Why McHenry County is becoming a hub for the logistics industry

Denis Linic moved his family-owned trucking company, Basic Logistics Inc., to Crystal Lake five years ago.

The business had bounced around the Chicago metropolitan area since opening in 2014, but it settled in McHenry County due to several benefits, he said.

With more land to work with at a lower cost, Linic said it allowed him to set up shop close to several airports but still not in the way of other businesses. The spot is "right where we want to be."

"It's not too far out from anything," Linic said.

Linic is part of a growing number of logistics-centered businesses locating in McHenry County. With a rising need to both move wholesale products and, more recently, get packages to customers' doorsteps, several municipalities in the county are opting to allow more logistics businesses to come to town.

The boom of logistics in McHenry County can be attributed to a few factors, McHenry County Economic Development Corp. President Jim McConoughey said.

McHenry County is close to Rockford, Milwaukee and O'Hare International Airport, plus it has a strong workforce and ample space to build on, much of which is already equipped with necessary infrastructure such as gas lines.

With all it has to offer, McHenry County could see logistics make up about half of all business done in the county in the next decade, McConoughey said.

"It's a rough estimate, but it's growing that much," McConoughey said.

Although traditionally the industry has been seen as getting wholesale products to businesses, in recent years it has put much more emphasis on getting packages to everyday customers.

"The idea of logistics has forked off at various levels to mean different things for different groups," McConoughey said. "What it means for people is that I'm getting packages at my door within 24 hours, sometimes within a few hours."

The need for logistics is made even more evident when looking at the bottom lines of companies, said Frank Griffin, managing director of Chicago-based real estate firm Jones Lang LaSalle.

The largest expenses for businesses today are logistics costs, Griffin said. Other challenges have to do with the labor pool and whether there are enough workers to fill the demand. A few companies, for example, have buildings in the area sitting half-used because they can't staff the facility, he said.

Some are worried what the growth could mean for workers filling those jobs.

With the logistics industry growing at a "rapid pace," warehouse jobs that have traditionally been lower paying and come with safety risks could climb, too, said Tommy Carden, an organizer with the Chicago- and Joliet-based Warehouse Workers for Justice.

Although some say technological advancements make the job of a warehouse worker not only safer but more efficient, Carden said that is a misconception.

Additional technology, instead, means the pace of work is faster "and more grueling," Carden said.

"It's going to continue this way until workers come together and realize the real role they play in these global supply chains," Carden said. "Nothing moves without us."

As of the beginning of 2023, warehouse workers were making about $23 an hour in the U.S., according to Bureau of Labor Statistics data. That has fluctuated over the past decade but steadily increased dating back to 2013, when it was about $18 an hour.

Sergio Munoz, who delivers gas and diesel for Thorntons gas stations across Illinois, said he likes his job. The company is laid back and benefits are good, he said. He works about 60 hours a week.

Having been in the industry for more than a decade, Munoz said he believes trucking is getting safer. In addition to the safety restrictions put on truckers, including no cellphone, Bluetooth or walkie talkies while driving, trucks are equipped with sensors that will tell drivers if they're drifting or driving too fast.

"It's like driving my Honda Accord now," he said.

Huntley, which is in both McHenry and Kane counties, has seen many logistics firms move to the south end of town just off Interstate 90, including two Amazon buildings. Village President Tim Hoeft said the quality of jobs is something the village considers when thinking about these businesses.

Hoeft said he also believes that given the labor climate right now, which he thinks favors employees as companies scramble to find more workers, there's an ability for people to move up in these industries.

"Not everybody starts off as an executive," Hoeft said. "It's like any industry. There's room for advancement."

Marengo also is poised to add more logistics-related businesses because of the recent opening of an interchange at Route 23 and I-90.

Despite the growth, the future of logistics is one that feels uncertain, said Tammy Batson, director of the Center for Economic Education at Northern Illinois University.

While warehouse and storage employment numbers steadily increased from 2013 to 2022, with a sharp decrease around the time of the COVID-19 pandemic, they've begun to slowly decline since the start of 2022.

The reason for that could involve a couple factors, she said. For one, the booming demand coming out of the COVID-19 pandemic resulted in the creation of many new businesses, which in some ways has created an oversaturation.

Linic said he's seen as much in his business. Coming out of the pandemic, what started as a huge need for shipping has turned into a slowdown given how many businesses are offering such services.

Many companies also are now bringing manufacturing back to the U.S., Batson said. Businesses were stuck in the pandemic with a need for certain supplies and no way to get them. It's more reliable to have it close by than across the world.

As a result, the need for long-haul shipping won't be as necessary as in previous years, she said.

Griffin, meanwhile, believes there is still room to grow. Many companies are now closing up their brick-and-mortar shops and opting for an online-only approach, he said. That will mean a steady demand for shipping needs.

"E-commerce is here to stay," Griffin said. "I would say we're going to see growth there. I don't see a pullback."