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New Logistics

A growing global economy has resulted in increased demand for goods around the world. Nearly one third of global transportation energy is dedicated to the movement of freight within and between countries by trucks, ships, and rail. These shipments have impacts on the environment, infrastructure quality, and economies.

Here in the Midwest, trucks carry the bulk of goods to businesses and customers and have seen their share of total shipments increase steadily since 2010. By 2040 the total weight of goods shipped by trucks is projected to increase by 45 percent. In response to this potential for increased demand, shipping companies are shifting their operations to a regional hub system through which goods are shipped from hub to hub as consolidated containers of goods, rather than as individual parcels belonging to one company. As warehouses become regional centers deliveries occur at shorter intervals delivery costs increase.1 This is especially true in the case of same-day shipping services offered by Amazon and Walmart in select US markets.

Additionally, freight rail has seen a resurgence since the end of the Great Recession. The advantages of shipping goods on the freight rail system include avoidance of strict motor carrier regulations, an industry-wide truck driver shortage, and superior fuel economy when compared to other land-based shipping methods.2

1. BI Intelligence
2. Minnesota Department of Employment and Economic Development, 2013

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