Nebraska: Lasting Logistics Appeal
A central U.S. location, dedicated workforce, and affordable industrial power combine to create an ideal site for logistics operations.
“Nebraska is blessed to be in the central part of the United States,” says Governor Dave Heineman. “From its highways and railways, shippers can get products anywhere in America within two days. But it’s more than that. Nebraska knows that when a company makes money, that means jobs. So we have created a very business-friendly environment.”
Among the state’s logistics advantages, the governor cites its low taxes and energy costs, strong educational resources, and its residents’ Midwestern work ethic. Add to all that a rich history of public-private sector partnership in the transportation industry, and it’s easy to see Nebraska’s appeal to businesses siting manufacturing and distribution facilities.
“Nebraska’s economic development efforts focus on outcomes and realistic solutions,” says Richard Baier, director of the Nebraska Department of Economic Development. “We continually seek to move the state forward.”
A key partner with government in this effort is the Nebraska Logistics Council, which operates under the umbrella of the Nebraska Trucking Association (NTA). The council’s mission is to give its diverse membership new ideas and opportunities to grow in the logistics field.
“Our members include corporate officers from Fortune 500 companies, leaders of major Nebraska businesses, one-person organizations, account executives, and logistics support staff,” says Larry Johnson, president of the NTA. “They have the opportunity to network and exchange ideas with others who face the same challenges and goals.”
Johnson echoes Baier’s assessment of Nebraska’s spirit of partnership with the logistics sector.
“The Nebraska Trucking Association is a trade and lobby group for the state’s trucking industry,” he says. “We advocate for the highways. But because Nebraska is a very trucking-friendly state, not much lobbying is necessary.”
He cites the organization’s working relationship with not only the Department of Economic Development, but also the Department of Labor, the Department of Motor Vehicles, and the Nebraska State Patrol Carrier Enforcement Division. “We collaborate on maintaining Nebraska as a trucking-friendly state,” Johnson says, “and work together to create more jobs.”
Reaching Major Markets
Nebraska is a state full of advantages. Prominent on its list of benefits is I-80, which lies at the geographical center of the United States.
“If someone drew a target over the United States, central Nebraska would be the bull’s-eye,” says Jennifer Wolf, executive director of Dawson Area Development. “It is at the center of it all.”
Dawson County, which Wolf represents, is one of nine counties that make up the I-80 region, along with Adams, Buffalo, Hall, Hamilton, Keith, Lincoln, Phelps, and York counties. In keeping with Nebraska’s collaborative nature, all nine counties have banded together to form the I-80 Nebraska Coalition.
Spanning 250 miles east-to-west along I-80, the nine-county region extends from the Colorado state line to 45 miles west of Lincoln, the state capital, and provides extraordinary access to markets, suppliers, and vendors. Metropolitan areas within five hours of the region include Kansas City, Denver, Omaha, and Sioux Falls.
“A recent study showed that Nebraska has the highest per capita number of people employed in the trucking industry of all 50 states, and testimonials reflect excellent labor quality,” says Wolf. “Add the fact that there are more than 4,000 acres of shovel-ready controlled sites and 20-some existing facilities, and everything about central Nebraska makes perfect sense for the transportation industry.”
It is not surprising, then, that the I-80 region has become the focal point of opportunity for companies in search of the ideal site. “We’ve got what they need: land, labor, and location,” Wolf says.
I-80 is the most highly traveled interstate in the United States, and the region’s 30 primary exits along the highway provide access to three regional airports, as well as rail service from both Union Pacific and Burlington Northern Santa Fe. Four national highways run north-south across the I-80 region.
Of course, it can’t be a perfect place to do business if it isn’t also a perfect place to live. Here, too, the region stands out.
“The quality of life along the I-80 corridor is a tremendous drawing card for families – people with solid Midwestern values and a strong work ethic,” says Mark Oettinger, general manager of the Walmart distribution center located in North Platte. “As a result, we’re able to hire a quality workforce that is among our nation’s best, which helps us better serve our customers every day.”
Werner Enterprises, a transportation and logistics services provider with coverage throughout North America, Asia, Europe, South America, Africa, and Australia, finds Nebraska an ideal location for its global headquarters.
“Nebraska’s more than 8,500 miles of interstate, freeway, and arterial roads play a major role in centrally dispatching our fleet of more than 7,300 trucks and nearly 25,000 trailers, which travel three million miles per day to the contiguous 48 U.S. states,” says Derek Leathers, Werner’s president and chief operating officer.
