My absurd experiences in North America over the years

In mid-September, the day after Li Fu returned to Los Angeles, Morris's proposal was delivered to his desk.

The entire business plan was a thick stack of pages; if it were made into a PowerPoint presentation, it would probably take a whole morning to show it. The cover was printed with "Forrest Capital's Great Lakes Logistics Network - Ten-Year Strategic Plan".

Below is a line of smaller print: "Feasibility Study on Toledo Multimodal Transport Hub and Last-Mile Delivery Network".

Li Fu opened the cover, turned to the first page, and glanced at the table of contents. The first thing that caught his eye was the "Total Investment Estimate" section.

It's a staggering two hundred billion US dollars.

At this moment, even someone like him, who often invests hundreds of millions or even billions, was a little bewildered.

I told you not to set a limit, and you went straight for 20 billion?

He didn't immediately get up; instead, he leaned back in his chair, his gaze fixed on the sea outside the window in Malibu.

No one knew better than him that the total amount of money Forrest Capital had not originally invested, plus the funds it had recovered from the New York real estate project, Nashville infrastructure project, and Big Machine Records project over the past six months, was only a little over two billion.

The joint fund will not distribute dividends until at least the end of the year. Domestic investments are still in operation, and it will take at least three to five years to see profits.

Is 20 billion too large a scale?

Li Fu took a deep breath and decided to take a look first.

He reopened the cover, and found that Morris's proposal was more comprehensive than he had imagined, covering warehousing, distribution, logistics and the construction of last-mile networks, with all details documented.

First is the hub network.

The core of the proposal relies on the existing infrastructure in the Great Lakes region, including ports such as Toledo, two interstate highways (I-75 and I-80/90), and two rail lines (Norfolk Southern and CSX).

Taking advantage of the integrated transportation system of railways, highways, and waterways, twenty large-scale multimodal transport hubs will be built within ten years.

The initial phase will focus on Toledo, with subsequent expansion to cities such as Detroit, Cleveland, Columbus, and Chicago.

Each hub includes a warehousing and sorting center, a freight dispatch station, and supporting office facilities, serving a population of 500 million in the surrounding area. Once completed, it will cover the entire core area of ​​the Great Lakes region.

Warehousing and automation equipment is the second largest category.

The proposal estimates the storage area of ​​twenty hubs in detail, with each hub having approximately 100 million square feet (9.29 hectares), totaling 2000 million square feet (180.56 hectares).

2010年仓库建设成本约每平方英尺125到150美元，光土建就是25到30亿美元。

If you add equipment such as automated sorting lines, conveyor belts, and WMS warehouse management systems, the total investment will increase by another $30 to $40 billion.

Next is the last-mile delivery network, namely the "community self-pickup point" system.

To cover 100 million people, approximately 15,000 community self-pickup points need to be established.

These self-pickup points are embedded in the community in the form of Cainiao Stations. The renovation cost of each station is about $2 to $3, totaling $3 million to $5 million.

The site will provide an annual operating subsidy of $1 to $2 during its initial operation, totaling $15 billion to $30 billion.

Furthermore, information systems and digital platforms are the "brain" of the entire system.

These include warehouse management systems, transportation management systems, last-mile delivery scheduling platforms, data analysis systems, and open API interfaces for merchants.

The total cost for software and hardware development, data center construction, and network infrastructure deployment is approximately $15 billion to $20 billion.

土地收购与前期準备方面，二十个枢纽每个需200-500英亩土地，按铁鏽带地价每亩5000到20000美元估算，总计5到10亿美元。

If environmental assessment, planning and design, and approval costs are added, the initial investment is approximately $8 million to $12 billion.

In terms of operating funds and buffers, $30 to $50 billion needs to be reserved over a ten-year period as operating funds and buffers to cover personnel salaries, equipment maintenance, marketing, and a safety net to cope with cyclical fluctuations.

Li Fu turned to the last page and saw the summary made by Morris:

Hub construction (civil engineering + equipment): US$55-70 billion

Last-mile pickup network: $18-35 billion

Information systems and digital platforms: $15-20 billion

Land acquisition and preliminary preparations: $8-12 billion

Operating funds and buffers of $30-50 billion

Totaling $126-187 billion

At the bottom, there is a note: "The above are all conservative estimates. Taking into account inflation and unforeseen factors, the total budget is recommended to be planned at US$200 billion."

Li Fu couldn't help but laugh after reading it. This guy really dares to write!

What kind of giant would dare to invest like this?

Amazon's investment in warehousing and logistics seems to be over 10 billion, but what is the scale of their business?

Forrest Capital's prospects lie in the future.

However, to be fair, he felt that if he really invested like this, he would definitely make money, and at the same time, it could provide more than 100,000 direct and indirect jobs.

One hundred thousand jobs mean one hundred thousand families. If we also consider the marginal effect and public opinion, the number of votes that can be garnered is at least in the millions.

