Kansas City From the Ground Up

When Logistics Today updated the Top 50 Logistics Friendly Cities list late in 2007, it was interesting to see that the Kansas City metro area appeared at the top of the list. Aside from geography, what makes the region such a good fit for logistics?

One of the area’s strengths is its infrastructure. The good news for companies like McAninch Corp. (www.mcaninchcorp.com) has been the commitment to expansion as well as maintenance. The contractor has been involved in a number of highway projects, an airport expansion, and preparation of commercial building sites–and the work has been plentiful in recent years.

The area does not have any rail or highway congestion issues says Chris Gutierrez, president of KC SmartPort (www.kcsmartport.com) because of how well local authorities have built the infrastructure. Driving some of this are the developing sites for three intermodal facilities in the Kansas City area, says Gutierrez. Though not on line yet, the announced intermodal capacity has drawn national attention to the region and fueled some of the expansion. The capacity of the area as a transportation hub is definitely a driver for Metro Park Warehouses Inc., agrees Steven Wedlan, vp of marketing (www.mpw-inc.com).

Though most freight still moves by truck, and that has been the case for well over a decade, Wedlan sees growing interest in rail for some shippers. It’s hard to argue with one-day truck service to major markets like Chicago, Denver, Dallas, Houston, and Minneapolis, he points out. But for some customers, the rail link is important, and Mid West even offers rail cross dock for some inbound bulk products which then move out of the facility by truck.

A counterpart with an unusual offering is Hunt Midwest (www.huntmidwest.com) which operates the SubTropolis. Interest in the subterranean distribution operation, set in 1,100 acres of former limestone mines, continues to drive expansion, says Hunt Midwest’s Dick Ringer. But though it represents almost 10% of the industrial space in the market, it isn’t the company’s only offering in the region. It’s surface development, Hunt Midwest Business Center scored some victories with American Tire Distributors locating at the site and some other soon-tobe- announced tenants committing to 100,000+ square foot facilities.

Gutierrez admits the area has not had many high-cube facilities in the past, but new projects are featuring build-to-suit, high-cube distribution centers. Looking at the client list for architecture, design, and contracting firm Davidson-Brown (www.davidson-brown.com) shows a trend developing for larger facilities. It’s recent commercial sites range from 27,000 square feet to a 300,000 square-foot distribution facility. The local communities are behind the growth and development of distribution capacity, notes Gutierrez. You’re actually seeing communities giving incentives for speculative development of high-cube distribution centers some 300,000 square feet and bigger with 35-foot ceilings and higher, he points out. And that’s on both sides of the state line, he continues. The State of Kansas has exempted all property tax on equipment, and Missouri added a clause to its property tax program that allows an incentive for the first couple of years of a speculative development.

As the larger facilities are developed and filled, Gutierrez sees an opportunity for Kansas City to handle more international goods and provide more value-add services. SmartPort has signed a contract for a comprehensive freight flow study that will help identify what type of freight is moving through Kansas City, where it originates, and where it goes. This will help in planning for services, but it will also be critical to keeping ahead of infrastructure needs and avoiding falling into the congestion trap where growth outpaces infrastructure.

Kansas City already has more foreign trade zone space than any other US city (10,000 acres), and the development of new intermodal sites and more and larger distribution centers will facilitate growth of international trade. KC SmartPort has gone a step further and developed its Trade Data Exchange along with Cadre Technologies (www.cadretechnologies.com). The system, which will launch in the first quarter of 2008, is designed to provide visibility of both domestic and international supply chain flows. Says Bobby Kraemmer of Cadre, the exchange brings the members together and helps qualify who can provide which services and allow the parties to pull shipment status data from the system (or automate to push proactive notices out on events or non-events). The same functionality applies to both international and domestic moves, he continues.

With all of its careful attention to growth and development as a logistics hub, it is clear Kansas City is positioning for the long term.

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