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Logistics Investment Takes Many Shapes

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 total of 73 logistics facility investments from January 2021 through November 2023 meant the bi-state Kansas City metro area was No. 14 in the nation for warehouse, distribution and e-commerce projects over that span, according to Site Selection magazine’s Conway Projects Database. That means the region is nipping at the heels of such national logistics stalwarts as Greater Philadelphia; Columbus, Ohio; and California’s Inland Empire.

That total is a 28% jump up from 57 major projects the publication qualified for its database during the previous three-year period, when the region ranked No. 18 in the nation.

Moreover, 41 of those 73 projects (56%) are on the Kansas side of the state line, attracted to ready infrastructure, supportive development policies and a ready regional workforce.

Kansas Governor Laura Kelly greeted some of those workers in October 2022 when she helped cut the ribbon at a new $403 million, 1.5-million-sq.-ft. omni-channel fulfillment center in Kansas City, Kansas, from URBN, best known for iconic brands Urban Outfitters and Anthropologie. The facility is URBN’s largest and most automated facility and is considered the company’s “North Star Showcase for North America.”

“We thought Kansas City was the best position for reaching customers in the shortest amount of time,” said URBN Chief Development Officer Dave Ziel, just months before the company announced another, smaller fulfillment center project on the Missouri side of the metro area in Raymore. “The state, including Governor Kelly and Lieutenant Governor Toland, really put their best foot forward. The relationship got off to a great start because of their pro-business perspective.”

“URBN is a company that strives to put people first and that always stays on the cutting edge of not only style trends, but also logistics and distribution best practices,” Kansas Lieutenant Governor and Secretary of Commerce David Toland said. “They are exactly the type of partner and employer the Kelly Administration envisioned recruiting when we prioritized logistics and distribution in the Kansas Framework for Growth.”

In the past five years, according to the Kansas City Area Development Council, the Kansas City area has successfully attracted e-commerce companies pledging to create more than 10,650 jobs, invest $1.9 billion and occupy 17.8 million sq. ft.

 

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“We are fortunate to have Urban Outfitters in Wyandotte County,” said Greg Kindle, president of the Wyandotte Economic Development Council. “Their interest from the outset to be a part of the community from their focus on providing transit, a commitment to hiring local, to working with local firms and their socially conscious efforts are to be commended.”

The company’s forward thinking is demonstrated in its facilities, too. URBN has stated the KCK facility will feature some of the most advanced infrastructure in the company’s supply chain, including automated material handling equipment that features energy-saving automatic shutdowns for unused components and energy management active recovery systems.

Among other projects in the Greater KC area, Chick-fil-A Supply, a wholly owned subsidiary of Chick-fil-A, Inc., and distribution service provider of the chain’s restaurants, announced plans in March 2023 to establish a $31 million, 60-plus-job market distribution center at Lone Elm Commerce Center in Olathe, developed by Frontier Real Estate Investment, formerly Heise-Meyer. The project comes just three years after Chick-fil-A Supply opened its first full-scale distribution center, which employs approximately 200 people with the capacity to serve up to 300 restaurants. Since then, the company has opened distribution centers in Mebane, North Carolina; Nashville, Tennessee; St. Louis, Missouri; and Cleveland, Ohio. It has four more on the way in the Carolinas and Texas.

The KCK facility is projected to operate at full scale in early 2024. Chick-fil-A in November 2023 opened its 3,000th restaurant nationwide.

“With 12.6 million sq. ft. of new industrial space under construction in the KC market at the end of last year, our KC SmartPort team is focused on elevating our region’s comprehensive strengths to attract manufacturing and distribution businesses from around the world,” said Tim Cowden, president and CEO of the Kansas City Area Development Council, at the Chick-fil-A announcement.

“The Kansas City area is a prime location to invest in our business, create jobs and grow our supply chain operation,” said Josh Grote, executive director, Chick-fil-A Supply. “The region has a deep pool of skilled talent that we know will excel in serving the franchise operators, licensees and team members delivering an authentic Chick-fil-A experience at each of our locations.”

Radiating In All Directions

Not all logistics activity takes place in vast warehouses. Some of it takes place in the quick, agile minds and systems of the brokers and technology providers helping goods get from one place to another. Quick and agile personnel and real estate moves help too.

In August, on the heels of the announced bankruptcy of national truck and freight company Yellow, Washington-based Radiant Logistics announced its wholly owned subsidiary and U.S. brokerage platform Radiant Road and Rail, Inc. was opening a new operating location in Overland Park. It’s led by former Yellow Logistics leaders and it’s located at the same Aspiria campus where YRC Enterprise Services, a Yellow subsidiary, had recently expanded to new digs. The transition occurred in about two weeks, as repurposed leaders and re-repurposed real estate (Aspiria is the name of the former Sprint headquarters property) got busy.

“We called this initiative ‘Project Charger’ because we believe this is going to super-charge the growth in our over-the-road brokerage capabilities,” said Radiant Founder and CEO Bohn Crain. “Now it is time to go to work and prove just that.”

In a November earnings call about the company’s Q3 performance, Crain gave “a bit of shout-out to the progress we’re making in Kansas City with the truck brokerage team we were able to onboard there.” He said the ramp-up is “far exceeding expectations in terms of their growth and trajectory and path to profitability with the team we put in place there.” As other acquisition opportunities come along in a consolidating marketplace, he went on to say, the office stand-up in Overland Park will serve as a model for onboarding a team and supporting customers.

 

 

“We’ve got a strong core team in Overland Park that we have positioned to scale in terms of headcount as the business grows,” says Christopher Brach, senior vice president and general manager of brokerage for Radiant. “As we began to explore standing up the operation we were amazed at the density of brokerages in Kansas City and particularly Overland Park. We feel it is a great, competitive market for us to have a growing brokerage location in.”

Railroad Leadership Helped by Upgrades

Just as not every logistics operation involves a warehouse, not every Kansas logistics-focused investment involves the KC area or roads. In fact, the Kansas Department of Transportation notes, “the 4,216-mile rail system in Kansas plays an essential freight transportation role both within the state and nationally. Kansas’ location and position on principal rail corridors provides rail access to every region of the U.S., as well as to Canada and Mexico.”

The state ranks in the top 10 in the nation in the following categories: total miles of rail (6th), rail tons carried (6th), and rail carloads carried (8th) and farm products originating by state (6th).

In April 2023, Governor Kelly attended a groundbreaking ceremony to celebrate upcoming improvements to the Cimarron Valley Railroad in southwest Kansas from Dodge City to Hugoton. The railway was awarded nearly $15 million from both private and public sources, including the federal Consolidated Rail Infrastructure and Safety Improvements (CRISI) fund and the Kansas Department of Transportation (KDOT), to complete the Southwest Kansas Infrastructure Upgrade Project.  

“These upgrades are not just an investment in our infrastructure, but an investment in our agriculture industry — and our economy as a whole,” said Governor Kelly. “By rehabilitating over 85 miles of an essential rail line in southwest Kansas, this project will make it easier and more efficient for local businesses to transport biodiesel and other agricultural products.”

“The Cimarron Valley Railroad has been committed to transporting Kansas-grown goods across the country and the world in a safe, environmentally friendly and cost-efficient way for over two decades. These funds will help us continue to do that,” said Nathan Champion, president of the Cimarron Valley Railroad. “We are thankful for the partnerships — both public and private — that have helped make these upgrades happen to ensure uninterrupted transportation of essential goods throughout local, national and international markets.” 


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