By the BF Staff
From the March/April 2021 Issue
The mismatch between demand for global container shipping services and available capacity caused shipping costs to skyrocket in the fourth quarter of 2020, according to S&P Global Platts.
As of December, S&P Global Platts’ global benchmark reached $3,561 per forty-foot equivalent unit, or FEU, compared to $1,660 per FEU on Sept. 30, 2020, and a trough of $985 per FEU on Feb. 28, 2020. That in turn has led to a bunker excluded rate, a rough proxy for the profitability of the container lines for the fourth quarter of 2020, at over $3,600 per FEU on North Asia to U.S. West Coast routes, nearly four times the level of a year earlier, Platts said.
Rates are expected to ease this year as market fundamentals stabilize and new government regulations are implemented. DHL Express (USA) Inc. has stated it could take until the second half of the year to return to normality.
An unprecedented cargo surge that erupted during the second half of 2020 at the Ports of Los Angeles and Long Beach has continued into the new year. Record-setting imports have produced a traffic jam at sea that has huge container ships backed up for miles, forcing some vessels to divert to smaller ports.
Port of Los Angeles Executive Director Gene Seroka, in a virtual news conference in February, said cargo numbers at the port were up by 3.6 percent in January compared to the same month a year ago. It was the sixth consecutive month the port had a year-over-year increase.
MISSISSIPPI DELIVERS RESULTS
Mississippi is rapidly becoming well known to companies with shipping needs as an ideal location to set up operations, as evidenced by the state’s burgeoning warehousing and distribution industry.
Located in one of the fastest-growing regions of the U.S. and within a day’s drive of many of the nation’s top business centers, Mississippi boasts a well-integrated transportation system that allows companies quick, convenient access to both domestic and international consumers. The state’s divided four-lane highways, six interstates, 14 federal highways, access to 25,000 miles of rail, numerous airports, three navigable waterways and 15 ports—two of which are deepwater ports on the Gulf of Mexico—allow companies to excel in distributing goods to both domestic and international consumers.
Amazon is one of many industry leaders taking advantage of a Mississippi location—several Mississippi locations, in fact. In 2018, Amazon announced the location of its first fulfillment center in the state in Marshall County in North Mississippi, a strategic move in the company’s ongoing efforts to grow its distribution network. Amazon chose to locate in a 554,000-square-foot facility in Panattoni Development’s Gateway Global Logistics Center, which is conveniently located near I-269 and other key transportation options. The company created 850 jobs to support its first Mississippi operation.
In 2019, Amazon announced the location of its second Mississippi fulfillment center in Olive Branch, also in North Mississippi, as well as the creation of 500 more jobs for the region’s talented workforce. Located in a 1 million-square-foot facility in Olive Branch’s Legacy Park, the fulfillment center’s associates ship large items, including such items as sports equipment, patio furniture and bicycles.
In November of 2020, Amazon announced it would open a third fulfillment center, this time in Madison, Mississippi. When it opens later this year, it will be the first facility in the state to feature Amazon’s innovative robotics technology. This center will create more than 1,000 new, full-time jobs.
While Amazon’s multiple Mississippi locations have put the state on industry leaders’ radars, a number of other well-known companies also have recently opened distribution facilities in the state.
In June 2020, Associated Wholesale Grocers announced plans to expand in North Mississippi by constructing a 918,000-square-foot automated distribution facility in Hernando—a $300 million corporate investment that is creating approximately 80 jobs. AWG is the nation’s largest cooperative food wholesaler to independently owned supermarkets, serving more than 1,100 member companies and more than 3,000 locations throughout 28 states.
In 2019, O’Reilly Auto Parts announced the location of a distribution hub in Horn Lake, a project that created 380 jobs in the DeSoto County community. The company retrofitted a 580,000-square-foot facility, located in the DeSoto 55 Logistics Center, to house its distribution operations.
