The Kansas City area’s attraction for warehousing and distribution begins with the three most important attributes in real estate – location, location, location – and extends its fast-growing appeal to encompass such benefits as a dynamic workforce and comparatively low operating costs.
Thus it’s easy to see why Chris Gutierrez, president of Kansas City Area Development Council affiliate KC SmartPort, so proudly proclaims, “Kansas City is leading from the middle.”
The enthusiasm of Gutierrez is supported by leaders of a burgeoning roster of companies, including A4, a maker of team uniforms and athletic sportswear based in the Los Angeles suburb of Vernon, California, which in April opened a 175,000-square-foot warehouse in the CenterPoint Intermodal Center in Kansas City, Missouri.
“We chose Kansas City not just because of the location, but also because of the community and the many talented people,” said Mark Mertens, A4’s owner. “We will be here for a very long time and couldn’t have picked a better spot.”
A4’s Kansas City warehouse, the company’s largest and most technologically advanced, augments facilities in Southern California and Texas and is anticipated to be the firm’s most important hub, according to Mertens, significantly shortening shipping times to Central and Eastern U.S. customers.
Immediate neighbors of A4 in the CenterPoint Intermodal Center include distribution facilities of Walmart, True Value Hardware and third-party logistics provider Neovia, with Kansas City Southern’s intermodal hub adjacent.
Indeed, intermodal rail capabilities – with greater Kansas City ranking No. 1 in the nation in total rail tonnage volume – have been a big draw, with recent additions to the region’s distribution scene also coming to Edgerton, Kansas, where BNSF Railway operates a sprawling intermodal facility about 40 miles southwest of revitalized downtown Kansas City.
In Edgerton alone last year, Madison, Wisconsin-based Spectrum Brands opened a 927,112-square-foot facility for centralized distribution of hardware and home improvement products while Bloomfield Hills, Michigan-headquartered towing and trailering equipment manufacturer Horizon Global unveiled a 512,000-square-foot installation. Set to open this month in Edgerton is a new distribution center for Hopkins Manufacturing Corp., a maker of automotive aftermarket products headquartered in Emporia, Kansas, 75 miles west-southwest of Edgerton along Interstate 35.
Beyond the major KCS and BNSF hubs, discount chain Chesapeake, Virginia-based Dollar Tree is building a 1.3 million-square-foot regional distribution center in Warrensburg, Missouri, 60 miles southeast of downtown Kansas City, while e-commerce companies like Amazon.com, Hy-Vee Aisles and Jet.com have been opening warehouses as well.
Encompassing 18 counties spanning the states of Kansas and Missouri, the Kansas City region has seen speculative construction of more than 7 million square feet of warehousing and distribution space in each of the past four years, with another 7 million to 8 million of such spec space being added this year, according to KC SmartPort’s Gutierrez.
“If you don’t have a building, you don’t get looked at,” Gutierrez said. “Almost all of them are getting leased before they’re done. We’ve really succeeded in distribution from a central location.”
The location near the middle of the continental United States, not only at the center of intermodal rail operations but also at the relatively uncongested nexus of four major Interstate highways, offers appeal for e-comm businesses in particular, according to Gutierrez, who noted that 85 percent of the U.S. population can be reached by truck within two days while 99 percent of the nation’s populace is within a three-day trucking radius.
Affordable operating costs, including industrial electric utility rates well below national average, plus high quality of life and outstanding work ethics are among other reasons greater Kansas City also is drawing interest from manufacturers – such as France-based automotive equipment maker Faurecia – in addition to distributors.
In fact, the Kansas City area is second only to Detroit as a hub for manufacture and assembly of vehicles, boasting big plants of both General Motors and Ford and thereby serving as a magnet for automotive suppliers.
Another specific industry sector that has become prominent in the region is animal health, with scores of firms engaged in manufacture and distribution of a broad spectrum of pet foods and veterinary products, representing what is being promoted as the world’s largest concentration of such assets.
To ensure a continued ample workforce, KC SmartPort is teaming with others, including the Council of Supply Chain Management Professionals, on multiple programs, some reaching middle school and high school students with information on logistics careers.
The region already is favorably recognized on the labor front, as Dan Bentzinger, currently chief information officer of CommunityAmerica Credit Union, noted earlier this year in his then-role as chief information officer of trucking giant YRC Worldwide spinoff MIQ Logistics.
“Kansas City is a center for excellence from a talent perspective,” Bentzinger said. “With all the railroad and trucking industry that is based here, it has created a nice pool of talent. There is a tangible appreciation for this industry here.”
A people-inspired culture is at the heart of the region’s logistics industry growth, according to Chad Earwood, president and chief executive officer of eShipping, a multimodal transportation management solutions provider he founded in 2004 in Parkville, Missouri.
“There is so much knowledge from freight companies, carriers, warehousing and distribution that are located here,” Earwood said, “and the universities feed into the business community. This town is laden with talent in logistics.”
Gary Quint, a KC SmartPort board member and longtime director of sales and marketing for telecommunications service provider Commenco, with operations in Edgerton’s Logistics Park Kansas, pointed to the preponderance of rail hubs plus Kansas City International Airport’s air freight connections, commenting, “There are tremendous growth opportunities for warehousing, distribution centers and third-party logistics here, and a lot of it is due to our intermodal facilities.”