There are a number of criterion that need to be taken into consideration when a company contemplates an expansion or relocation project. Labor force is important, as is state and local taxes and real estate costs.

But as important as any criterion is transportation. How easy will it be to ship raw materials into your production plant and ship the final product out? Is there easy access to interstates and other limited-access highways? What about air, rail and water transportation?

So, as a company ponders one of the most important decisions it can make—constructing a new production facility—the logistics environment, both statewide and locally, is critical.

“It doesn’t do a company any good to get free land, if its transportation costs are through the roof,” says Chris Gutierrez, president of KC SmartPort, which handles logistics opportunities in the 18-county, bi-state (Missouri and Kansas) Kansas City metro area. “Transportation drives a site location decision.”

Here is a look at the logistics infrastructure of three states and one metro area.

Mississippi

Mississippi’s location provides easy access to most U.S. metropolitan areas, translating into easy access to many major business markets. Companies can move product more quickly and inexpensively from Mississippi, reducing their bottom-line costs, says Melissa Medley, CME, director of the Communications and Marketing Division for the Mississippi Development Authority, the state’s lead economic and community development agency.

The state’s transportation systems—railways, roadways, airports and waterways—are fully integrated to maximize transport options, Medley says. In addition to access to key ports along the Gulf Coast and navigable rivers, the state’s highway system is ranked as the best in the Southeast U.S. and No. 4 nationwide. There is also a well-regarded railway system, and an air transportation system that offers flexibility and efficiency with 76 airports.

Northern Mississippi is an increasingly attractive location for companies operating in the distribution/warehousing sector. The region has become an extension of the Memphis, Tenn., metro area, which is the home to major Federal Express and UPS operations.

The Pine Belt region, which is located in Southeast Mississippi and includes the cities of Vicksburg, Jackson and Meridian along the I-20 corridor, has competitive wages, low operating costs, and a skilled and abundant workforce.

The state has made many improvements throughout its logistics/supply chain infrastructure in recent years. U.S. Highway 78, from the Alabama state line to Memphis, has been built to interstate standards and will soon be redesignated I-22. Mississippi will also be part of the “NAFTA Superhighway,” which will connect Canada and Mexico via I-69. Construction of I-69 in Northwest Mississippi has been completed.

The Mississippi State Port Authority’s (MPSA) long-range plan for Gulfport, the second largest city in the state (next to the capital city of Jackson) will allow it to mitigate and restore the Port of Gulfport for today’s marketplace, Medley says.

“By rebuilding the Port from the damage it sustained from Hurricane Katrina and by mitigating to protect the community in the event of future storms, plans will capitalize on its existing intermodal capabilities as a deepwater port with on-site rail and truck terminals,” she points out.

Extensive modifications both on land and in the waters of the Gulf of Mexico will further improve the MSPA’s position as a major maritime transportation terminal and allow it to become a major world seaport. Medley says Mississippi is benefiting from a new reality in today’s market—international trade routes are shifting, especially in light of the expansion of the Panama Canal, the population continues to increase in the Sunbelt, and many other domestic ports are at or near capacity.

Recent construction projects at Jackson-Evers International Airport and Gulfport-Biloxi International Airport have expanded facilities to handle air cargo and distribution. The Air Cargo Logistics Center (ACLC) at Jackson-Evers offers a comprehensive distribution point for air cargo, truck and rail shipments generated by manufacturers in major markets throughout the Western Hemisphere. ACLC consists of more than 100,000-square-feet of existing air cargo building space and 450,000-square-feet of cargo aircraft parking space, and a multiphase development program will add additional square footage in the near future. Business center space near the airports has also increased.

Nebraska

Nebraska offers companies numerous advantages when considering their logistics/supply chain operations. The state’s central location along key east-west and north-south transportation routes gives companies impressive speed to all major markets, regardless of direction, says Dennis Hall, CEcD, economic development manager for the Nebraska Public Power District (NPPD), the state’s largest electric utility, which also has an economic development branch.

Interstate 80, which travels from the Atlantic to the Pacific, enters Nebraska from Iowa. More than 480 miles later, it crosses the state line into Wyoming. It anchors a road system that encompasses 8,539 miles (interstate, freeway and arterial roads). Interstate 29 passes along the state’s eastern border in Iowa and I-25 is in proximity to the state’s western border.

