Prominent Logistics Clusters, Part 1: CenterPoint Intermodal Center

The largest intermodal center in the United States is a good test case for how to think through taking advantage of logistical agglomeration

As I reviewed in a recent piece about logistical agglomeration, 2 of the 23 “logistics clusters” (as defined in that article) in the United States are within a single private development: CenterPoint Intermodal Center (CIC) in Joliet/Elwood, Illinois. This is a massive intermodal terminal and warehousing complex, boasting two Class I rail hubs and 50+ tenants. The intermodal yards process about 3 million twenty-foot equivalent units (or TEUs, the general units of cargo capacity for containers) every year, roughly equivalent to the traffic handled at the ports of Seattle and Tacoma.

CIC was created from the remains of the Joliet Arsenal, which was an Army manufacturing plant for TNT and related materials during World War II. In 1995, a piece of the Arsenal was transferred to CenterPoint Properties in a first-of-its-kind conversion of military property for private use by a developer. Oddly enough, CIC is owned by CalPers, the California public sector pension group.

There are other major logistics parks/clusters in the US, but arguably the only other one that rivals CIC as a single, privately-developed entity is AllianceTexas in Fort Worth, which will get its own write-up at a later date. In the other logistics clusters/inland ports in the US, there is concentration, but upon cursory examination, not of the same density or kind.

Estimates vary, but according to one 2017 report, CIC supports 8,700 current full-time jobs, including a few thousand in warehousing and a few thousand in trucking. Warehouse Workers for Justice, a worker center in Will County, Illinois, estimates that 70% of the warehouse workers in the county, in which CIC lies, are temp workers. There are remarkably about 100 temporary worker staffing agencies in Will County, and one warehouse might have workers from 4-5 such agencies. It is estimated that warehouse workers in Will County make $12.81/hr on average, but many work not by the hour but at a piece rate: according to one temp worker employed at the Walmart warehouse in CIC between 2010-2014, for 999 pieces unloaded, “you’d get $45, split between two people.”

Employers at Walmart’s Import Distribution Center in Elwood, IL | Warehouse Workers for Justice

Predictably, many people in the surrounding towns of Joliet and Elwood are resentful of everything CIC has brought to their communities, including semis clogging their streets every day, and fearful that things could get worse. The city of Elwood offered CenterPoint a total tax abatement for two decades in 2002 to lure the facility, which in turn promised tens of thousands of good-paying jobs. Today, Elwood is $30 million in debt and unable to repair its crumbling infrastructure. And what few, low-paying jobs CIC has created for Elwood residents are now threatened by warehouse automation.

To get a sense of what it would mean to organize a place like CIC, it is instructive to examine a map of the facility (note that what is pictured is just the northern “campus” in Joliet).

CenterPoint Intermodal Center in Joliet, IL | CenterPoint Properties

As is true of many big logistics clusters, this particular CIC campus is built around a Class I rail hub, in this case for Union Pacific, as the other CenterPoint facility in Elwood is built around that of BNSF. Closely situated to that hub are facilities for some of the largest retailers in the United States, including Amazon (listed as “undisclosed tenant” on this map), Home Depot, and Walmart; some of the largest logistics firms, including J.B. Hunt, NFI, and Saddle Creek; and some of the largest construction materials companies, including Vulcan, LaFarge, and Prairie.

Here again is a screenshot of the area from my distribution mega-map showing warehousing and distribution facilities for the four largest retailers in the country, including Amazon, Walmart, Home Depot, and Target:

Home Depot has about 2.2 million square feet of warehousing space there, roughly equivalent to the size of their 20 Chicago-land stores. Target has three very important facilities in the area: a freight consolidator supplying 26 different distribution centers around the country; a fixtures, shelving, and in-store marketing materials distribution center; and a 1.4 million square foot import distribution center that should be opening in 2025. Walmart has a massive 3.5 million square foot combined import distribution center and regional distribution center, as well as a 1.1 million square foot combined NextGen DC (utilizing some of the automation described in my Walmart primer) and e-commerce fulfillment center. Finally, Amazon has an inbound cross-dock, 3 fulfillment centers, and 1 sortation center, all totaling about 4.2 million square feet.

That’s a lot of important distributional nodes for some of the largest employers in the country. But how precisely might it be possible to take advantage of such a concentration of facilities? In a future post, I’ll try to offer some thoughts about what this might mean.