue to sustain controlled growth with a very active sales pipeline.

Is there an initiative or new focus area you’d like to emphasize?

I’d say that our growth is due directly to the consistency of our service and the fact that we are asset based, owning a majority of our property in Chicago.  We definitely feel this strategy helps us to control our costs and provide savings to our customers.   The industrial real estate market in Chicago experienced the same depreciating effect as the rest of the country.  As a result, construction of spec buildings slowed significantly.  Currently we are experiencing the lowest industrial available vacancy rate in many years.  The inventory of “Big Box” warehouses is significantly down from 2007.

Final Thoughts

The name on the door matters only when it comes to reputation.  As I learned many years ago, you only have one reputation.  The only thing we have to sell is customer service.   Midwest Warehouse commenced operations 31 years ago with just 2 employees, our owners and brothers, John and Ed Borkowski. Theirbusiness ethic and philosophy of customer service has been conveyed to the 1000+ people who now work for Midwest Warehouse and our affiliated companies.  Without our dedicated employees we would not have enjoyed the success of 31 years of business and the foundation for a continued successful future.

People are the key!

A Look into Foreign Trade Zones”

(Source: Global Reach Blog posted on August 21, 2013, by Michael Simmons by rosannatorres

What are Foreign Trade Zones?

A foreign-trade zone (FTZ) in the United States is a geographical area, in (or adjacent to) a United States Port of Entry, where commercial merchandise, both domestic and foreign receives the same Customs treatment it would if it were outside the commerce of the United States.         See video briefing on Foreign Trade Zones

Why Foreign Trade Zones?

If you’ve thought about expanding your trade efforts, there are many advantages for using or operating a Foreign Trade Zone (FTZ). You can ship, store, assemble, or manufacture merchandise from FTZs. Zones also offer employment opportunities and stimulate trade. Using a FTZ offers relief from inverted tariff and duty exemption on re-exports and the cash flow cost savings will be of great value to your organization.

Data from Foreign Trade Zones

We collect information regarding Foreign Trade Zones from the EEIexporters submit. As you can see from Graph 1 , the use of FTZs for exports contributes significantly to overall U.S trade efforts, accounting for millions in revenue. In Graph 2 you can see the top countries of import that use FTZs to deliver a vast array of products and merchandise, such as automobiles, spirits, and confectionary are admitted into the U.S. Foreign Trade Zone.

US Exports have become the Engine of the American Economy

Supply Chain Brain: Aug 2013

Export manufacturing has recently become the unsung hero of the U.S. economy. Despite all the public focus on the U.S. trade deficit, little attention has been paid to the fact that the country’s exports have been growing more than seven times faster than GDP since 2005. As a share of the U.S. economy, in fact, exports are at their highest point in 50 years.

But this is likely to be just the beginning. We project that the U.S., as a result of its increasing competitiveness in manufacturing, will capture $70bn to $115bn in annual exports from other nations by the end of the decade. About two-thirds of these export gains could come from production shifts to the U.S. from leading European nations and Japan. By 2020, higher U.S. exports, combined with production work that will likely be “reshored” from China, could create 2.5 million to 5 million American factory and service jobs associated with increased manufacturing.

Click to read article…

Other Industry News:

New automobile sales surged in June to a pace of 16 million annualized units, the strongest monthly activity since2007. The auto companies said overall sales in the United Statesgrew 14% during July to 1.3 million vehicles. (Source: Autodata Corporation)

The trucking industry gained 6,300 jobs in July after posting a loss of 3,500 in June. The trucking workforce increased 0.45% over the previous month and increased 2.3% over the previous year. (Source: U.S. Bureau of Labor Statistics)

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