Time to Look for a New Home – Have You Outgrown Your Terminal?

It’s Friday night and the yard is packed.  The sound of 40 reefers trying to keep frozen loads cool has caused you to get yet another neighbor complaining about the noise.  You have 3 trucks at truck stops on the other side of the city because of the perpetual traffic jam on the Interstate and they don’t have the hours to get back home.  Your shop is replacing yet another corner on a trailer that was hit by someone trying to back into too small of a space.  The dock is full to the point that you will need to load an empty trailer just to get at the freight that has to leave first thing tomorrow.  And now Jimmy is coming into the office all steamed up because his truck is blocked in and there is no way he’s going to make his delivery window tonight.  Oh, and the night dispatcher is running late because of more construction on the Interstate, and the surface streets are full of people trying to bypass the mess.  As you get yet another cup of coffee to stay awake you start to wonder if maybe it’s time to look for a new yard.

Now don’t get me wrong, growth is a good thing (as long as it is profitable of course).  Unfortunately, it sometimes means that the terminal that you have already paid off has become too small.  Maybe it’s a block building that can’t be easily expanded.  Even if it is curtain wall construction, perhaps the perimeter wall is already too close to the fence.  Maybe you are just land locked and the person with the empty lot around the corner wants too much for it.

Alternatively, you may have recently fired one of your large customers because they are forever asking you to “sharpen the pencil”, playing you off against Fly-By-Night Trucking and Logistics, and treating your services like a commodity to the point that they are causing a negative return.  Or perhaps one of your bigger customers has closed the doors on the distribution center across the city and now most of their work is on the other side of the state.

Regardless of why your business has changed, there will come a time when you think about moving to a new location.  Before you pick up the phone and call a real estate agent you need to create a list of must haves, nice to haves and any show stoppers.  Examples could include:

• Easy highway access to reduce deadhead and travel time
• Close to your major customers
• Access to public transit or a relatively short commute so that is not a constraint to hiring staff
• Close to where you drivers live so that does not give them a reason to leave
• Traffic conditions so that you don’t lose on HOS to get that cheaper piece of land

Sometimes you will have to do trade-offs.  If you are a reefer carrier and one of your major customers is Tip Top Poultry in Marietta, GA then you will not want to put a terminal down in Forest Park, near the Atlanta Airport.  It may cost you more upfront to be in the north end but the payback of drivers not losing an hour or two each trip running through (or around) Atlanta could be huge.

You might want to start by looking for an existing facility.  The best option is a terminal that someone else is selling.  Truck terminals are an unusual beast – the building may not need to be large but there has to be a lot of open land available for parking and maneuvering equipment. You will likely have to do some renovations to make it fit your needs but at a minimum you should not run into any zoning issues.  If you are not certain what your longer-term needs will be, sharing a yard with another carrier through renting their unneeded space could be an option.  However, keep in mind that if that company experiences growth you may be asked to move again.

If you want to build a new facility, keep zoning at the top of your mind.  There are a lot of municipalities that are outright hostile to our industry.  Part of the problem is terminal buildings tend to be small relative to the size of the lot (generally less than 20%).  That will result in a lower property tax bill compared to a warehouse that covers 75% of the lot.  Check the local bylaws in case they require a minimum percentage of building footprint to the size of the lot.

Avoid irregular shaped lots if possible.  A rectangular lot will maximize the amount of trailer and equipment parking.  A pie shaped lot will end up with areas that are only good for parking storage trailers or older equipment that has not yet been sold.

Another consideration is what neighbors you will have.  If you have drivers who will sleep in their trucks overnight in the yard you will not want to be next door to something like a stamping plant or a meat processing facility that will cause noise or odor issues for your employees.  At the same time, you don’t want many houses nearby as they will probably make noise complaints to the municipality.  I once had an inherited facility in a mixed residential/industrial area.  I could count on at least one phone call a week complaining about the backup alarms waking them up at 2 in the morning when my night linehaul drivers backed into the docks. You may be forced to put in fences or berms to abate the noise, adding to your overheads and detracting from your ROI.

Another consideration is the existing grade and soil composition of the land.  You are going to have to do some grading to put down the appropriate aggregate and then compact it.  You will want to avoid having to build up areas so that water is not going to pool or require additional drainage.  Also, how stable is the soil – is it heavy compacted clay or is it sand? The site preparation work could be your largest expense so you will want to find properties that naturally minimalize it.

Finally, what sort of utilities are already servicing the land you are looking at?  Is it a fully serviced lot or will you be required to bring in the utilities at your own expense?  What utilities are available?  For example, what sort of internet connections are in the area?  If you are using cloud-based technologies, will you have enough bandwidth available?  If you’re planning for the future, fiber should be a priority. What sort of right of way is available if you need to service the property yourself?  For example, does a specific utility have the exclusive rights to the poles in the area?  You could end up needing to trench or drill conduit to bring in electricity, telephone or fibre optics lines even though there may be poles on the property already. Is water and sewage available or will you need to drill a well or use a septic tank?

As you can see there are a lot of things to take into account before you even think about hiring an architect to design the building.  There’s a lot that could go wrong in this process.  Make sure you are using a real estate agent who understands industrial/commercial or have a consultant who can walk you through the process.  There’s a lot of work before you even get a shovel in the ground.  There will always be something that pops up during the process but avoiding as many of them before the purchase can keep the project on its timeline and keep it within budget.