THE TRANSPORTATION & SECTOR

Published October 2014

Prepared by:

2 THE TENNESSEE TRANSPORTATION & LOGISTICS SECTOR

OVERVIEW

With major interstate highways, service from six of the largest U.S. railroads, one of the world’s largest air cargo hubs and its western border hugging the Mississippi River, Tennessee has the means to move goods quickly and efficiently to anywhere on the globe. The state’s sophisticated and integrated transportation system ranks as one of the best in the nation. Area Development rated Tennessee No. 1 for Overall Infrastructure and Global Access, and No. 1 for Distribution/ Supply Chain Hubs on its 2014 Top States for Doing Business. Business Facilities rated the state No. 2 for Best • A central location on the nation’s INDUSTRY GROWTH Infrastructure on its 2014 Rankings inland waterway system. Tennessee has Tennessee’s significant Report, and CNBC ranked it No. 4 for 165 miles of Mississippi River-front transportation assets and strategic Best Infrastructure on its America’s property and has 1,046 miles of geographic position to major U.S. Top States for Business in 2014. navigable waterways in total. Tennessee markets have built an active and The state’s logistics and waterways moved 34.4 million tons of growing logistics industry in the state, transportation advantages include: cargo in 2012 (mostly coal, aggregates The transportation, distribution and • Six commercial service airports and grains), with a combined value of logistics cluster employs 254,509 and 74 general aviation facilities. almost $8.1 billion. people across 16,417 establishments, Memphis International Airport and employment is projected to grow handled more than 4.6 million FEDEX WORLD HUB by 12 percent over the next 10 years. passengers and Nashville International The state ranks No. 1 in the An anchor of Tennessee’s logistics Airport a record 10.6 million southeast and sixth in the nation for system is the FedEx World Hub based passengers in the 2014 fiscal year. The truck transportation employment, and at Memphis International Airport, the Nashville airport was named the No. 10 in the nation for employment in second-busiest cargo airport in the fourth-fastest growing airport in the the warehousing and storage industry. world behind only Hong Kong. U.S. by Business Facilities in 2014. The logistics network and prime The hub’s presence has made location have helped attract numerous • More than 1,100 miles of interstate Memphis International the only distribution operations to the state highways. The 95,523-mile highway airport in North America considered from companies including network in Tennessee includes access to be an “aerotropolis,” an airport- Amazon.com, Nike and Macy’s. to eight primary and seven auxiliary integrated region extending outward In addition to FedEx, Tennessee is interstate routes. from the airport in strings and clusters also home to Chattanooga-based • Rail service from six of the nation’s of airport-linked businesses and their U.S. Xpress, the nation’s second-largest seven Class I carriers operating on associate residential complexes. privately owned truckload carrier, with 2,177 miles of track, and 18 shortline FedEx’s World Hub, which covers 6,000 trucks and 19,000 trailers. Other railroads operating on 842 miles of 862 acres, is the largest sorting major transportation and logistics track. Memphis is the third-largest rail facility in the world, handling companies headquartered in the state center in the U.S., behind Chicago and between 1.3 million and 1.5 million include in Cookeville, St. Louis, and one of only four U.S. packages every night over 42 miles of Ozburn-Hessey Logistics in Brentwood cities served by five or more long-haul conveyor belts. The facility, where and in Class I rail systems. In recent years, five 3,500 people work by day and 7,000 Chattanooga. Knoxville is the Class I carriers in Memphis have made work by night, includes 196 aircraft headquarters for Pilot Travel Centers, more than $500 million in investments gates, where 140 FedEx aircraft arrive the largest chain of travel centers in new or expanded rail systems. each evening. and travel plazas in the nation. 1 THE TENNESSEE TRANSPORTATION & LOGISTICS SECTOR

HIGHWAY FACTS 8 19,985 6 Access to eight Number of bridges. Interstate legs that primary interstates ON THE ROAD Tennessee has the cross in Nashville, one of only four U.S. cities most bridges in the where six interstate southeast and 10th 7 legs (I-65 North and Access to seven most in the nation. South, I-40 East and 1 auxiliary interstates Tennessee’s rank in the southeast for West, and I-24 East truck transportation employment and West) converge (No. 6 among all states) 6 within a city’s 1,104 Tennessee’s rank in boundaries Interstate miles the U.S. for cargo Sources: Tennessee 1 carried by trucks Department of Transportation; Tennessee’s rank in the southeast for Bureau of Transportation employment in the couriers and 95,523 Statistics, RITA and Federal messengers sector (No. 3 among Highway miles Highway Administration all states) 10 I-40 FACTS Tennessee’s rank among all states for employment in the warehousing and There are 455 miles of I-40 within Tennessee’s borders, more than any storage industry other state. I-40 travels through 20 Tennessee counties, and is consistently Source: U.S. Bureau of Labor Statistics recognized as the best maintained interstate section in the nation. I-40 has a total of 2,554.22 miles across the U.S. in eight states. Source: TDOT