Also in 2019, Corelle Brands celebrated the opening of the company’s 786,000-square-foot manufacturing and distribution facility in Marshall County. The company is a leading American manufacturer and marketer of iconic houseware brands such as Corelle®, Pyrex®, Instant Pot®, SnapWare® and CorningWare®. The new, fully integrated facility serves as the sole site for Corelle Brands’ plastic manufacturing and the distribution center for many North American customers. Corelle Brands created 400 jobs in connection with the new facility.
Healthcare company Medline Industries, Inc., announced in August 2019 the company was locating distribution operations in Southaven, a $46 million corporate investment that is bringing 450 jobs to North Mississippi. According to the company, the Southaven location provides ideal attributes that will enable Medline to accommodate its growth, including convenient access to the Southeastern U.S. market, a talented local workforce and a good quality of life. Medline is the largest privately held manufacturer and distributor of medical supplies and products, providing more than 350,000 products to hospitals, extended-care facilities, surgery centers, home care dealers and agencies and physician offices.
These companies join the ranks of Toshiba America Business Solutions, Milwaukee Tool, Post, Hearthside Food Solutions/Kellogg’s, Chiquita Brand International and so many more that have located state-of-the-art distribution operations in Mississippi. In addition to its extraordinary transportation network, ideal location in the U.S., being located within a day’s drive of 100 million consumers and pipeline of skilled workers, Mississippi has a multitude of other attributes that enable distribution companies to achieve long-term success in the state. The Mississippi Development Authority offers a strong incentives portfolio, which includes the Free Port Warehouse Exemption and other tax exemptions specifically tailored to companies with distribution centers in the state, to best meet the needs of companies seeking to locate or expand in Mississippi.
MISSOURI: GLOBAL ACCESS
Missouri sits in the center of North America, providing unmatched logistical advantages for companies that need to move their products quickly and efficiently. As e-commerce continues to soar, so does the need for distribution centers—and growing companies are selecting Missouri for their newest facilities.
The state has seen a tremendous amount of success in logistics and distribution, welcoming nearly $225 million in new capital investment in just the past few months. For example, e-commerce giant Chewy, Inc. recently announced plans to build its newest state-of-the-art fulfillment center in Belton, Missouri. The company sells a variety of pet-related products online. The new 800,000-square-foot facility is currently under construction and will be one of the largest in the company’s network.
“We are thrilled to open our first fulfillment center in Missouri and continue to grow our team. We’re so excited to be a part of this community and look forward to having a presence in the region,” said Diane Pelkey, Vice President of Communications and PR at Chewy.
BoxyCharm is also opening a new distribution center in the state, investing $50 million and creating 250 new jobs. Melaleuca, Inc., Optimas Solutions and Kenco Logistics Services, Inc. are also among the newest companies to leverage the state’s strengths in logistics and distribution and open new facilities in Missouri. Major investments from these companies confirm and solidify Missouri’s position as a premier location for these types of operations.
Missouri is a top choice for companies such as Amazon, CVS Pharmacy, and Dollar Tree, not only because of its central location, but also due to its easy global access. Missouri borders eight states (tied for the most of any U.S. state), which puts businesses at a serious strategic advantage with convenient access to North American target markets via road, rail, waterways or air.
Missouri boasts the nation’s seventh-largest highway system, with more than 30,000 miles of highways, including major interstates I-64, I-44, I-70, I-55, I-35 and I-29. Companies in Missouri can deliver goods quickly since the state is within a day’s drive of half of the continental U.S. Businesses in Missouri can also access the rest of the world via rail since every United States Class 1 railroad travels to Missouri. The state is home to the northernmost ice-free port on the Mississippi with unrestricted access to the Gulf of Mexico. The Missouri and Mississippi Rivers converge in the state, and there is an extensive river barge system. This creates a prime asset for both business and recreation. The state also has dozens of airports, including two international, that provide non-stop service to 70 destinations across the continent.
