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Location Notebook: Tennessee A Growing Hub for Logistics

With an already powerful industry cluster and a strong multimodal transportation infrastructure, Tennessee’s transportation / distribution / logistics sector continues to add jobs and investment.

Q3 2016
Nike’s LEED-certified North America Logistics Campus encompasses some 2.8 million square feet, with a perimeter of about two miles.
Nike’s LEED-certified North America Logistics Campus encompasses some 2.8 million square feet, with a perimeter of about two miles.
How do you build upon an already strong, massive foundation? One brick at a time.

The state of Tennessee is a powerful force in the world of logistics and distribution, and has been for quite some time. And yet the headlines of industry growth keep on happening, one by one, adding to an already bright picture.

Home-improvement giant Lowe’s offers one recent example. In July, the company unveiled plans to locate a new direct-fulfillment center in Robertson County, northwest of Nashville. It’ll be a $100 million investment that promises up to 600 new jobs to the community of Coopertown. The project will encompass about 1.1 million square feet and be operational by the latter part of 2018, initially employing about 400, with up to 200 more jobs possible by 2022.

Brent Kirby, Lowe’s chief supply chain officer, says the technology-driven project builds upon the area’s existing strengths in logistics: “The Nashville area was chosen due to its existing large shipping hubs, access to interstate roadways, and well-skilled workforce.”

The promise of as many as 700 jobs accompanied this past spring’s opening of an Academy Sports + Outdoors distribution center in Cookeville. The 1.6 million-square foot-facility is the company’s third distribution center, and it’ll support both bricks-and-mortar retail locations as well as e-commerce operations.

Another $100 million brick added to Tennessee’s logistics foundation late last year is Under Armour’s distribution and warehouse facility in Mount Juliet, outside Nashville. It’s a state-of-the-art facility, powered by advanced sorting methods, automated receiving technology, voice-directed picking software, and more than 12 miles of conveyors. Even with such high-tech efficiencies, the project is expected to create up to 1,500 jobs over the next few years.

Also opening last year was Nike’s biggest distribution center. Located in the Memphis area, it brings the company’s three product lines — footwear, apparel, and equipment — under one roof. A very big roof, in fact…the facility encompasses some 2.8 million square feet, with a perimeter of about two miles. Nike’s LEED-certified North America Logistics Campus-Memphis builds not only upon Tennessee’s logistics foundations but upon the company’s already long history in the Volunteer State, where it first opened a distribution center in 1982.

According to Trish Young, the company’s vice president of North America Supply Chain Operations, the latest facility elevates the supply chain in ways that impact Nike’s entire portfolio: “This facility was built to offer greater cost efficiencies, reduce shipping times, and increase service capabilities for our consumers and retail partners.”

Such projects represent only a sampling of the developments that demonstrate how effective Tennessee continues to be at piggybacking onto its already solid logistics sector. Already, the transportation/distribution/logistics sector employs more than 271,300, spread across nearly 17,000 establishments — and state and local economic development officials keep adding to those tallies with new projects. Clearly, the critical mass of a powerful industry cluster is making even more development happen, as is a combination of favorable location and strong infrastructure.

Recent Tennessee Logistics Sector Projects

With an already powerful industry cluster and a strong multimodal transportation infrastructure, Tennessee’s transportation/distribution/logistics sector continues to add jobs and investment.
  1. Lowe’s direct-fulfillment center - Robertson County, TN

    The company plans to locate a new direct-fulfillment center in Robertson County, northwest of Nashville. It’ll be a $100 million investment that promises up to 600 new jobs to the community of Coopertown. The project will encompass about 1.1 million square feet and be operational by the latter part of 2018, initially employing about 400, with up to 200 more jobs possible by 2022.

  2. Academy Sports + Outdoors distribution center - Cookeville, TN

    The promise of as many as 700 jobs accompanied this past spring’s opening of the Cookeville distribution center. The 1.6 million-square foot-facility is the company’s third distribution center, and it’ll support both bricks-and-mortar retail locations as well as e-commerce operations.

  3. Under Armour distribution and warehouse facility - Mount Juliet, TN

    A $100 million state-of-the-art facility, powered by advanced sorting methods, automated receiving technology, voice-directed picking software, and more than 12 miles of conveyors. Even with such high-tech efficiencies, the project is expected to create up to 1,500 jobs over the next few years.

  4. Nike distribution center - Memphis, TN

    Nike’s LEED-certified North America Logistics Campus-Memphis, the company’s biggest distribution center, brings the company’s three product lines — footwear, apparel, and equipment — under one roof. The facility encompasses some 2.8 million square feet, with a perimeter of about two miles.

A Strong Infrastructure
Among the infrastructure serving Nike’s Memphis distribution operation is one of Tennessee’s logistics crown jewels, Memphis International Airport, said to be the world’s second-busiest cargo airport, behind the airport in Hong Kong. That status is enabled by the presence of FedEx’s 862-acre World Hub, where about a million and a half packages are sorted every night, arriving and departing on some 140 FedEx aircraft that pull up to the hub’s nearly 200 aircraft gates.

All of the various transportation modes provide strong logistics connections from Tennessee, in fact. For example, Memphis is second only to Chicago and St. Louis as a rail center, and all but one of the nation’s Class I railroads operate in Tennessee, along with a dozen and a half short-line railroads. As for road transportation, Nashville is one of just four cities crossed by six interstate legs, and the state boasts nearly 100,000 highway miles. The Port of Memphis is the country’s fourth-busiest inland port, and it’s joined by ports in Nashville, Chattanooga, and Cates Landing. The state offers more than a thousand miles of navigable waterways, which together facilitate the transport of more than 30 million tons of cargo annually.

And though Tennessee is inland from the ocean, its water transportation options are strong, too — the Port of Memphis is the country’s fourth-busiest inland port, and it’s joined by ports in Nashville, Chattanooga, and Cates Landing. The state offers more than a thousand miles of navigable waterways, which together facilitate the transport of more than 30 million tons of cargo annually.

Tennessee’s ability to create new transportation/distribution/logistics jobs by the thousands doesn’t just happen, of course. Like most states, Tennessee is faced with the challenge of helping employers (and potential employers) connect with qualified workers. Indeed, as of the end of the summer of 2016, there were online listings for nearly 9,000 Tennessee jobs in transportation and warehousing.

Tennessee has taken a highly proactive approach to avert worker shortages, hoping that strong workforce development efforts will help the state stand out in the crowd. Its Workforce360° initiative, for example, partners state agencies and educational institutions, trying to align and leverage state resources to fill workforce gaps. Multiple programs aim to help the state boost its residents’ participation in higher education. And the Jobs4TN.gov recruitment program puts state power behind the processes of pre-screening, assessment and testing, interviewing, and pre-hire training.

Clearly, the equation is adding up because Tennessee continues to add to its logistics sector in a big way. With thousands of new jobs in the past couple of years and nearly $2.6 billion in capital investment in the past five and a half years, something is definitely working. Already, Tennessee ranks first in the Southeast in the concentration of transportation/material-moving activity, as measured by the occupation group’s location quotient in each state. And transportation/distribution/logistics growth is forecast to continue, with the employment increase expected to hit 11 percent over the next decade.
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