It’s often referred to as Second City. But when it comes to transportation and fulfillment, there are many reasons why Chicago is second-to-none.
Home to world-class culture, some of the nation’s tallest buildings, and several beloved sports franchises, Chicago is also a major eCommerce order fulfillment hub.
The city’s central location enables Chicago fulfillment companies to support the supply chains of eTailers large and small with timely service throughout the US.
In this article, we’ll examine the current state of warehousing in Chicago and the unique advantages that fulfillment of D2C orders from Chicago has over different US locales.
Current state of warehousing in Chicago
The COVID-19 pandemic – and the related rise in eCommerce – has affected warehousing and fulfillment operations all across the US in the form of lower warehouse vacancies, higher warehouse costs, and increased competition for order fulfillment labor.
According to CommercialEdge’s March 2022 National Industrial Report, the average warehouse rent among the top 30 markets in the US has reached a staggering $6.45 per square foot. The national warehouse vacancy rate has dropped to an average of 5.2%.
The inset graph shows how Chicago compares to these national figures as well as the other top markets in the country.
As you can see, Chicago’s average rent is more than $1-per-square-foot lower than the national average, while its vacancy rate is exactly the same as the national average. It is when you compare the Windy City to its coastal competition, however, that Chicago begins to separate itself from the pack.
Chicago’s average warehousing rent is more than $6-per-square-foot lower than Orange County, CA; more than $5 lower than Los Angeles; nearly $3 lower than New Jersey; and more than $1 lower than the Inland Empire in California. At the same time, Chicago’s warehouse vacancy rates are much higher than these popular port-centric locales.
So, at a time when warehousing is harder to come by and more expensive across the US, warehousing in Chicago remains less scarce and less expensive than in other major metro areas.
10 advantages basing fulfillment operations in Chicago
If Chicago is starting to sound like an ideal location to base your fulfillment ops, read on to see even more impressive stats about Chicago logistics from the Illinois Department of Transportation, Illinois Department of Commerce, Intersect Illinois, Trammell Crow and CBRE Research.
- A huge local customer base. As the country’s third-largest metropolis, the Chicago area offers easy access to approximately 9.5 million local customers, which means a Chicago fulfillment center has the potential to offer you lots of same-day delivery convenience and flexibility.
- A highly central location. There’s something to be said for being located in the middle of the country – including the fact that nearly 200 million consumers are located within 500 miles of Chicago and Illinois, and that a Chicago fulfillment center features convenient interstate access to both coasts. Approximately one-third of all North American consumers are less than a day’s truck drive away, and 42% can be reached via truck within two days or less.
- Parcel-carrier approved. Chicago has one of the largest UPS package processing facilities in the world (the 2 million-square-foot Chicago Area Consolidation Hub) as well as a FedEx SmartPost Hub. It’s also a major market for DHL. As a result, it should come as no surprise that your Chicago fulfillment center will be well-served by all of the major parcel carriers, including the USPS.
- A great market for eTail or retail start-ups. Several of the country’s most successful eTailers, retailers and direct selling businesses got their start in Chicago, including Groupon, Pampered Chef, Grub Hub, Trunk Club, and Crate and Barrel. In addition, several more, like Walgreens and Boots Alliance, are headquartered there.
- An air of success with room for growth. Chicago’s O’Hare airport handles more than $200 billion of cargo each year. However, it still has room to handle considerably more thanks to a recently completed new cargo campus that has expanded its capacity to 2-million square feet and increased potential throughput by 50%.
- Outstanding ground transportation flexibility/unparalleled rail access. If you’re looking for road transportation alternatives for your inbound freight, you’re definitely on the right track. Located at the northern end of the thriving NAFA corridor – and the east-west nexus of Europe and Asia – Chicago has more than 500 freight trains passing through it every day, making it the Western Hemisphere’s top container handler.
- Outstanding interstate access and connectivity. You can still get your kicks on Route 66, the “Mother Road” that starts in Chicago. But there are many more efficient options for getting your goods on the road and into customers’ hands quickly thanks to Illinois’ impressive highway network, which features 2,185 interstate highway miles and multiple coast-to-coast interstates (I-80 and I-90), north-south corridors (I-39, I-55, and I-57) and east-west corridors (I-70, I-24, I-64, and I-74).
- Large transportation and logistics pool. Approximately 7,200 trucking companies operate out of Illinois, and most major U.S. carriers have terminals in Chicago – a fact that offers your company a huge range of options when it comes to inbound and outbound transportation.
- Lower warehouse construction costs. If you love a good bargain, consider this. A new 500,000-square-foot Chicago fulfillment center will cost you approximately 60% less than it would in Los Angeles – and anywhere from 30 to 40% less than it would in places like the Inland Empire or Portland, as the table below indicates:
- Outstanding food. While your diehard New Yorkers may disagree with this final point, but many people say that Chicago serves up the country’s best pizza – not to mention some of its most unbelievable popcorn. Technically speaking, this isn’t a business advantage. But once you’ve given these things a try, you’ll understand why we believe they’re a major selling point. (After all, who says that the food you eat during site visits has to be forgettable?)
If you’re looking to take advantage of all that Chicago has to offer, but you don’t have the budget or bandwidth to operate your own facility, consider turning to Amware Fulfillment as your Chicago fulfillment provider. We offer two fulfillment centers in Chicago, as well as a wide range of services designed to improve your fulfillment speed while reducing everything from your product handling costs to your parcel spend. To learn more, contact Amware today.