TENNESSEE’S TRANSPORTATION, DISTRIBUTION & LOGISTICS CLUSTER

Industry NAICS Code Employment (2014) Projected Growth (2014-2024)

Wholesale Trade 42 124,840 10%

Scheduled Freight Air Transportation 481112 50 216%

Coastal and Great Lakes Transportation 483113 49 22%

Inland Water Freight Transportation 483211 2,150 19%

Truck Transportation 484 57,332 12%

Support Activities for Transportation 488 11,194 19%

Couriers and Messengers 492 35,033 1%

Warehousing and Storage 493 22,280 31%

Process, Physical Distribution, and Logistics Consulting Services 541614 1,581 52%

Total 254,509 12%

Source: EMSI

2 THE TENNESSEE TRANSPORTATION & LOGISTICS SECTOR

TRANSPORTATION AND MATERIAL MOVING OCCUPATIONS IN THE SOUTHEAST Tennessee ranks No. 1 in the southeast for employment per 1,000 jobs (No. 2 nationally) 8 11 Total employment/Employment per 1,000 jobs 3 9 1. Tennessee: 253,860/94.02 7. Alabama: 139,780/75.80 1 2. Arkansas: 105,120/91.20 8. West Virginia: 53,720/75.72 2 10

4 7 5 3. Kentucky: 160,990/90.30 9. North Carolina: 281,270/71.26

6 4. Mississippi: 87,520/80.77 10. South Carolina: 125,070/68.49 5. Georgia: 311,460/80.28 11. Virginia: 216,320/59.57 12 6. Louisiana: 149,500/79.30 12. Florida: 444,900/56.69

Source: U.S. Bureau of Labor Statistics

RAIL FACTS 6 Number of Class I railroads (out of seven in the U.S.) that operate in Tennessee (BNSF, Canadian National/Illinois Central Railroad, CSX Transportation, Kansas City Southern, Norfolk Southern and Union Pacific)

2,177 INFRASTRUCTURE AND LOGISTICS LEADER Total number of Class I rail miles in Tennessee TOP STATES FOR DOING AMERICA’S TOP BUSINESS (2014) STATES FOR BUSINESS (2014) AREA DEVELOPMENT CNBC 18 No. 1: Overall Infrastructure No. 4: Best Infrastructure Shortline railroads in Tennessee & Global Access combining to measure 842 miles STATE RANKINGS No. 1: Distribution/Supply REPORT (2014) 3 Chain Hubs BUSINESS FACILITIES Rank of Memphis as a rail center, trailing No. 1: Logistics Leaders – No. 1: Certified Sites/Shovel only Chicago and St. Louis. Memphis is Air Cargo Hubs (Memphis) Ready Programs one of only four U.S. cities served by five or more of the nation’s seven long-haul No. 2: Best Infrastructure Class I rail systems (Norfolk Southern, No. 2: Competitive Utility Rates BNSF, Union Pacific/Southern Pacific, No. 4: Best Business Climate CSX and Canadian National) No. 5: Rail & Highway Accessibility for Economic Source: Tennessee Department of Transportation State of the Year www.tdot.state.tn.us Development (January 2014)

3 THE TENNESSEE TRANSPORTATION & LOGISTICS SECTOR

SMART MOVES

Tennessee is a logistics leader in the classroom. Since 2010, there have been 1,126 completions in the program of Logistics, Materials and Supply Chain Management at higher education institutions statewide, ranging from post- secondary certificates to bachelor’s degrees. The University of Tennessee-Knoxville’s Supply Chain/Logistics Program has been recognized as: • The No. 1 college in the southeast and No. 6 in the nation for supply chain/logistics by U.S. News and World Report (2014) • The No. 1 graduate school in the southeast and No. 11 in the nation for supply chain management by U.S. News and World Report (2015) • No. 8 globally by the 2014 SCM World Top 25 Survey

Sources: U.S. News and World Report; SCM World; EMSI

TOP INDUSTRIES BY LOCATION QUOTIENT*

Industry NAICS Code Employment(2014) Location Quotient*(2014)

Inland Water Freight Transportation 483211 2,150 4.87

Footwear Merchant Wholesalers 424340 1,971 4.31

Specialized Freight (except Used Goods) Trucking, Long-Distance 484230 9,870 3.81

