All roads may not lead to Little Rock, but enough paths cross nearby to make central Arkansas a surging center for the evolving logistics industry.
A nexus of interstates, rail lines, a vigorous river port and a stable of native trucking companies have made Arkansas — and Pulaski County in particular — a hub of warehousing and distribution. In the last two years alone, eight major distribution and logistics projects have been announced in Little Rock, North Little Rock, Maumelle and Alexander, bringing an influx of 5,500 permanent jobs and generating hundreds of millions of dollars’ worth of construction and economic impact, according to the Little Rock Regional Chamber.
Affordable sites, a welcoming regulatory environment and a central location in the Midsouth are all lures for companies looking for an ideal place to store and ship goods, economic developers say. So are some of the lowest electricity prices in the nation.
“Logistics is all about location, and Arkansas’ position in the center of the country has always given us an advantage,” Arkansas Commerce Secretary Mike Preston told Arkansas Business. “Transportation costs and proximity to markets are at the top of the list for companies who need to ship materials in and product back out for sale.”
The pandemic and a recent trend of “reshoring” by companies bringing back manufacturing operations from overseas are stoking the logistics boom, said Robert Birch, North Little Rock’s director of development, and Bryan Day, CEO of the Port of Little Rock.
“Companies have redesigned their strategies for getting goods to their customers,” said Birch, who had a background in sales before joining the city. Beyond consolidating manufacturing and distribution back in the United States, corporations have also lost a lot of faith in just-in-time inventory practices, which increase efficiency by allowing companies to receive goods as close as possible to when they’re needed. The pandemic’s supply chain disruptions proved persuasive.
“We’re certainly seeing a surge in distribution, logistics and manufacturing, and we’ve seen unprecedented levels of inquiry about available space,” said Day, whose growing port is one center of the activity. The biggest central Arkansas project, employing more than 2,000 people, is at the port, a five-story, 3.7 million-SF Amazon fulfillment center on 80 acres on Zeuber Road. The online delivery giant, based in Seattle, has made no cost estimate public for the project, which was built with blazing speed on land bought for $3.2 million.
“America is a consuming nation, and starting in the 1970s a majority of our goods came from overseas,” Day said. Manufacturers saved on labor, getting their foreign-made products onto American store shelves just in time to meet demand. “Then the great pandemic hit in March 2020, the supply chain came to a screeching halt, and all of a sudden, the American consumer couldn’t find toilet paper, couldn’t find pharmaceuticals, couldn’t find chips to make automobiles. So American industry said we can solve that with distribution and logistics.”
The port made news last month with a project by Bluestem Partners of Kansas City, Kansas, to add nearly 1 million SF of warehouse space next door to Amazon. In fact, photos from the Bluestem groundbreaking July 14 show Amazon’s center in the background.
Overnight success actually blossomed over a decade, Little Rock Regional Chamber President and CEO Jay Chesshir said. “Logistics was a target of ours for quite some time, but we didn’t want just one big Amazon facility here. We knew this was a wonderful place for many companies to plan their logistics routes,” Chesshir said. “We felt that it was a matter of time, and as soon as Amazon announced that first facility, we began to get inundated with prospects. It seems an overnight success, but the marketing, the research, had been done over several years.”
Amazon is behind four of eight endeavors on the chamber’s list of top logistics projects since the start of 2020. Along with the behemoth at the port, it has a $101 million, 1.2 million-SF fulfillment center on 110 leased acres in the Galloway district of North Little Rock and two smaller centers for “last-mile” deliveries — one on Interstate 30 in Alexander and a facility in the Maumelle Industrial Park. After all, more than 150 million Amazon Prime members in the U.S. — 60% of adults — pay an annual fee for perks including next-day delivery.
By chamber estimates, the Galloway Amazon center will generate 1,000 jobs, focusing on bulky-item delivery. The Alexander center was expected to bring 500 jobs, the Maumelle site 50 or more.
Maumelle’s industrial park is also the setting of major recent distribution projects by Tractor Supply Co., which added 450 jobs there, and Cypress Cold Storage, which was expected to generate 30.
A Million SF, on Spec
Bluestem’s speculative warehouse is on 65 acres the company bought for $3.54 million. Day, the port CEO, said it would create 200 jobs. Dubbed the South Port Commerce Center, its contractor is Bailey Construction & Consulting LLC of Little Rock, and plans call for marketing it to manufacturers and distributors.
“It makes sense to locate here because Americans still ship by truck, mostly,” said Birch, who noted North Little Rock’s origins as a railroad town; it remains a regional hub for Union Pacific. “We’ve got the intersection of Interstates 40 and 30, as well as U.S. 67, and we’re a day-and-a-half drive from nearly anywhere in the country. Dollar General and Amazon and others have built their warehouses here for that reason. We’re also a smaller town, not a Memphis or Atlanta. It’s easy to get around; we have a strong workforce and an affordable cost of business.”
Birch said North Little Rock Mayor Terry Hartwick, former Mayor Joe Smith, council members and Bentley Story of the Arkansas Economic Development Commission essentially formed a quick-response team to get new logistics and factory operations built promptly.
That 24/7 commitment to address any snags, even more so than state and local incentives, persuaded Dollar General and Lowe’s to put up distribution sites along U.S. 70 near the Amazon project on the city’s eastern outskirts, Birch said.
Dollar General’s distribution center, a $140 million project, will include cold as well as dry storage, giving its stores a new capability to sell fresh produce, he said.
The 1.2 million-SF Lowe’s distribution center, announced only in June, is being developed by CRG of Clayton, Missouri, and built by Clayco, CRG’s parent company. Another affiliate bought the 115-acre site from Tulip Farms Inc., led by Jimmy Winemiller.
The city of North Little Rock recently paid Entergy Arkansas $350,000 so that municipal utility North Little Rock Electric could take over the Dollar General and Lowe’s properties as electricity customers. The city, which allowed the Amazon site to remain with Entergy, annexed the Tulip Farm property in 2020. Mayor Hartwick said the move was necessary to keep costs down for city electric customers.
The Galloway projects turned “what was before just 450 acres of scattered farmland into a hub that’s going to surpass 3,000 to 4,000 jobs in that area,” Birch said. “We are in the final stages of a project that we can’t announce yet that is going to end up housing an estimated 1,000 jobs.”
Preston, who leads state economic development efforts as commerce secretary and head of the AEDC, said the state needs to press on to take full advantage of its logistics advantages.
“As we continue to build and replace critical infrastructure on a state level, it figures into our future success. Our future will be determined by how well we keep our critical infrastructure current and safe.”