South Bend logistics sector booming as potential Amazon center highlights larger trend
SOUTH BEND — Plans for a new Amazon Delivery Center in South Bend aren’t the first major growth in the region’s logistics sector, and won’t be the last according to local developers and industry experts.
The focus of that growth has come in areas immediately adjacent to the intersection of the Indiana Toll Road and U.S. 31, a confluence of traffic arteries that connect directly to larger metro areas including Chicago, Detroit and Indianapolis, as companies focus on the logistics of getting products to customers quickly and efficiently, particularly in the internet era.
The revelation Wednesday that Amazon may locate a distribution facility here could come with new services for consumers in the area, but it also represents a continuing boom in logistics growth locally. Much of that growth has been spurred by developers Holladay Properties and Great Lakes Capital at the business park called AmeriPlex at Interstate 80/90.
In an interview Thursday, Great Lakes Capital managing partner Ryan Rans declined comment on documents suggesting Amazon will locate a delivery facility at one of GLC’s recently built distribution centers.
But Rans did speak more broadly about the firm’s focus on expanding development near the hub of transportation activity on the city’s northwest side, outlining a new distribution center that is expected to break ground by spring.
“We’re going to break ground in the next month or two on a 165,000-square-foot spec (speculative) building there,” Rans said. “There remains demand for space that’s immediately available for tenants.”
And in the field just south of the Indiana-Michigan state line where that new building will rise, Rans said, Great Lakes Capital has plans to eventually build “between 1 and 1.5 million more square feet there.”
For Rans and Great Lakes Capital, providing space for the attraction of new businesses, or expansion of existing ones, helps boost business in the company’s portfolio of retail, residential and office properties.
“People are looking for a realistic solution more than anything else,” Rans said. “Our intention is to continue to build ahead of having a tenant in hand, so the South Bend market can capture all the opportunities.”
The development of the AmeriPlex park began in 2007, when Holladay Properties started construction of the Huron Building on the south end of the business park.
“The timing was not excellent; it was finished in 2008 and of course the recession hit,” said Paul Phair, partner and senior vice president at Holladay. “We were able to fill it, kind of hodge-podge in the beginning.”
But after the recession, in 2012 and 2013, the “light switch seemed to turn on,” Phair said, “and the dominoes just kind of seemed to fall after that.”
Since then, AmeriPlex has become home to FedEx, Pepsi, AM General, ThyssenKrupp and more companies that sought locations with easy access to major roadways.
And like Great Lakes Capital, Holladay Properties is also floating potential speculative construction this year.
“We control a couple of sites that we plan to build on in the near future out in that area, in the northwest quadrant … We hope to do it within the year,” Phair said. “Plans are still in the works on that.”
Meanwhile, there are ongoing studies looking at the possibility of adding air and rail freight hubs at the South Bend International Airport, just south of the AmeriPlex hub.
The boom itself is part of a state- and region-wide trend to rekindle the moniker for Indiana as “Crossroads of America.”
“Every town that has an interstate that runs through it thinks they’re perfect for logistics,” said Jeff Rea, president of the South Bend Regional Chamber of Commerce. “But for us, it’s partly the markets we serve. If you think about moving product, I think the federal limitation is a 10-hour drive, and when you start drawing a 10-hour circle from South Bend you hit Minneapolis, Milwaukee, Chicago, Louisville, Cincinnati, Cleveland, Columbus.”
Bryce Carpenter, director of industry engagement for logistics and manufacturing nonprofit advocate Conexus Indiana, said the state has the most pass-through interstates in the country, and 68 percent of the country’s population can be reached in a six-day drive.
Amazon’s entrance
The ongoing growth in South Bend has received new attention with the potential location of an Amazon Delivery Center, as the e-commerce giant pursues new ways to deliver millions of online products to customer’s doors.
Late last year, the company inked a deal to purchase 20,000 Mercedes-Benz Sprinter vans, prompting the German auto manufacturer to open a new factory in Charleston, S.C., and vaulting Amazon into the spot as the world’s top Sprinter customer.
That purchase was part of a plan to expand into delivery itself, as Amazon plans to use the vans to hire contract drivers to help with the company’s new offerings in delivery options, ranging from photos of packages on a customer’s front porch to the possibility of same-day delivery.
That’s what Amazon’s new delivery centers, including the one to potentially be sited here, will help streamline, as the company’s delivery expenses jumped last year according to quarterly earnings reports. So the 103 jobs listed on the documents filed with the state of Indiana might not completely illustrate all the potential contractor jobs that could be created by a delivery center here.
Jeff Berman, editor of trade publication Logistics Management, said the expansion is part of the e-commerce new focus on developing regional hubs to speed delivery and reduce costs.
“They’re all hyper-focused on the trend of regionalization,” Berman said Thursday. “Being closer to the customer helps ensure those shorter delivery times and being able to get that same-day, next-day or two-day order out.”
That “last-mile” logistics race is just another symptom of consumer trends shifting away from traditional retail and toward e-commerce.
“Fewer people are going to shopping malls, more people are buying stuff online,” Berman said. “And it’s growing by the day.”