General Freight Trucking, Long-Distance, Truckload 484121 29,328 2.98

Tire and Tube Merchant Wholesalers 423130 1,336 2.65

General Freight Trucking, Long-Distance, Less Than Truckload 484122 11,437 2.54

Other Warehousing and Storage 493190 2,025 2.21

Other Farm Product Raw Material Merchant Wholesalers 424590 339 2.14

Packing and Crating 488991 766 2.13

Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers 423450 7,476 1.92

* Location quotient (LQ): Ratio of proportion of an area’s employment in an industry to that of the nation as a whole. LQ is a way of quantifying how concentrated a particular industry, cluster or occupation is in a region as compared to the nation. LQ=1: national average; LQ > 1: industry composes a greater share of the local area employment than the national average (indicating strong concentration or specialization); LQ < 1: industry composes a smaller share of the local area employment than the national average Source: EMSI

4 THE TENNESSEE TRANSPORTATION & LOGISTICS SECTOR

INLAND PORTS TENNESSEE-TOMBIGBEE WATERWAY (THE TENN-TOM WATERWAY) PORT OF MEMPHIS • Located on the Mississippi River in Tennessee is part of the four-state region of the Tennessee-Tombigbee Memphis, “America’s Distribution Waterway, which provides the state access to the Gulf of Mexico harbors Center” and international markets. The 234-mile Tenn-Tom Waterway corridor • Shipped and received 13.5 million has availability of over 40,000 acres of prime waterfront property with tons in 2012 affordable development costs. An estimated 40 sites, located throughout a • Port is 400 river miles from St. Louis 54-county, four-state region, are ready for business. The waterway links and 600 river miles from to 4,500 miles of navigable waterways serving 23 states throughout the New Orleans south and midwest. The waterway handles about 1.2 billion ton-miles of • Second-busiest port on the commerce each year. About 2 million tons of commerce are exported Mississippi and the fourth-busiest annually on the Tenn-Tom. inland port in the U.S. Source: Tennessee-Tombigbee Waterway PORT OF CHATTANOOGA • Located on the Tennessee River • Shipped and received 2.5 million tons in 2012 • 13th largest of all inland ports

PORT OF NASHVILLE WATERWAY FACTS • Located on the Cumberland River • Shipped and received 2.2 million tons of commodities in 2012 • 14th largest of all inland ports 1,046 Miles of navigable waterways in the state PORT OF CATES LANDING • Located on the Mississippi River north of Tiptonville, Tenn. 950 • Accessible to barge traffic year round Miles of inland waterways, 11th most among states with 9,000 linear feet of slack water (expandable to 14,000 linear feet) • Port is a Foreign Trade Zone, 46,435 allowing for ease of access to major Jobs in Tennessee supported by waterways and ports markets nationally and internationally. The port is able to receive merchandise without custom $8.2 billion duties and other related taxes Economic impact to the state economy from waterways and ports *All ports are ice free year-round 165 Miles of Mississippi River-front property in Tennessee. Of the nation’s Sources: U.S. Chamber of Commerce; State Waterway inland and navigable waterways, an estimated 75 percent are within the Traffic Profiles from the Waterways Council Inc.; Mississippi River system, making it the busiest water transportation International Port of Memphis; U.S. Army Corps of artery in the country. Engineers 34.4 million Tons of cargo moved on Tennessee’s waterways (mostly coal, aggregates and grains) 25.7 million Tons of cargo received by barge at Tennessee docks from 16 other states

Sources: Tennessee Department of Transportation; Bureau of Transportation Statistics, RITA; U.S. Chamber of Commerce 5 THE TENNESSEE TRANSPORTATION & LOGISTICS SECTOR

FEDEX MEMPHIS WORLD HUB

From humble beginnings in April 1973 using 14 aircraft to deliver 186 packages to 25 U.S. cities, Memphis-based FedEx has grown into a global logistics giant. Covering 862.8 acres alongside the Memphis International Airport, the FedEx World Hub has capacity to sort 165,000 packages and 265,000 documents per hour that move across a 42-mile network of conveyor belts. The mammoth operation includes 108 gates for wide body planes, 44 gates for narrow-body planes and 44 gates for small “feeder” planes. As the evening sort begins, planes land at the rate of one every 90 seconds.

