Why Chicago is a Great Place to Build a Warehouse or DC
When it comes to building a new warehouse or distribution center, there are a lot of factors to keep in mind, from how product flows through your operation to what peak throughput will be to how large of a footprint you have available.
Above all, though, is the question of location: Where should you build your new warehouse or DC?
The answer to that question will largely depend on the answers to a few key questions about how your operation currently works, what your plans for expansion are, etc. That being said, there are a number of locations throughout the US where supply chain, materials handling, and order fulfillment operations tend to flock. Chicago is one such location.
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But what makes Chicago such a great choice for building your operation’s new warehouse or DC? Below, we discuss some of the big benefits of locating your new facility in Chicago so that you have all of the information you need to make your decision.
Warehouses and distribution centers do more than simply store product and goods: They also act as order fulfillment centers, distributing those goods wherever they need to go. And for that very reason, it is essential that wherever you decide to locate your new facility, it must have easy access to proper transportation infrastructure.
The exact type of infrastructure that you need will of course depend on the specifics of your operation and how you deliver product from Point A to Point B. But chances are good that, regardless of your own unique needs, Chicago is likely to have you covered.
If you distribute goods by truck, Chicago boasts many interstate highways and routes traveling in directions all around the country, including I-90, I-94, I-80, I-55 (and others). These highway systems ensure an ease of transport by truck. Just as important as Chicago’s highways is its railroad system, which allows bulk freight all around the country.
Operations that distribute orders by air are supported by three airports, including O’Hare International Airport, Chicago Midway International Airport, and Gary Airport. Although there’s no direct connection to ocean travel, operations that tend to move bulk freight by ship do have access to the area’s waterways, including the Great Lakes.
Order fulfillment—actually getting goods into the hands of a customer—tends to be one of the largest expenses that any order fulfillment operation experiences, just behind cost of labor. Any way that an operation can reduce this cost will help them boost their bottom line and become more efficient and profitable.
By building warehouses in key locations around the country to act as regional distribution hubs, operations that serve the entire country can drastically reduce the transportation costs associated with individual orders and deliver orders to customers faster than in the past. The logic is simple: The less distance an order has to travel, the cheaper its distribution costs will be.
Chicago is more or less centrally located in the US (on an East-to-West basis), allowing it to act as an effective central distribution hub. Its access to major modes of transportation (see above) is invaluable, and it is close to other major metro areas/markets including Minneapolis, Detroit, and Toronto. It is also the third most populous city in the US (behind New York City and Los Angeles), offering a built-in market for your goods.
3. Labor Availability
Warehouse automation has the potential to drastically reduce the number of personnel that an order fulfillment operation must employ in order to be effective. But even the most automated of operations will require at least some level of workers to keep the machines running.
Because Chicago has long acted as a distribution hub, a large segment of the city’s labor pool has valuable experience in the fields of order fulfillment and materials handling. And because the cost of living in Chicago is relatively low compared to other metro areas like New York City, Washington D.C., Los Angeles, and San Francisco, operations can pay workers less while still remaining competitive.
4. Quality of Life
Though the vast majority of employees at your new facility are likely to be pulled from the surrounding area, the fact remains that you very well may need a trusted individual from your current location to relocate to the area in order to manage the design build and potentially oversee the process of hiring. Asking an employee to relocate is always a challenge, but is especially challenging when the location is not an attractive one.
Chicago is a cultural center within the US, offering a very high quality of life at a relatively low cost of living. In terms of entertainment, the city boasts major sports teams (including the Bears, White Sox, Cubs, and Bulls), multiple famous theatres and museums, and some of the best pizza and other cuisine in the country.
Because of all that Chicago has to offer, should you need an employee to relocate to your new location on a temporary or permanent basis, it will likely be easier than convincing someone to relocate to a less attractive location.
The Bottom Line
If you are trying to decide where in the country you should construct your order fulfillment operation’s newest warehouse or distribution center, Chicago is likely to be on your list. The city boasts impressive transportation infrastructure; it is centrally located in the US, allowing for faster delivery times and cheaper transportation rates; and its size and history of catering to the order fulfillment/distribution industries means that it offers a substantial pool of talented labor, at an affordable rate.
Regardless of where you decide to build your new facility, a quality systems integrator can help you determine the systems, processes, and technologies that you should leverage to make your operation as productive, efficient, and profitable as possible.