Editorial: Logistics Remains Memphis' Bread and Butter

Saturday, October 5, 2013, Vol. 6, No. 41

Calling Memphis a “battleground” for cargo may suggest conflict to some looking from the outside into the business of logistics in Memphis.

The battleground comparison that is the billing for this year’s Southeast Freight Conference lends itself more to competition across the rail, river, road and air cargo sectors of our local economy.

Logistics is delivering on the promise of a Memphis economy connected to the global economy that we so often talk about as if it were some distant point in the future. It is an everyday reality for every facet of Memphis business that moves its goods in any way.

In so many ways, the real business of Memphis is about movement and timing. That is why Dunavant Enterprises is a logistics business and not just a cotton company with an international reach.

FedEx Corp. continues to create its own definition in the changing conditions in which high tech product launches move to ocean containers as a front line alternative to air transport.

And just last month, United Parcel Service announced it would double the size of its operation at Memphis International Airport. The UPS announcement, more than any other recent development, underscores a point we often run into the ground in our efforts to sell Memphis – our location. But it is hard to overstate the importance of our location even if our eyes glaze over whenever we hear what amounts to preaching to the choir.

FedEx founder Fred Smith has repeatedly challenged the idea that UPS and FedEx are in the same business. They may compete in some ways, but Smith makes the point FedEx is not simply a package company.

In that argument is the essence of what is happening in Memphis numerous times over – competition and coexistence based on the market and innovation, as well as what the other guy is doing. We are more than the considerable sum of our parts.

But there is work to be done.

The top item remains a fix for Lamar Avenue, the city’s major ground freight corridor. That fix cannot wait the normal several decades it takes state road projects to move from the oh so tentative and a mind-numbing array of public hearings to people working on the road.

We are also alarmed by word last month from Tennessee Transportation commissioner John Schroer that funding for road projects from the federal highway trust fund could end in 2015. Tennessee is a pay as you go state on road projects at a time when most other states use bonds and the ensuing debt they incur for road projects. The end of trust fund money would see the state’s transportation budget go from $900 million to $600 million.

Schroer is right when he talks about the intermodal industry locally going to “hell in a hand basket” without the federal funding to build the right roads to make the right connections.