Once goods have been manufactured, producers are posed with the challenge of delivering those goods to consumers far and near with maximal speed, safety and efficiency at minimal time and cost. The logistics and distribution industries work in concert to address these issues. Logistics is the process of planning, implementing and controlling the efficient flow of goods and services through the supply chain from producer to consumer. Distribution is the process of transporting goods from producer to consumer and incorporates all freight carriers (air, water, trucking and intermodal) and warehousing. The two industries work together as brain and brawn, with logistics concerns guiding and leveraging the capabilities and efficiencies of distributors.

As virtually every product sold in America moves through distribution channels, the industry is responsible for transporting a third of the nation’s GDP. The movement of these goods, a $300 billion industry, is increasingly coordinated by high-tech means such as global positioning satellites, real-time Internet tracking and just-in-time inventory systems. The maturation of the industry has produced two distinct and complementary fields. Distribution will continue to be serviced by “low-tech” suppliers, including trucks, airplanes and ships. Logistical coordination, on the other hand, is a high value-added service that will drive industry growth in coming years.

Highway infrastructure is extremely important to distribution firms and advanced logistics companies. Distribution firms require well-maintained, uncongested roads, and often rail access. Airport and port facilities further support this industry. Affordable land suitable for large warehouses, a large and accessible market, and the absence of inventory taxes are also important. Regional economic growth is important as well. Distributors’ revenue comes largely from area firms and regional consumer needs. In either case, distributors desire a growing regional economy that expands their potential client base. Large distribution firms typically locate near mid-size to large metropolitan areas with a strong airport.

Houston offers several key resources important to the distribution and logistics industry. Following are highlights of the region’s assets:

• The Port of Houston is a complex of public and private facilities that stretches for 25 miles along the Houston Ship Channel and Galveston Bay. The Port of Houston is the world's sixth largest and routinely ranks first in the nation in volume of foreign tonnage, second in the nation in total tonnage, and 10th in the world in total tonnage. Two major railroads and 150 trucking lines connect the Port to the balance of the continental United States, Canada and Mexico.
• Among Gulf of Mexico ports, the Port of Houston is the leader in containerized cargo. Leading trading partners are Mexico, Venezuela, Germany, Brazil and China. The top commodities traded include petroleum and petroleum products, organic chemicals, industrial equipment and computers, iron and steel products, and plastics.
• The Houston Ship Channel — a 52-mile inland waterway that connects the Port of Houston to the Gulf of Mexico — connects the Houston area with markets throughout the world and is a key conduit for petrochemicals and grain. More than 150 companies straddle the channel, which comprises one of the world's largest clusters of manufacturing, research and petrochemical facilities.
• The Houston airport system ranks fourth nationally and sixth worldwide in passenger volume. George Bush Intercontinental Airport is ranked as the 11th largest international air-cargo gateway to the United States.
• Houston is one of the nation's busiest rail centers, with 12 mainline tracks radiating from Houston. The city is served by Union Pacific Railroad, BNSF Railway and Kansas City Southern, providing direct access to West Coast cities and to the East Coast via Kansas City, Memphis, Chicago, New Orleans and St. Louis. More than 700,000 rail cars pass through Houston each year.
• Shippers have access to all major U.S. cities in the West via direct lines and in the East via connections in St. Louis, Kansas City, Memphis, New Orleans or Chicago.
• Typical commodities shipped via rail through Houston include chemicals, plastics, grain, forest products, consumer goods, potash, cotton and steel.
• Service is available to all Port of Houston Authority facilities as well as more than 150 industries along the Houston Ship Channel. The rail system is further integrated with the local trucking industry via six intermodal terminals, the local highway system (which includes three Interstate routes), Houston's three major airports (all with rail facilities nearby), and the barge system on the Gulf Intracoastal Waterway.
• Houston is the hub of a major trucking network for the United States. As such, it is well-integrated with the Port of Houston, Houston Intercontinental Airport, Hobby Airport, Ellington Field and the mainline railroads serving the city. In addition to local operations, Houston is served by more than 1,127 non-local trucking firms.
• Houston's freeway system includes 575 miles of freeways and expressways in the 10-county metro area.
• Among the top 10 metropolitan cities for industrial space, Houston ranks sixth with 401 million square feet (SF).

Houston is benefiting from a confluence of favorable circumstances: proximity to major population; a port which is able and willing to expand capacity; good import/export balance and strong rail connections. The region is at the center-stage of the national logistics scene with the opening of the first phase of the Bayport Container Terminal at the Port of Houston. At full build-out, the port's capacity will be close to 4 million TEUs, more than double its current capacity. Optimism about the region’s profile as a global logistics hub received a further boost with the arrival of Wal-Mart’s four-million-SF distribution facility in nearby Baytown. It was a huge shift for the world's biggest retailer, which had previously imported almost all its Asian-made goods through the West Coast, and has led to speculation that other major companies will follow.

Container traffic is the port's fastest-growing freight category. The port is attracting all-water container shipments that in the past would have gone to the Ports of Los Angeles and Long Beach, a trend spurred by Wal-Mart’s recent move. The growth rate for container traffic at Bayport is expected to be 16 percent to 23 percent per annum for the next 10 years. Along with Savannah, Georgia's, Container Berth 8, Bayport provides the only new container capacity expected to come online in the United States this year.

Harris County is home to a number of important marine transportation companies. Half of the 10 largest distribution and logistics companies in Harris County are primarily involved in sea shipments. Panama’s decision to greatly expand the Panama Canal will undoubtedly benefit this important industry. Ground and rail transportation interests are also represented among Harris County’s top employers in the logistics and distribution industry.