Seven U.S. highways crisscross the state in a north-south direction, making Nebraska well-suited for companies looking for access in the NAFTA trade corridor, Hall says.

There are more than 8,000 licensed motor carriers with worldwide connections based in Nebraska, serving companies throughout North America.

Nebraska also boasts one of the best rail systems anywhere in the country. Two Class I systems, the Union Pacific Railroad, which is headquartered in Omaha, and Burlington Northern Santa Fe (BNSF), combine for more than 3,400 miles of track in the state. There are short-line railroads, as well.

Union Pacific’s main line in central Nebraska is the busiest rail freight corridor in the United States. More than 135 trains travel daily between North Platte and Gibbon. The route boasts one of the longest triple-tracked sections in the country to accommodate the heavy traffic.

BNSF expects to spend about $2 billion this year to keep its rail infrastructure strong by upgrading tracks, signal systems, structures, freight cars and technologies. Some of these improvements will occur in Nebraska.

BNSF tracks connect Nebraska to San Francisco and Chicago, and companies can also transport their product to Los Angeles.

No major U.S. city is more than five days from Nebraska by rail.

“This gives us a step up in terms of companies that need rail transportation,” Hall says. “We have lots of communities that can provide sites with rail access. Nebraska will be high on the list if rail is important to a company.”

The Missouri River forms the state’s eastern border, and the state is a western terminus for barge traffic. Barges access the Gulf of Mexico via the Mississippi River, and the Atlantic Ocean via the Great Lakes and St. Lawrence Seaway.

Combined with low utility costs, Nebraska is an ideal site location choice for distribution facilities for frozen products. The state’s current industrial rate of 4.78 cents per kilowatt-hour is below the U.S. average (6.39 cents), according to NPPD.

While traffic congestion may be an issue in other parts of the country, especially in metropolitan areas, Nebraska’s transportation routes have minimal congestion. This allows for more efficient and timely loading and unloading of freight, as well as faster delivery, no matter the mode of transportation.

“We have pretty rapid transit through the state, and from distribution sites to interstates and onto markets,” says Ken Lemke, an economist for NPPD. “The speed and ease with which companies can move product via truck through Nebraska is a plus.”

Kansas City Metro Area

The bi-state region of the Kansas City metro has a multimodal supply chain infrastructure in place that allows companies to create a hub to meet their logistics requirements.

CNBC recently ranked Missouri (No. 6) and Kansas (No. 9) in the top 10 states in the transportation category on its list, “America’s Top States for Business in 2009.” The rankings were based on the value of goods shipped by land, air and water.

The metro area has the largest rail center in the United States by tonnage with five Class I systems; more foreign trade zone space than any other U.S. city (more than 10,000 acres); and is located at the intersection of three of the nation’s major interstate highways (I-35, I-70 and I-29) and soon to be a fourth—I-49.

As the third-largest truck hub in the country, the region is home to facilities operated by dozens of the leading trucking companies in the country offering eight types of carriers, from van to drayage.

The rail corridor spans coast to coast and extends from Canada to Mexico, making Kansas City a destination on the NAFTA Railway.

The Kansas City International Airport (KCI) moves more air cargo each year than any air center in a six-state region. A two-day truck distribution range from KCI captures 83 percent of the nation’s GDP and three days covers both East and West Coast markets.

And the metro area is on the Missouri/Mississippi River system, making it one of the leaders in barge traffic.

Federal Express has a major presence in the Kansas City metro area, with two freight facilities and three ground facilities. The company also recently announced that it would lease 126,000 square feet of space in Olathe, Kan., for its SmartPost sorting and distribution operations. SmartPost is a new division of FedEx Ground, shipping packages to U.S. postal facilities for final delivery.

The supply chain advantages of the Kansas City metro were evident when Pure Fishing decided to consolidate five distribution facilities into one. The company has begun operations in a 400,000-square-foot, state-of-the-art distribution center at the Skyport Business Park, near KCI, where it is employing 80 workers. Pure Fishing considered sites in South Carolina, Nevada, Kentucky, Pennsylvania, as well as St. Louis. Kansas City’s transportation infrastructure was a deciding factor, says Chris Gutierrez, president of KC SmartPort, which handles logistics opportunities in the 18-county, bi-state Kansas City metro area.

