Last Mile Delivery Dissected Our Economic Development Officer, Andrew Taylor, breaks down the mathematics behind the last mile in product distribution

If you take a quick look around your home or office, you will likely find that you are surrounded by hundreds if not thousands of finished consumable goods; each object a singular monument to the concept of a value-added, production economy. However, we often hail the hands that work the craft and overlook the hands that move the essential materials into place and the finished goods out to market. Our wonders of production could never be if their raw materials and final products could not be brought to bear at the right time for the right price.

At face value, logistics doesn’t seem all that complex. You simply take item X, made by individual Y from point A to point B and give it to individual Z; easy right? However, when dealing with trillions of transactions a year between billions of producers and consumers across hundreds of nations, one can’t simply slow-walk every knick-knack in the market to its final user. You must use mass goods transit options such as cargo ships, planes, trains and trucks. But ultimately, you do have to get that knick-knack into the final hands of the individual who needs it. This is often referred to as Last Mile Logistics and it can be the costliest aspect of goods distribution.

The realities of Last Mile distribution can seem somewhat counterintuitive. Most finished production goods often travel over ten thousand miles to reach their end user. How can the last few miles of delivery often constitute as much as 30% of the total delivery overhead? The answer comes down to the mathematics of distribution. Most production units start at the same location: the factory. However, the ultimate destination of each unit (or quite often groups of units) go all over the world. Consider that it’s about 11,500 miles from Shanghai to Decatur, IL. A cargo ship can get a production run of a million units 90% of the way there relatively cheaply by landing the entire shipment in a Western U.S. port. This is an economy of scale dealing with one transit provider. The real cost comes into play once the shipment is divided for distribution. Every time a shipment is split, it requires more man-hours, trucks, trains, fuel, insurance, etc. all to move the exact same number of units. Additionally, often these services are carried out piecemeal by third party logistics firms, all who have their own overhead and profit margins to be maintained. By the time those one million units reach the “Last Mile” of their delivery, they might be in the hands of tens of thousands of individuals (or even hundreds of thousands) in the age of home delivery, all of whom need to be paid.

This is the core advantage of a one-stop shop, maker-to-user logistics option like the ADM intermodal ramp: an uncongested, quick turn distribution point owned and operated by one provider. While ADM is correctly known worldwide as the leader in mass food production, it is also a world class logistics company maintaining a transportation infrastructure that secures an unending river of raw materials into their production facilities and finished products out to market 365 days a year to all corners of the globe. By utilizing ADM logistics, your raw materials and finished products can ride those currents from their first mile to their last.

 

Lake Decatur – A Key Asset to Any Manufacturing Company Our Economic Development Officer, Andrew Taylor, discusses why Lake Decatur is a great asset to manufacturing companies.

In the ever-evolving world of durable and non-durable goods manufacturing, a few aspects and requirements of production remain constant and unchanging; a clean, reliable, abundant and professionally managed water source is as central to their success as an experienced executive staff, a skilled workforce, and stable logistic supply and distribution lines.

A site selector’s ability to know that a property’s production facility can meet the water requirements without interruption and delay is a key aspect of nearly all industrial site selections. The United States’ manufacturing sector utilizes approximately 18 billion gallons of water a day for its operational needs, or about 25% of all fresh water draws according to a 2015 study by the Census Bureau. For perspective, that is about 56 gallons of water for every man, woman and child in the United States per day (20,400 a year).

Lake Decatur boasts a reservoir reserve of nine billion gallons of water locally, which is a 30% increase over previous years due to the recent dredging project that was completed in 2019. This volume which is continually replenished by our regional watershed is equal to approximately 86,500 gallons of fresh water for every person living in Macon County. Decatur certainly has the water to spare.

Manufacturers in the United States have a great need of a readily available, abundant, and reliable water supply, and they will naturally seek out the communities that can supply that need, not only for a day or a year, but for generations. Decatur is such a community.

MIP Marketing Launch a Huge Success Strategic Coalition Members Announced

On Friday, September 25th, the Midwest Inland Port and the Economic Development Corporation of Decatur-Macon County were proud to host over 300 local business and community leaders at Richland Community College for the much anticipated marketing launch of the Midwest Inland Port.

The keynote speakers included Governor Bruce Rauner who spoke of his vision for continued economic development in Central Illinois and Decatur in particular; and Mr. Juan Luciano, President/CEO of ADM who reiterated his commitment to Decatur’s future prosperity with the announcement of a $2 million local investment into National Foodworks Services and their new state-of-the-art food product incubator.

Additional speakers included representatives of the Midwest Inland Port Strategic Development Coalition on their commitment and contribution to the future of Decatur’s economic development:

  • Scott Fredericksen, President of Transportation – Archer Daniels Midland
  • Ron Pate, Senior Vice President, Operations and Technical Services – Ameren Illinois Company,
  • Kevin McKenna, Executive Vice President – Clayco
  • Ken Smithmier, President and Chief Executive Officer – Illinois Health and Science (Parent of Decatur Memorial Hospital)
  • Jim Schultz, Director – State of Illinois Department of Commerce and Economic Opportunity
  • Kevin Shuba, CEO – OmniTRAX, Inc.

For additional coverage of the event, visit Now Decatur, The Herald & Review, WAND TV and WCIA