At presstime, it was announced that Kansas City Southern and Canadian Pacific agree to combine to create the first North American rail network. If it receives final approval from the Surface Transportation Board (STB), the transaction will combine the two railroads to create the first rail network connecting the U.S., Mexico, and Canada. Joining seamlessly in Kansas City, MO., in America’s heartland, CP and KCS together will connect customers via single-network transportation offerings between points on CP’s system throughout Canada, the U.S. Midwest, and the U.S. Northeast and points on KCS’ system throughout Mexico and the South Central U.S.
Missouri’s logistical advantages connect businesses in the state to the world—but the connections don’t end there. In Missouri, companies are connected to people. Missouri’s central Midwest location places businesses at the heart of the nation’s population center. For the last 40 years, a Missouri city has been named the center of the U.S. population. It’s more than just a fun piece of trivia, it’s a huge advantage for any company that needs to distribute products to customers quickly.
Missouri’s largest metros include St. Louis, Kansas City, Springfield and Columbia, and with more than 6 million people spread across nearly 70,000 square miles, Missouri’s geography and assets are as diverse as the state is expansive.
And company executives are just one phone call away from business leaders and others who will support their growth and success. In Missouri, there’s an extremely friendly business environment, so connecting with important partners and other industry leaders is easy.
Another important connection is the one between talent and employers. Missouri’s workforce is top-ranked. At more than 3 million strong, Missouri’s talent pool is deeper, more qualified and more prepared to deliver the level of expertise companies need.
Missouri recently implemented a comprehensive strategic approach to take workforce training to the next level and has risen to the top in customized training. When it comes to talent development—Missouri is a leader.
Missouri is arguably the best location in the U.S. for distribution centers. The state’s central location, robust infrastructure and access to talent are huge advantages for any company that needs to manufacture and distribute products to customers fast. As the need continues to increase for operations in this field, Missouri will remain an investment destination thanks to its remarkable assets.
MOKAN: BRINGING GROWTH TO SEVEN COUNTIES IN MO, KS AND OK
Located in Joplin, Missouri, the MOKAN Partnership helps communities advance major business development in the tri-state region. Spanning seven counties across southwest Missouri, northeast Oklahoma and southeast Kansas, and funded by community and industry partners, the Partnership works with new and existing employers to bring business, growth and opportunity to the region.
MOKAN and its economic development partners have incentives for business attraction and expansion through Enhanced Enterprise and Opportunity Zones, Chapter 100 bonds, sales and property tax deferments, workforce training grants and small business revolving loan funds, among others. The Partnership uses these tools to grow and attract major capital investments and job creation, adding more than 1,000 jobs and 1 million square feet of warehousing and distribution centers in 2020 alone.
This region is well known for manufacturing and logistics, as well as its solid Work Ready Community Certified workforce—the first in the nation at that time to ever be certified. Stretching from Pittsburg and Columbus in Kansas to Lamar, Carthage, Joplin, Neosho and Pineville in Missouri to Miami, Oklahoma, nearly 305,000 people live and work across this regional hub at the crossroads of Interstates 44 and 49, Highway 60 and Route 66. With 16 infrastructure-ready industrial parks, this area is already home to major national brands, Fortune 100 and 500 industry leaders and their supply-chain support companies. The region offers plenty of unique possibilities, including multiple shovel-ready business and industrial park options within a 30-mile radius of Joplin. Since 2012, the Joplin metropolitan area alone has exceeded $100 million in major infrastructure improvements. With state and federal support, nearly 40 percent of the area’s roadways, sanitary and stormwater have been upgraded through an aggressive, rolling annual capital improvements program.
“If you look a bit more closely, it makes sense,” states Tony Robyn, MOKAN director. “In addition to a regional workforce participation rate of over 60 percent, another key market incentive is the lack of warehousing inventory taxes. And, of states with a corporate income tax, Missouri has one of the lowest rates in the U.S. at 4 percent. Couple this with some of the lowest overhead in the country here—Joplin, Missouri, was recently announced as 9th, Pittsburg, Kansas, 4th, in the top ten least expensive places to live in the U.S.—and aggressive state and local tax abatements and incentives, you quickly see why businesses and people land here.”
