Untapped potential • Northwest Indiana Business Magazine

Untapped potential

Experts: Region in position to become major logistics hub in booming e-commerce sector

NWI storage space
Large storage space for goods waiting to be delivered to customers will replace some retail, regional experts say. (Photo provided by Holladay Properties)

Some experts suggest that brick-and-mortar retail might not be the kind of development communities seek. Instead, they are opting for warehousing to accommodate those companies that specialize in e-commerce. For example, Amazon is opening new delivery sites in Merrillville and Valparaiso.

The Northwestern Indiana Regional Planning Commission recently conducted a study, which landed national honors, that examined e-commerce and its impact on development in Northwest Indiana. It focused on what the Region can do to raise its profile in that sector and to draw businesses that specialize in that area. Economic development experts say future development in the Region will be influenced by e-commerce.

Growing interest

According to Eman Ibrahim at NIRPC, the team learned a great deal about the growing e-commerce sector across the nation and in Northwest Indiana. For one, they learned e-commerce is quickly changing cities and suburbs.

Eman Ibrahim
Eman Ibrahim

“While traditional retail is adapting to change, brick-and-mortar stores have always had distribution hubs and always will for stocking and restocking the shelves and racks for consumers,” said Karen Lauerman, president and CEO of the Lake County IN Economic Alliance. “E-commerce is just a part of that retail fulfillment evolution.”

She said, in every scenario, it’s a consumer purchasing goods and expecting delivery of those goods.

Lauerman said, while the NIRPC study notes the drastic change in retail, companies are consolidating, changing models, modes of operation and becoming more in-tune with their true target — the actual purchaser of goods not just those browsing in person or online.

But the delivery of those goods might become the problem.

Urban freight delivery growth in Indiana is expected to expand 40% by 2050, increasing congestion and negatively impacting air quality. Cars and trucks are the largest sources of greenhouse gas emissions, especially trucks, which produce four times more nitrogen than cars and 22 times more particles than petrol.

Karen Lauerman
Karen Lauerman

However, the use of EVs (electric vehicles) and autonomous vehicles (AVs) is increasing in the delivery process. Amazon and others already are committed to converting as quickly and reasonably as possible.

“Northwest Indiana boasts an enormous amount of rail, proximity to air freight and the Port of Indiana-Burns Harbor,” Lauerman said. “If utilized correctly in the supply chain, (the) logistics industry could help reduce the amount of environmental impact.”

Ibrahim, planning manager for NIRPC, pointed out another consequence.

“E-commerce also will impact employment, where job training should be made available to accommodate advances in technology,” she said.

The Region must prepare for this shift and comprehend the broad range of e-commerce impacts to benefit from its influence on our future, Ibrahim said.

Ivy Tech Community College offers educational opportunities in advanced logistics. Lauerman said several of the major developers in Lake County plan to incorporate workforce training to ensure a steady pipeline of workers.

The further expansion of e-commerce will impact urban logistics and change roadway system use and needs. It will increase demand for facilities such as warehousing, distribution centers and last-mile delivery. These facilities, located increasingly within urban areas, require interstate highway access to accommodate more frequent daily truck traffic.

These operations also require larger workforces than traditional warehouses, even with increased automation. The trend inevitably will lead to more trips by employees coming from areas with limited transit service options and working multiple shifts, experts say.

Additionally, it increases the number of nonpeak-period trips into residential areas, impacting safety. These trips include traditional delivery services such as FedEx, UPS, USPS and independent contractors who use personal vehicles to transport packages for companies like Uber.

Scott Weber
Scott Weber

“E-commerce is an important way for regional economic transformation and development, improving the quality of economic operations and enhancing international competitiveness,” said Scott Weber, transportation planner and analyst for NIRPC.

Lauerman said that, for almost two decades, transportation, distribution and logistics, which includes third-party logistics, warehouse, cold storage and e-commerce facilities, has been one of the target industries that the seven-county Region attracts.

“And we continue on that path to capitalize on our infrastructure assets,” she said.

NWI’s transportation network employs many modes that accommodate travel needs.

The Region is home to 5,800 linear miles of roadways equaling over 13,000 total lane miles. It is also a great freight hub in the central U.S. The Region should harness the opportunities presented by e-commerce to ensure our communities leverage the benefits, experts say.

“Retail stores may be diminished, but distribution centers continue to be fundamental for expanding logistics networks,” said Peter Kimball, regional planner for NIRPC. “Living near a shopping location becomes less important when ordering everything online and having it delivered to the home.”

Kimball said the potential for working remotely enabled by the internet allows for greater opportunities to live in remote locations.

Looking to the future

As home shopping grows, malls and other shopping centers will likely need to be refurbished into logistics hubs, supply spaces or removed altogether, and the land redeveloped for other uses.

