At the crossroads: why Indiana is the place for distribution and logistics.

• Author: Kaelble, Steve
• Position: REAL ESTATE & CONSTRUCTION

IT'S BEYOND CLICHE TO repeat that the most important real-estate considerations are "location, location, location."

Yet the well-worn adage is particularly applicable when it comes to choosing a place from which to distribute products. And it is a primary reason Indiana is a national and growing standout when it comes to distribution.

Indiana can claim one of the best locations in the country when it comes to reaching customers and end users elsewhere. Roughly two-thirds of Americans, and two-thirds of Canadians, reside within a day's drive of the Hoosier state, according to the Indiana Department of Commerce. That drive is made easier by the presence of strong highway connections leading in virtually every direction. And for those whose needs require other modes of transportation, Indiana is well-served by rail and air-cargo services and enjoys water connections for both barge and oceangoing traffic.

It adds up to a strong argument for the Indiana growth of what economic-development officials like to call "21st Century Logistics." Experts give a variety of definitions for logistics, but most boil down to activities involving procurement, purchasing, inventory, warehousing, distribution, transportation and customer support. Major links in this supply chain are the massive distribution centers sprouting across the state.

Distribution central. The places where the Indiana distribution boom is most obvious lie in and around Indianapolis. Expansion Management and Logistics Today magazines conduct an annual "Logistics Quotient" study, ranking U.S. locations by a variety of factors. The latest study placed the transportation and distribution industry climate in metropolitan Indianapolis sixth in the nation.

Just eight years ago, there were no major bulk distribution warehouses in Hendricks County, according to Harold Gutzwiller, executive director of the Hendricks County Economic Development Partnership. "Right now there's about 17 million square feet of space and a couple million more under construction, which is pretty phenomenal."

What's behind the explosion of Hendricks County logistics development? "By a quirk of fate and location, a large chunk of property became available, because of the airport and not being able to have residential development on that property," Gutzwiller says.

There's also been a rapid evolution in the logistics industry in terms of the kind and amount of space needed, he says. Corporate distribution plans that used to call for smaller centers in more places across the country have given way to more consolidated arrangements, with more square feet under higher ceilings served by more loading docks and more trailer capacity.

"Distribution and logistics have really been focusing on consolidation in the last few years," agrees Chris Alexander, vice president for industrial development at Lauth Property Group in Indianapolis. "What was once a distribution network made up of 20 locations, they're now trying to consolidate into four or five throughout the country. You might see a company set up a distribution center on the East Coast, one in the Midwest and one on the West Coast," Alexander says, or perhaps western locations on either side of the Rockies.

With trends like these, Indiana's place on the logistics map has become ever more attractive, Alexander says. "We're about as centrally located as you can be."

Seemingly suddenly, the large tracts of land available just...