Source: FedEx

TOP TENNESSEE EMPLOYERS IN TRANSPORTATION, DISTRIBUTION AND LOGISTICS

Company Name Tennessee Locations FLYING HIGH Federal Express Corp. Statewide 6 Inc. Statewide Commercial service airports in U.S. Xpress Enterprises Chattanooga Tennessee (Memphis, Nashville, Knoxville, Chattanooga, Tri-Cities Amazon.com Statewide and Jackson) Western Express Inc. Nashville 74 Macy’s Corporate Services Inc. Portland Public/general aviation airports in the state Averitt Express Inc. Statewide

Covenant Transport Inc. Chattanooga

142 Nike TN Inc. Memphis Heliports in Tennessee Old Dominion Freight Line Inc. Statewide

2 Pilot Travel Centers Statewide Rank of Memphis among world airports for cargo volume in 2013 Ingram Marine Management Co. Nashville (4.414 million metric tons), second only to Hong Kong International Ozburn-Hessey Logistics LLC Statewide Airport. No other airport moved more than 2.9 million metric tons. YRC Worldwide Statewide

Technicolor Distribution Co. Memphis Sources: Bureau of Transportation Statistics, RITA; Airports Council International New Breed Logistics Inc. Memphis, Portland

Versant Supply Chain Inc. Memphis

6 THE TENNESSEE TRANSPORTATION & LOGISTICS SECTOR

TENNESSEE’S INTEGRATED TRANSPORTATION NETWORK

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1. Memphis International Airport 2. Jackson McKellar-Sipes 1 Regional Airport 4 3. Nashville International Airport 4. Chattanooga Metropolitan Airport 5. Knoxville McGhee Tyson Airport 6. Tri-Cities Regional Airport

MAJOR TRANSPORTATION, DISTRIBUTION AND LOGISTICS HEADQUARTERS

Company Name HQ Location Corporate-wide Employment Estimate

Federal Express Corp. Memphis 162,000

Pilot Travel Centers Knoxville 20,000

U.S. Xpress Enterprises Chattanooga 10,885

Averitt Express Inc. Cookeville 8,208

Ozburn-Hessey Logistics LLC Brentwood 7,000

Covenant Transport Inc. Chattanooga 4,202

Kenco Logistics Services Inc. Chattanooga 4,000

The H.T. Hackney Co. Knoxville 3,600

Western Express Inc. Nashville 3,500

Ingram Marine Management Co. Nashville 2,500

Versant Supply Chain Inc. Memphis 1,000

Landair Greeneville 950

Ozark Motor Lines Memphis 875

Big G Express Shelbyville 500

Titan Transfer Shelbyville 350

7 THE TENNESSEE TRANSPORTATION & LOGISTICS SECTOR

ON THE MOVE

Transportation, Distribution & Logistics projects from Q1 2011 to Q2 2014 87 projects 11,389 new jobs $1,660,766,450 in capital investment

TOP PROJECTS, NEW JOBS AND INVESTMENT (Q1 2011 TO Q2 2014)

Located Date Company New Jobs Capital Investment City

October 2011 Amazon.com 1,800 $139 million Murfreesboro

June 2014 Amazon.com 1,422 $4.8 million Lebanon, Charleston, Chattanooga, Murfreesboro

January 2013 New Breed Logistics Inc. 468 $23 million Memphis

December 2012 450 $3.22 million Chattanooga

April 2012 Team 3 Logistics 425 $993,000 Chattanooga

January 2011 Apria Healthcare 412 $5.9 million Jackson

March 2014 Mohawk Industries Inc. 320 $180 million Dickson

February 2012 Saks Inc. 313 $13 million La Vergne

March 2011 PharMEDium Services LLC 250 $3.4 million Memphis

October 2012 Nike Inc. 250 $276 million Memphis

April 2014 Ozburn-Hessey Logistics 241 $5.38 million Mt. Juliet

8 THE TENNESSEE TRANSPORTATION & LOGISTICS SECTOR

DISTANCE TO MAJOR MARKETS DISTANCE IN DRIVING MILES FROM TENNESSEE CITIES TO SELECTED MAJOR MARKETS

Memphis Nashville Chattanooga Knoxville Jackson Johnson City

Atlanta 383 248 118 213 376 256

Birmingham 237 193 147 256 220 361

Charlotte 619 408 340 230 538 149

Chicago 534 471 603 541 518 603

Cincinnati 485 275 359 251 402 313

Cleveland 732 522 609 501 651 484

Dallas 451 662 796 841 538 946

Detroit 747 537 621 513 664 537

Indianapolis 464 287 419 358 414 419

Kansas City 452 556 687 733 501 838

Little Rock 137 349 480 528 223 632

Miami 1,006 911 779 874 1,040 845

New Orleans 395 534 491 599 477 705

New York City 1,096 886 818 707 1,015 631

Philadelphia 1,011 800 732 621 929 546

St. Louis 284 309 440 485 268 590

Toronto 976 766 850 742 893 731

Washington, D.C. 878 666 598 487 796 411

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