Experts say Memphis has the best connections for moving the nation's freight

November 8th, 2012

November 8th, 2012

By Wayne Risher
As published in The Commercial Appeal:

Dunavant Enterprises is betting heavily on Memphis and its transportation and logistics strengths, president and CEO William B. Dunavant III said Thursday.

The city is going head to head with competitors including Chicago and Dallas because of regional cooperation and billions of investment in infrastructure, Dunavant said during a keynote speech at the third Southeast Freight Conference at the Hilton Memphis.

He cited Electrolux and Mitsubishi Electric factories, currently under construction, and a planned expansion by Nike as examples of "why you have to be here" if a business needs flexibility in moving products by water, rail, road or air.

"Memphis absolutely competes on all loads with Dallas and Chicago but the big difference is, in my opinion, less congestion and less cost," Dunavant said. Because of Valero's oil refinery here, "It's pretty simple that fuel is cheaper than most locations. We don't have to transport it. It's made and refined here in our city."

Dunavant Enterprises is a former cotton industry giant that has shifted to transportation and logistics, buying trucking companies serving Southeastern and Gulf Coast ports and loading up on distribution space in the Memphis area.

"If you come to Memphis to play, we all want you to stay," Dunavant said. "To make it successful, we all work together in this city, public and private business, federal, city, state governments, smart growth with overriding efficiency."

The two-day Southeast Freight Conference, presented by the Memphis World Trade Club and Cargo Business News, ended Thursday. It was capped by Port Night at The Peabody, the club's annual celebration of business ties between Memphis and New Orleans.

Memphis has the world's second busiest air cargo airport, fourth largest inland port, five major railroads, more than 400 trucking companies and seven interstate or U.S. highways.

"It's got this unique logistics position that's capable of reaching out not only to Asia, but Africa and North and South America as well," said Fred Malesa, vice president of international intermodal for Burlington Northern Santa Fe Railroad.

Malesa said BNSF and ocean shipping line OOCL have been working to build capacity in the Memphis area for 30 years. "We're committed to a long-standing and profitable future with Memphis," he added.

The major railroads are handling about 2 million shipping containers a year at Memphis area facilities including BNSF's intermodal gateway at Lamar and Shelby Drive.

It's a major destination for containers bringing imports through the Port of Long Beach, said Sean Strawbridge, managing director of trade development and port operations at the California port. The Asian-made goods are bound for companies including Wal-Mart, Williams Sonoma and Nike.

The flow of goods should become less of a one-way street over time, as a more prosperous Asia increases its appetite for American agricultural products and made-in-America manufactured goods, speakers said. Meanwhile, Memphis is well-positioned to serve export markets.

America and China both measure economic progress in quarters, but American quarters are three months long while China's last 25 years, Dunavant said. Logistics and transportation providers have to be patient and grow their businesses over time.

For example, Panama Canal expansion in 2016 will improve shipping between Asia and the Gulf Coast, but "it will take time for that pricing to work itself out. It's an opportunity for the Southeast and the Gulf Coast."

"We believe trade is going to grow, and it's going to grow because the population is going to grow," Dunavant added.

View the whole article at The Commercial Appeal