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Tennessee Experiences Much Advancement in Logistics Industry

Tennessee's highly developed logistics sector connects the state with the world

By Kevin Litwin on March 18, 2018

Tennessee / Michael J. Conti

With eight primary interstates, one of the world’s busiest cargo airports, and major rail and water transport, Tennessee is a logistics leader strategically positioned to access major U.S. markets. In fact, 76 percent of the U.S. population is within a day’s drive of Tennessee.

That network of  river ports, rail service and regional and international airports has helped make the Volunteer State a logistics powerhouse, with 16,700 distribution-related establishments that employ nearly 269,000 workers.The crown jewel of logistics is the FedEx World Hub in Memphis, which employs 30,000 workers and processes about 1.5 million packages every night. The hub has helped make Memphis International Airport the busiest air cargo airport in the Western Hemisphere and second-busiest in the world.

Memphis is poised to become even more of a logistics leader, thanks to efforts of the Greater Memphis Chamber’s Regional Logistics Council, which focuses on enhancing the region’s logistics industry.

“The Memphis metro area has incredible transportation infrastructure with multiple interstates, five Class I railroads, the international airport and a thriving inland port on the Mississippi River,” says Neely Mallory, Regional Logistics Council chairman and president/CEO of Mallory Alexander International Logistics. “The region is ideal for transportation and manufacturing companies because of our four R’s – roads, rail, runways and river.”

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Moving Right Along

A number of well-known retailers maintain large distribution operations in the state, including Amazon, Gap, Kroger, Macy’s, Napa, Nike and Saks Fifth Avenue. Gap is investing $41.7 million in its distribution campus in Gallatin for technology upgrades as it expands its online fulfillment capabilities. Trucking giant NFI, one of the world’s largest logistics companies, is investing approximately $7.2 million to establish a distribution facility in Smyrna to handle work for Lowe’s Cos.

The state’s logistics capabilities have also spawned growth in technology-driven companies such as HYLA, which specializes in the collection, processing, renewal and distribution of previously owned mobile devices. The company is investing more than $1 million and creating about 225 new jobs in La Vergne.

Chattanooga is home base for such major logistics companies as Covenant Transport, Kenco and U.S. Xpress, and is a breeding ground for innovative logistics-related startups. Aiding them are resources such as Dynamo, an accelerator program backed by a trio of logistics company veterans who assist transportation and logistics startups.

“Dynamo is a logistics, supply chain and transportation accelerator program that is looking to push forward the logistics industry to make it more efficient and faster through technology and better practices,” says Santosh Sankar, Dynamo director. “We chose Chattanooga because of the city’s long heritage with manufacturing, logistics, trucking and warehousing. Even today, more freight passes through Chattanooga daily than any other metro area in the nation.”

Sankar says the logistics industry is growing at a fast rate, but still relies on decades-old technology to drive it.

“We are looking to change the face of logistics and supply chain management,” he says. “Logistics is no longer about slow freight and old ways of thinking.”

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Managing Supply Chains

The logistics industry in the state is aided by the presence of higher education institutions with standout programs. The University of Tennessee Global Supply Chain Institute is regarded as one of the top supply chain academic programs in the nation. UT graduates about 300 students each year with supply chain management degrees, more than any other university.

“There is huge competition for our graduates, and in 2017 we hosted a career fair that drew 120 major companies looking to recruit our supply chain students,” says Paul Dittmann, UT Global Supply Chain Institute executive director. “Logistics, distribution and supply chain management – it’s a red-hot industry nowadays.”

Dittmann says supply chain graduates can work for companies in high-paying areas such as transportation operations, warehousing supervision, manufacturing quality control, procurement, inventory management and forecasting.

“Being involved with supply chain management is overseeing a process from the very beginning to the end,” he says. “For example, at Walmart or Amazon or IBM, their supply chain involves the management and flow of products starting from their suppliers’ suppliers until the finished products get into the customer’s car trunk. It involves a vast and wide span of activities that every company has to deal with in a high-tech way.”

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