#323 – Inside Our Industry – Industrial Location Decisions Follow the Freight
Posted on | Inside Our Industry
Location strategy has been top of mind for companies looking to increase manufacturing capacity or who are considering reshoring manufacturing. As noted in the following article, “transportation analysis is among the first filters used to narrow potential markets.”
Industrial Location Decisions Follow the Freight
Adam Roth, Executive Vice President; NAI Hiffman; Q3 2026
Transportation costs, shifting trade routes and supply chain risk are changing how companies evaluate industrial locations.
Global supply chains are being reshaped by geopolitical uncertainty, shifting trade relationships, rising transportation costs and changing freight flows. As those forces converge, transportation strategy has become a central lens through which many industrial location decisions are evaluated.
Intermodal transportation has become a core component of industrial supply chain strategy as companies seek more cost-effective ways to move freight. It allows goods to travel long distances by rail before being transferred to trucks for final delivery.
Rail is handling a larger share of long-haul freight as trucking becomes more expensive. Higher operating costs and more limited trucking capacity due to strengthened Federal Motor Carrier Safety Administration enforcement of English-language proficiency requirements and tighter federal oversight of the issuance of nondomiciled commercial driver’s licenses, along with rising insurance premiums and fuel-price volatility, have strengthened the economic case for intermodal transportation. As a result, more companies are shifting freight to rail for the long-haul portion of the journey.
The building becomes a logistics asset rather than simply a real estate expense.
Location matters more than ever
As supply chains change, so do the characteristics of desirable industrial locations.
Today, proximity to major intermodal facilities has become one of the strongest competitive advantages in industrial site selection.
Every mile between an intermodal terminal and a distribution center adds drayage costs, the trucking expense associated with moving containers from the rail terminal to the warehouse. While often overlooked during site selection, those costs accumulate over the life of a facility.
For companies moving significant freight volumes, locating near an intermodal hub can produce measurable operating savings year after year. That means locations with established intermodal infrastructure deserve greater weight during the site selection process.
Transportation costs are incurred every day a facility operates, while occupancy costs tend to be far more predictable. That reality is causing many companies to prioritize supply chain efficiency over simply minimizing occupancy costs.
Companies must consider not only where freight moves today, but how trade routes could change during the lifespan of a facility.
For site selectors, transportation analysis is among the first filters used to narrow potential markets.