The region’s infrastructure and transportation network rivals any and includes rail- and industrial-certified sites, four of the nation’s largest trucking fleets, a regional port and booming industrial parks. Two-day shipping is uniquely possible to nearly every U.S. location from here. And completion of the final Bella Vista Bypass leg in fall 2021 rounds out the “I-49 Connector” between its two major market regions of southwest Missouri and northwest Arkansas. The corridor is already the primary artery for moving people and products between the two, and opens up a huge growth opportunity for business and housing as well as remote working from southwest Missouri and the area.
Regional utilities like Liberty provide a diversified portfolio to meet energy needs, ensuring smooth, efficient services even in the highest demand scenarios. A regional water system draws a steady supply from a combination of groundwater aquifer wells and surface water impoundments. Missouri American Water is thoughtfully planning for the future and currently adding an additional 1,500-acre detention basin to the system to meet projected regional growth demands.
“We continue to see major investments here despite wide-ranging market challenges seen in other regions. Our market tends to be somewhat insulated from broader economic fluctuations and our food and beverage manufacturing industry and demand is greater than ever. The new Kansas City University College of Dental Medicine in Joplin and regional investments from Freeman Health System and other major area hospitals like Mercy, Integris and Ascension via Christi are helping drive a growing biomedical cluster.
Industry leaders know the costs of doing business and the best ways to find cost-effective resources to develop their products and get them to market. We know people need quality of life and diverse places for families to grow and prosper. We know you need local on-the-ground information and resources to not only develop and maintain continuity of operations, but also to expand your footprint. MOKAN has those tools to meet your needs,” says Robyn.
The MOKAN region is more than just a place to work or live. It’s an ideal intersection of people and business at the Crossroads of America at I-44/I-49. Site selectors find that investments go further here with lower national costs of living and doing business.
PIEDMONT TRIAD AIRPORT: $9 BILLION IN ECONOMIC IMPACT
The Piedmont Triad International Airport in central North Carolina is a hub of aerospace employment thanks to companies such as Honda Aircraft Company, Textron/Cessna, FedEx Express and HAECO Americas—all of which have major operations at the airport.
Employment on the airport campus totals more than 8,600, which makes the airport one of the top five employers in the Piedmont Triad Region, according to the Triad Business Journal, a local business publication. But that’s only part of the story.
A recent economic impact study conducted by researchers at North Carolina State University determined that the airport is responsible for employment of more than 30,000 people in the region and has an annual economic impact of roughly $9 billion—all of this in a traditionally blue-collar region best known until 20 years ago for tobacco, textiles and furniture.
“The Authority believes that the airport has a crucial role to play in local economic development,” says Kevin Baker, the airport’s executive director. “We are a passenger airport, certainly, and we take that responsibility very seriously. But our airport is also uniquely positioned to attract and keep large employers. We have an ideal location at the center of the East Coast, we have direct Interstate highway access, we have runway capacity, we have large tracts of land available for development and we have a track record of successfully completing large, complex projects.”
The seeds of PTI’s growth into an economic development powerhouse were first sown about 30 years ago when two major employers moved onto the airport. First, Cessna (now owned by Textron) opened a maintenance base for its Citation line of jets. That service center has now grown to be one of the largest in Textron’s system.
About the same time, TIMCO was founded on the airport as a third-party Maintenance Repair and Overhaul (MRO) operation. TIMCO grew significantly over the years and was later acquired by HAECO. HAECO is one of the largest third-party MRO’s in the world.
The pivotal moment in the region’s aerospace development came 10 years later, when the airport attracted the attention of delivery giant FedEx. The company was looking for a place to locate a 1 million-square-foot Mid-Atlantic Hub, which could sort 24,000 packages an hour overnight and send them back out in the early morning hours.
When the hub opened at the airport in 2009, it had brought with it a new 9,000-foot runway, parallel to the existing 10,000-foot runway, a new highway interchange providing immediate access to nearby Interstate highways and overnight delivery capability that was attractive to companies that were beginning to depend on overnight delivery as a business necessity.
