BNSF Logistics Park, Chicago

BNSF Logistics Park Chicago

Most of the site is a reconversion of a former Army munitions depot (Arsenal) that was decommissioned in 1976, freeing about 25,000 acres of real estate. Of this, 19,000 acres became park land, and another 1,000 was allocated for a military cemetery. 2,032 acres were sold to the real estate developer Centerpoint Properties, and 620 acres were sold to the class 1 rail operator BNSF for the construction of a state-of-the-art intermodal rail terminal. The logistics park began operating in 2002 and is entirely private, with ProLogis and CenterPoint responsible for providing and managing distribution centers. Thus, the world’s largest rail company is in partnership with two of the largest promoters and managers of logistics real estate. It is a suburban logistic center taking advantage of the principle of co-location; the rail terminal and the logistics park have been constructed simultaneously, reducing drayage considerably. A wide array of freight distribution activities are present, including free trade zones. The rail terminal handles the largest volume in North America. It is directly linked to the most important North American rail corridor, the Los Angeles – Chicago axis, with the Chicago hub handling more than 10 million TEU. The rail lines of this corridor are either owned by BNSF or UP. Therefore, the terminal is modern and productive, with limited dwell time and demurrage. This productivity and capacity benefit the co-located activities that use such advantage in their marketing as the site benefits from massive economies of scale and excellent accessibility to the North American freight distribution system.

So far, about 1 billion USD worth of investments have been made. A large share of the real estate of 12 million square feet is leased, underlining the business model, which is based upon revenue generation from location to amortize capital investments. The main tenants are Walmart (retailer with 3.4 million square feet), DSC Logistics (third-party logistics service provider; 3PL), Georgia Pacific (the world’s largest wood product manufacturer; it is using the logistic park but not the intermodal rail terminal), Potlatch (forest products), Sanyo Logistics (distribution), Partners Warehouse (3PL), California Cartage (3PL) and Maersk Logistics (3PL). The presence of the maritime shipping company Maersk underlines the setting of a hinterland strategy pursued by several shippers around the world, which helps better manage their containerized assets. The BNSF Logistics Park is an important component for inland distribution for imports from the West Coast, and its dynamics are thus strongly linked with transpacific trade. A drawback is that despite the co-location of distribution centers, shipments have to go through the rail terminal gate.

About two miles north of the site, a second component was planned with 3,600 acres acquired by Centerpoint. The CenterPoint Intermodal Center – Joliet (CIC-Joliet), co-located with a new UP intermodal terminal, came online in 2010. Jointly with BNSF Logistics Park, CIC-Joliet creates the largest logistics center in North America. This underlines a co-location principle beyond logistic activities to include rail terminals.