Speed to market was an important factor for Pure Fishing. The company decided in May 2008 to locate the facility in Kansas City. In the following six months, Pure Fishing found a site, built the facility and took possession.

Similarly, Coleman Co. had a 10-month timeframe to build and take possession of a 1.1-million-square-foot distribution facility in Gardner, Kan. The manufacturer of outdoor recreation gear will take possession of the facility by the end of the year, meeting its goal.

A proactive approach by local officials helps to get companies into their facilities as quickly as possible, Gutierrez says.

“We’re pre-approving industrial development by approving permits and plans,” he notes. “When a deal lands, the company is as close to shovel-ready as possible, and it is ready to go vertical the next day.”

The Kansas City region is constantly looking at the capacity of its infrastructure, looking for ways of improvement, Gutierrez says. The departments of transportation in both Missouri and Kansas are highly ranked in their focus on the infrastructure.

A new bridge is being built over the Missouri River on I-35 heading to Iowa, and U.S. Highway 71, a north-south road, is being upgraded and will be redesignated as I-49 heading south to New Orleans.

The region is also adding three intermodal facilities to its current list of four and highway construction projects are underway to support the new facilities.

New Jersey

The state of New Jersey offers a transportation network that includes 35,000 miles of interconnected roadways that help move goods efficiently to their destinations.

The Port of New York and New Jersey operates the largest port complex along the eastern seaboard and is responsible for more than $100 billion in trade. One survey recently ranked New Jersey No. 1 in the United States for transportation, warehousing and highway connectivity, and No. 2 for railroad service.

A three-airport network in the region that includes Newark Liberty, John F. Kennedy and LaGuardia, handles nearly 25 percent of all U.S. air cargo destined for foreign markets.

New Jersey boasts major metropolitan-based port facilities in Newark and Elizabeth, which is part of the Port of New York and New Jersey system, as well as port facilities on the Delaware River in Camden, Gloucester and Salem counties.

A majority of the region’s seaport, trucking, rail and warehouse distribution facilities is located in New Jersey. More than 620 million tons of freight valued at $850 billion annually moves inbound and outbound through the state.

“When your business depends on getting products to your customers fast and efficiently, location matters,” says Caren S. Franzini, CEO of the New Jersey Economic Development Authority (EDA), a financing and development agency that aims to retain and grow companies in part through financial assistance. “Our expansive transportation network and ports offer a distinct advantage for the import, export and distribution of cargo.”

About 1,400 multinational businesses representing more than 40 countries have facilities in New Jersey, as does two-dozen Fortune 500 companies.

New Jersey is at the heart of one of the most concentrated consumer markets in the world, next door to New York City and Philadelphia, and within a one-day’s truck journey of 100 million consumers.

This location advantage, along with large industrial space capacity, a diverse range of industries and a highly skilled workforce makes the state one of the best-connected business locations in the country.

“Our ports are close to a wide range of businesses and industries, including those involved in food processing and distribution, printing, publishing, medical and pharmaceutical manufacturing, as well as oil, chemical and steel production,” Franzini points out.

Heidi Manheimer, CEO of Shiseido Cosmetics America, a division of Shiseido, a Japan-based global cosmetic company, says New Jersey’s strategic location allows the company to distribute its product across the country and around the world easily by virtue of the transportation network.

The state continues to improve its logistics infrastructure. Ground was broken in September for construction on the Port of Paulsboro, a deepwater port that will be built on 190 acres along the Delaware River. The project will create thousands of jobs and spur economic growth in the South Jersey region. The nearly $250 million investment will involve about 500 jobs during construction and 2,500 direct and indirect jobs when fully operational.

The state has taken a proactive role in helping businesses establish facilities in the Port District of New Jersey. The Portfields Initiative was designed to create new development sites and economic opportunities in the Port District—defined as the area within a 25-mile radius around the Statue of Liberty—to meet the growing commercial cargo needs for ocean and airfreight warehousing on underutilized or brownfield sites.

The state has also recently integrated international trade responsibilities into the EDA’s portfolio of programs and resources. By promoting New Jersey’s exports, helping to attract new foreign direct investment, offering business advocacy services, and building and maintaining relationships with foreign diplomatic, governmental and business communities, the EDA is working to help New Jersey companies grow and expand their markets, Franzini says. wt



Ken Krizner is a freelance writer based in Cleveland, Ohio. He has covered economic development issues since 2002.