“When FedEx located at the airport, it was a game changer for the Piedmont Triad,” says Stan Kelly, president of the Piedmont Triad Partnership, the region’s economic development organization. “The hub established the region as a viable 21st Century distribution center. Today, in addition to the FedEx air hub, we have a major FedEx Ground hub and an Amazon fulfillment center located nearby.”
Next to arrive at the airport was the Honda Aircraft Company, manufacturer of the HondaJet, which is a top seller in the light jet category. Michimasa Fujino, who developed the innovative design for Honda, completed research and development of the jet at PTI and tested the first prototype there.
When Honda made the commitment to manufacture the new type of jet, competition was fierce to have the company locate in larger cities around the country. Airport officials went to work to make the case for Honda to locate at PTI.
“Honda is an aircraft manufacturer,” Baker says, “which means that they would be a large employer providing good jobs. Attracting a company like that is something that every community would like to do.”
Honda’s decision to locate at the airport solidified PTI as ground zero for a growing aerospace industry that has taken root in the Piedmont Triad, a region of moderate temperatures and gently rolling hills in the heart of North Carolina anchored by the three cities of Greensboro, High Point and Winston-Salem. The region is now home to nearly 200 aerospace companies.
In 2014, when international maintenance and repair giant HAECO purchased TIMCO, and made the airport facility its North American headquarters, the airport’s aerospace trifecta was complete. Now the airport was home to key companies from the cargo sector, from the manufacturing sector and from the third-party maintenance and repair sector.
“Two decades ago, our region faced a crisis,” says Kelly, president of the Piedmont Triad Partnership. “Tobacco and textiles were leaving. We needed to diversify. The airport became the lynchpin of a new industry for us—aerospace.”
PTI leadership is still looking forward. The Airport Authority has acquired and cleared more than 1,000 acres of new property, all with direct access to the airfield and served by numerous interstate highways. The airport sites have been graded, received preliminary environmental approval and are ready for development.
“We understand that when aerospace companies decide to develop a new location, they don’t want to wait for a site,” Baker says. “When the next aerospace opportunity presents itself, we will be ready.”
MIDDLESEX COUNTY: ON TIME DELIVERIES IN ONTARIO
Middlesex County offers a rich rural-urban landscape in the heart of southern Ontario. Complete with all the must-haves for multi-nationals or local businesses looking to expand or upgrade facilities, Middlesex offers a prime location, affordable land prices, an educated workforce, multilevel government support and a desirable quality of life.
If your company relies on “on time” deliveries, you’ll appreciate the access to three border crossings within a two hour drive. The 401 and 402 series highways are vital in transporting goods to destinations across the globe. Rail and air transport are locally available with both Canadian National and Canadian Pacific traveling through the County and the London International Airport offering a central location for both cargo and people. Also located about an hour from here is port access to the Great Lakes’ shipping channels.
As per the County’s economic development plan, there are eight strategically located business parks with a mix of private and municipal ownership for companies to plant their roots on. Middlesex County’s recent growth patterns reflect positively on how firms are responding to what they find. The municipality’s “prepared-to-do business” approach is credited as one of the many reasons why companies such as Bonduelle North America, Gray Ridge Eggs, Catalent Pharma Solutions (Molnar Park), Armatec Survivability (DaVinci Park), Ideal Pipe and Algonquin Bridge (Thorndale Park) call Middlesex home. The Glencoe and Thorndale Business Parks are Ontario Investment Ready Certified Sites and have set the bar for being “business ready” by achieving this elite ranking. Risk reviews can be reduced and construction time advanced with the completed upfront work of gathering property information, mapping and already completed environmental, heritage, archaeological and species assessments. Companies prospecting for the optimum mix of location, (including attractive property pricing) and additional amenities, really strike it rich in Middlesex.