Randolph Building
The Randolph Building at 1575 Louis Sullivan Drive in AmeriPlex at the Port houses the Fronius USA headquarters. (Photo provided)

E-commerce warehouses will grow larger in urban locations and generate more daily truck traffic, which local communities and regional entities need to consider in their planning, experts say. Express delivery services may result in challenges to mixed-use developments with limited freight zones and multiunit housing with limited storage for packages and fresh food deliveries.

In NIRPC’s report, the team made several suggestions for what the Region can do to raise its profile in this sector:

  • Improve transportation network connectivity to mitigate congestion on major arterials and interstates by analyzing freight data to identify truck freight bottlenecks.
  • Establish a regional real estate market outlook for warehouses, fulfillment centers and logistics. Through the collaboration of the Northwest Indiana Forum and other economic development agencies, a true regional market study and cost comparison is already in the works to address transportation, distribution and logistics, including e-commerce distribution facilities.
  • Create loading zones on high traffic roads to make it easier for delivery drivers to find space and access buildings without impeding other road users.
  • Increase and prioritize funding to improve urban freight movement and continue to raise the Region’s profile as a thriving place to do business. Raising the Region’s status is ongoing with LCEA and other regional economic development partners.
  • Work with intermodal facilities and e-commerce carriers to identify locations with high freight movement levels and map out strategies for alleviating freight-related congestion.
  • Redevelop blighted sites, vital for inner-ring communities with no land available to grow their tax base.
  • Property owners and real estate investors need to focus on location, innovation, building efficiency, and flexibility by capitalizing on urban areas with high population density and high-growth areas. The future of retail is more likely omnichannel in nature, and an omnichannel approach to retail can be applied to any form of a shopping center or big box store in any setting. Many large chain retailers have substantially reduced their footprint in recent years.

However, the concept of the traditional town center is making a comeback. It purposely includes mixed uses of retail, work and entertainment with residential and accessible transit.

Retailers have been forced to reconsider their role in the marketplace and find new, creative ways of getting customers back in their stores with the increase of online shopping, the experts said. For example, some retailers introduced “retailtainment,” a concept from the late ’90s that provides customers with unique and entertaining experiences that promote shopping on new levels.

“NWI still needs to work on repurposing the vacant retail spaces,” Ibrahim said. “As a result of e-commerce, some physical shops and retailers struggle, and some are forced to close.”

Ibrahim said empty spaces have increased in malls and shopping strips.

“We need to forecast demand for future land development and the requirements of logistics use to accommodate future e-commerce needs,” Ibrahim said.

Lauerman said it is important to note the Region does not have an abundance of vacant large-scale stores.

“Many of our storefronts currently available are smaller in footprint or are hospitality and restaurants,” she said. “LCEA always looks at our open retail space for all projects, provided the community will welcome that new purpose and rezone or provide special use variance for the end user (company) and its operation.”

Big names bring opportunities

E-commerce, including Amazon, have targeted Northwest Indiana for growth.

“Northwest Indiana has a number of advantages in today’s climate, specifically the tax environment and fiscal stability of Indiana compared to other states,” said Brandon Dickinson, economic development director for the city of Valparaiso. “If Northwest Indiana communities can meet the opportunities while enhancing quality of life, this could be a time of tremendous growth for both residential and commercial efforts. It’s an exciting time with a lot of possibilities.”

He said, because of its location between Chicago, Lafayette and Indianapolis, I-65 seems like a natural spot for e-commerce distribution centers.

“Indiana is a Crossroads of America for a reason — we’re well situated logistically for these,” Dickinson said.

Ed Moser
Ed Moser
Tim Healy
Tim Healy

The Gary airport is one of those big pluses. It has been focusing its efforts on growing the freight side of its operation. The airport recently landed UPS as a major tenant.

“The Gary, Indiana, airport was the optimal place to position a new UPS gateway to handle the demand for next-day-air pickup volume in the area,” said Ed Moser, UPS vice president of industrial engineering. “The proximity of the airport, versus Chicago O’Hare, allows more flexibility in pickup time for local customers and reduces overall UPS driver expense and miles driven.”

Holladay Properties has developed two of the larger mixed-use business parks in Northwest Indiana: AmeriPlex at the Port in Portage and AmeriPlex at the Crossroads in Merrillville. Both business parks are 400 acres and were built in the early 2000s.

“We have been peddling land and warehouse space in Northwest Indiana for 20 years and never have we seen such demand for land and e-commerce activity,” said Tim Healy, CEO of Holladay Properties. “Northwest Indiana is being recognized as a viable and economically advantageous location to tap the growing NWI market and easily service Chicago, Indianapolis and southwest Michigan.”

Click here to read more from the October-November 2021 issue of Northwest Indiana Business Magazine.


  • Christopher Adam

    Chris Adam is a freelance journalist, writer and editor with experience working in television, digital and print. He also is a volunteer crisis counselor and mental health advocate. Adam is an Indiana native with a degree in communications from Purdue University.


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