Which politician around the Great Lakes can stand up to the CCP and the Forrest family?

After careful consideration, Li Fu concluded that the feasibility rate was over 70%.

Moreover, this is a ten-year investment. If 200 billion is extended over ten years, the annual investment is entirely affordable.

In fact, in three to five years, it won't be a problem at all.

So he sat down again and looked through the detailed plans and budget for the first phase of the project.

details as follows:

• Main site: Abandoned auto parts factory in the south of the city, 50 acres (approximately 202,000 square meters), adjacent to I-75 highway, less than 4 kilometers from the railway line, and about a 15-minute drive from the Port of Toledo.

The current asking price is $300 million, but it is negotiable.

• Subsidiary Plot A: Three connected warehouses in the north of the city, with a total area of ​​approximately 6 square feet (approximately 5,500 square meters), with intact concrete frames, priced at US$120 million.

• Auxiliary Plot B: A vacant 12-acre yard near the port, suitable for container turnover and cold chain storage expansion, priced at US$80.

The three plots of land total approximately 62 acres, with a total price of about $500 million. This price is incredibly low for the core areas of the East and West Coasts.

Of course, there's a reason why it's so cheap.

The average price of industrial real estate in Toledo is about $44 per square foot. Their land acquisition costs are far lower than the market average, mainly because these plots have been idle for many years, and the local government is willing to sell them at low prices in exchange for jobs.

The second part is the main hub construction plan (50 acres of land in the south of the city).

The main hub is the core of the entire project, planned as a modern logistics center integrating road, rail and water transport.

设施主要为80万平方英尺（约7.4万㎡）的包裹分拣中心、40万平方英尺（约3.7万㎡）的仓储区、15英亩的货柜堆场和5英亩的卡车调度中心。

The parcel sorting center is equipped with automated sorting lines, and theoretically, it can handle 50 parcels per day without any problem.

The storage area is equipped with high-bay racks, and the ambient temperature and cold chain zones can handle various types of goods.

The container yard needs to be able to accommodate 800 TEUs.

The truck dispatch center is expected to have 80 truck parking spaces and several driver rest areas.

In addition, there will be 5 square feet of administrative office space where management, IT, customer service and other staff will work.

Morris referenced Amazon and other logistics companies for construction costs, as detailed below:

Project Amount (USD Billion) Explanation

Land acquisition: 0.05 per plot; total of three plots.

Main building (120 million square feet) 0.8 Including sorting center, storage area, and office area

Automated sorting equipment: 0.4 conveyor belt, barcode scanning system, sorting robot

Cold chain storage equipment 0.15 Cold storage, temperature control system

Dedicated railway line and interface 0.15-1.5 mile track + loading and unloading platform

Container yard and hoisting equipment: 0.1m site hardening + gantry crane

Truck dispatch center, parking lot + supporting facilities

Information Systems (WMS/TMS) 0.15 Warehouse Management System + Transportation Management System

Unforeseen expenses (15%) 0.3

Subtotal approximately 2.18

Auxiliary facility renovation (three warehouses in the north of the city)

These three warehouses will not be newly built, but rather renovated and utilized, which theoretically will be faster and cheaper.

Project Amount (USD Ten Thousand) Explanation

Three warehouses acquired for 120

Roof renovation 80 waterproof + insulation

60mm epoxy flooring

Shelf installation 100

Sorting equipment (simple) 80

The other 60 are electricity, fire protection, and network.

Subtotal approximately 500 million

The three warehouses will be converted into forward warehouses, mainly serving same-day delivery within Toledo city and a 30-mile radius, with a turnaround time of 6-8 weeks.

Final total budget

Category Amount

Main hub (South of the city) US$2.18 million

Front warehouse renovation (northern part of the city) - US$0.05 billion

Port yard renovation: $0.05 billion

The first phase totaled approximately US$2.3 million.

第一期工程预计施工周期18-24个月，施工期直接创造800-1200个建筑岗位，间接岗位900-1300个。

Once completed and in operation, it will directly create 1500-2000 jobs and indirectly create 2500-3500 jobs.

投资回报周期按区域物流市场年均增长15%-20%测算，第5-6年开始产生盈利，第8-9年收回全部投资。

Of course, this does not include the later operational investment, the connection to the dedicated railway line, and the funds for setting up community self-pickup points—Cainiao Stations—after the logistics center is completed.

If Li Fu were to include everything, the figure would probably double.

However, this is still within our current means, and we could even build two regional warehousing centers simultaneously to accelerate the overall planning process.

After careful consideration, he decided to proceed with the plan, but not with Forrest Capital's full investment.

Instead, it would be better to bring in JPMorgan Chase, and ideally, a third or fourth party as well, simply to keep Forrest Capital's controlling stake above 51%.

"Book me a plane ticket to New York. We're going to see our old friend Jackson," Li Fu instructed Thompson.