With a population of 426,139, the City of London is Canada’s 11th largest city, which serves as an advantage to Middlesex given the access to established economic sectors, and the many graduates from Western University and Fanshawe College. Both education institutions rank high as leaders in research and public/private partnerships so it’s no wonder why Stats Canada (2016) identified Middlesex County residents as possessing an education level higher than the national average.
The quality of life in Middlesex is enhanced by the celebration of arts and culture and the vibrant shopping and entertainment options. As well, short commutes, traffic that moves, fresh air, safe spaces and active living options can all be accessed by families in its intimate communities. This is a place where front porches are used, street hockey is played and children walk to school. Come see for yourself why businesses call Middlesex County “home.”
RIDING THE RAILS IN MARION, OH
Jaguar Transport Holdings (headquartered in Joplin, MO) acquired Marion Industrial Center on October 30, 2020. The 510-acre distribution and manufacturing facility located in Marion, Ohio, has been renamed Marion Industrial Rail Park, to enhance the focus on the great rail infrastructure at the site.
The handling operations of the rail park are operated by Marion Logistics Services. A full service 3PL operation handles the customer’s inbound and outbound product using barcode technology for inventory control. The Marion team members take pride being full-service while caring for their customers’ products. Marion Express, a trucking operation, is available onsite to fill trucking transportation needs for their customers.
Few communities in America can boast the rich heritage of Marion, a vibrant community best known as the home of Warren G. Harding, the nation’s 29th president. Among other notable Marionites are former Miss America Marilyn Meseke, agricultural industrialist Edward Huber, inventor of the revolving hay rake, and Mary Ellen Withrow, the first woman to serve as U.S. Treasurer.
Along with the Marion Industrial Rail Park, Marion’s manufacturing heritage includes specialized power shovels that were key to building the Panama Canal, and two customized crawlers built for NASA that moved Apollo Mission Saturn V rockets to the launch pad that sent men to the Moon. The crawlers, known as Hans and Franz, are still in use by NASA today. Today, Marion is home to manufacturers such as Whirlpool, Nucor Steel, ArcelorMittal, Union Tank Car Co., Mennel Milling, Morral Companies, Piston Group, RobotWorx, Royal Group, Central Ohio Farmers Coop, Sakamura USA, Sims Brothers Recycling, US Yachiyo, Wilson Bohannan Lock Co., Silverline Windows, Sika, Wyandot Snacks and many others.
Marion and neighboring corn growers fuel America’s transportation with ethanol production by POET Biorefinery. Farming contributes about half of Marion County’s economic output.
As America’s Workforce Development Capital™, Marion prepares the workforce of tomorrow through an educational corridor that includes Ohio State University Marion, Marion Technical College, Tri-Rivers Career Center/RAMTEC, Marion City and County School Districts, partnering with businesses through the Marion Area Workforce Acceleration Collaborative. RAMTEC is recognized as one of the nation’s premier providers of robotics and advanced manufacturing industry certifications.
Marion, OH, is recognized as America’s Workforce Development Capital for a reason. Marion’s educational corridor serves as a regional hub for innovative and solution-oriented workforce education and training. The workforce development community operates as an integrated system aligned to ensure that business and industry have access to the right talent, for the right job, at the right time.
Marion’s K-12 programs are STEM award winning; Tri-Rivers Career Center gave rise to Ohio’s first Robotics and Advanced Manufacturing Technology Education Center (RAMTEC); Marion Technical College is a National Science Foundation grant recipient for the development of a Smart Manufacturing associate degree program; and Marion’s regional campus of the Ohio State University has recently completed construction of a top tier Science & Engineering Building which operates in partnership with area industry to offer a bachelor of science in engineering technology.
OhioMeansJobs: Marion County is a comprehensive resource to existing and prospective companies as a full-service workforce center. Certified Business Engagement Professionals are available to tailor services and deliver results which are responsive to the specific needs of each business. Services are at no cost and include:
- Employee Recruitment
- Applicant Screening & Testing
- Targeted Advertising & Outreach
- Training Reimbursement for New Hires and Existing Employees
- Youth Workforce Programs
- Benchmarking Data
- Consultation & Research
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