Getting your foot in the door with decision-makers requires breaking through the noise.
Consider an economic leader like America's Central Port and one of their 43,200 square-foot rail-served warehouse spaces like the one below.
As a leader in economic advancement for the Southwest Illinois region, the objective for the Port is not just to lease space; it's to attract tenants who will create the most economic impact each space can facilitate.
Great strategies start with well-defined constraints and leaders who understand you need a box before you can think outside of one.
For the typical 43,200 SF rail-served warehouse space, the box that we started with was to note that good-to-great customers would sign 3-5-year lease agreements with a high potential for renewal, hire an average of 5+ employees, and have a high potential for expansion and/or tenant improvements. Phenomenal customers were those who would also benefit from using rail, with a high potential for increased throughput.
Now, you can prompt ChatGPT to act like an industrial and commercial real estate expert, throw in this mix of desired traits, and you'll get a decent head start on what industries to begin looking at. However, pinpointing what it is about the building and location themselves that would make the properties at America's Central Port not just an option among many but a true value-add to a business takes a little more work.
This is where Never Industries thrives.
The example below explains the math behind getting from point A to point B, identifying both a target audience and the value-added narrative used to engage their attention.
Q1: What businesses rely on rail?
First, it's essential to recognize that businesses shipping or receiving in bulk see the greatest benefits from rail, driven by economies of scale.
Plastic manufacturers, for example, require the raw material of plastic, which comes in small pellet form and is transported in covered hopper railcars, the same type you might see used to transport grain and agricultural products. For every rail car of plastic pellets delivered to a manufacturer, it would take 3-4 trucks to deliver the same payload.
Beyond hopper cars used for a wide range of aggregates, there are rail cars designed to carry automobiles, large machinery, lumber, steel, coal, concrete, fertilizer, chemicals, gases, and the big 20 and 40-foot intermodal containers you might see on a large coastal ship that house just about everything available on Amazon's marketplace.
Considering the physical constraints associated with each 43,200 SF section and surrounding port infrastructure, the only rail cars that can be effectively unloaded via the rail docks attached to each warehouse are those transporting chemicals, grain, food inputs, plastic pellets, lumber, and other general cargo that could be offloaded via a boxcar or flatcar as seen in the illustration below.
Q2: What Is the Market For rail-served real estate options for manufacturers across the U.S.?
When you look at commercial and industrial facilities across the East and West coasts and rail hubs like Chicago, Memphis, Houston, New Orleans, Cincinnati, and others, what you'll find are the occasional billion-dollar operations with the capacity to bring in hundreds of rail cars, but more frequently what you'll find are smaller 100,000+ square foot warehouses with rail spurs that allow a single tenant access to maybe four to seven rail cars at one time.
If you're Phillips 66 or BASF, you can afford your own plant with as much rail as you want. However, if you're a $10-500M chemical manufacturer, your options are limited.
If you are limited by available facilities, your next thought might be to build something new. Developing rail-served facilities on land adjacent to rail is a whole other ball game. For one, you have to get permission from the Class-I railroad to add a spur from their line to your site and convince them to service that particular location, which is not a walk in the park, even when you're a Fortune 500 company. If that process wasn't enough, then comes the actual cost of the rail track, which ranges between $200-$300+ per foot. Now, consider that a single liquid chemical railcar is 65 feet long. This means that if you want enough track for 50 railcars, you're looking at more than half a million for the track alone, and that's not counting the engineering costs to make it a reality. Banks aren't crazy about lending you the capital for rail either because it's not an easy asset to collateralize. Building a new rail-served facility is doable, but it's not easy, that's for sure.
Q3: how does America's Central Port compare to the rest of the market?
The Port makes it easy for chemical manufacturers to scale.
When it comes to the buildings and infrastructure at the Port, there are some limitations to each 43,200 square-foot space. The main issue is that equipment and machinery need to fit within each footprint due to the ceiling height and column spacing. The ceiling heights are 22 feet at the center and 14 feet on the eaves of each space, with column spacing measuring 60 feet by 20 feet. Therefore, only operations with equipment and machinery that can fit within each footprint will find these spaces to be a viable option.
Multiple chemical manufacturers and related operators fit this profile.
The advantage of chemical operations at the Port is that there are multiple lines of track throughout the property that can be used for interplant switching. This means that a warehouse with only four rail spots can still accommodate up to 60+ railcars, thanks to the additional tracks available year-round.
Now, here's where this gets really fun.
America's Central Port is home to all of the Class-I railroads, including Norfolk Southern, Union Pacific, CSX, Kansas City Southern, Canadian National, and BNSF. These carriers act as the interstate highways of rail, connecting major cities, coastal ports, and transportation hubs around the U.S., as well as Canada and Mexico. This means that as a small to midsize chemical manufacturer, you can benefit from shipping your raw materials or finished products by rail to any rail-served facility in the country from a single location.
Economy-of-scale transportation advantages like abundant rail access translate into winning larger contracts and the flexibility to compete on price without sacrificing profit margins. When you can ship 40+ railcars of product to any coastal port in the U.S., you've now opened your doors to the global market and billion-dollar enterprises that can catapult your business to new heights. You can start small with an operation that is inbound and outbound by truck, only leasing what track you need at the time, giving you the flexibility to grow into more space and more track as your company grows with you. Being able to start small and scale into high-volume production at a single facility is a unique opportunity for chemical manufacturers that doesn't exist anywhere else in the U.S.
Conclusion:
Target Audience: Small to Midsize Chemical Manufacturers
Value Proposition: With access to all of the Class-I railroads, more than 20 miles of rail on the property, and the option to scale from a single rail spot to over 60 at any given time, warehouses at America's Central Port are perfect for small to midsize chemical manufacturers looking for options to grow and scale over time.
Understanding what problems you solve helps, but true connection happens when you can speak the language specific to your prospect's industry and why the problem you solve matters to their business. From that first call to the initial discovery meeting, when your questions are rooted in your customer's outcomes more than your own interests, you'll earn their full attention. Focus on how you add value, and craft your story from there.
Note: America's Central Port is not a client of Never Industries, Inc. The above case study is from my (Alex Burkart, President of Never Industries) work as Director of Strategic Marketing for America's Central Port.