In addition to the strategic advantages inherent in the state’s central U.S. location, Leathers cites Nebraska’s attractive business incentives (see sidebar, page 116), stable economic climate (with unemployment rates at nearly half the national rate), and low cost of living. These factors, he says, translate into hard-working, dedicated employees.
Moreover, Werner capitalizes on the advantages Nebraska offers for players in the international logistics arena. In addition to its global headquarters in Omaha, Werner maintains offices in Canada, Mexico, China, and Australia.
“Nebraska represents a centralized distribution point for import products,” Leathers says. “The road and rail transit systems facilitate economic inland delivery and offer transportation access for export shipments from Nebraska to the East Coast, West Coast, and Gulf ports.”
Leathers is also bullish on Nebraska’s business and lifestyle environment, which he says creates a comfortable home for international logistics providers – just as it does for those engaged in the domestic arena.
“Nebraska’s business culture encourages international operations through a strategic blend of government and private-sector support,” Leathers says. “There are more than 600 companies importing and exporting in the state of Nebraska across a diverse industry base. Additionally, the education system in the state offers us an excellent source of employee talent.”
These advantages have assisted Werner’s growth despite the challenging domestic and international economy. “Werner Enterprises is a debt-free company, which has allowed us to persevere through tough economic times while still investing in talent and technology,” Leathers says. “While many companies retreat from expansion plans and investment, Werner Enterprises was able to expand its global market to 117 countries and make significant overseas and domestic investments geared toward growth.”
Thomas Hastings, president of TSL Companies, knows Nebraska’s trucking traditions well. He grew up in the culture.
“I am steeped in the spirit of the transportation business,” he says. “I’ve been around it my entire life. My dad ran a small trucking company in northeast Nebraska, and I started driving a semi for him at 16 years old.”
After working his way through college at Wayne State University – by driving a truck, of course – Hastings established TSL Companies in 1981. Among the organization’s divisions is Transportation Specialists Ltd., which operates specialized tractor and chassis equipment for handling heavy commodities. In addition to its large intermodal fleet, Transportation Specialists operates a division of trucks on dedicated routes and performs contract carrier transportation.
Other TSL divisions include TranSpec Leasing, TSL Terminals, International Logistics, and TSL Logistics Ltd., the organization’s domestic third-party logistics (3PL) division. TSL Logistics maintains a coast-to-coast, border-to-border presence and offers warehousing, transloading, and consolidation services. It contracts with all major railroads, steamship lines, brokers, and carriers.
“TSL employs 500 workers, and our affiliated companies operate more than 100 offices in 85 countries,” Hastings notes. “Our intermodal terminals in Omaha, Kansas City, and Denver service all the Plains states. We are the largest intermodal company between the Mississippi and the Rockies in the upper 14 Plains states.”
Given Nebraska’s rich agricultural base, it is not surprising TSL also has expertise in the specific requirements of shipping agricultural products, by-products, and equipment.
TSL has also devoted itself to understanding and developing expertise in the international logistics chain. “Global shipping is management-intensive, and customers rely on us to make sure their shipments meet all the requirements and financial responsibilities along the way.”
Accomplishing that, Hastings says, involves a management philosophy of empowerment. “TSL delegates responsibility to every person,” he explains. “We empower our staff with not only the responsibility, but the authority to make decisions.”
Chad E. Ford, vice president for business development at Ford Storage and Moving Company, is another logistics professional who believes the Nebraska advantage is vital to success in international as well as domestic logistics.
“The global marketplace has changed the economics of raw and finished commodities within the United States,” he says, “and Nebraska is the central hub for these transactions in the Midwest.”
A diversified logistics company providing asset-based warehousing and transportation services, Ford Storage & Moving Company currently owns and operates approximately 650,000 square feet of warehouse space.
“With five metropolitan Omaha locations, we offer flexible service areas within the city to cater to many different industries,” Ford says. “Our storage facilities were strategically built to service different industries and products ranging from animal health products to mixed commodities.”
With its 3PL warehouse locations in Nebraska – along with Kansas City, Kansas – Ford Storage is a resource for customers requiring any combination of mixed transportation modes servicing business-to-business and business-to-consumer operations. The company’s customers include manufacturers, distributors, and wholesale and retail-based industries.
Ford attributes the company’s success to both its adaptability and strategic locations. “Our systems are built around our customers’ business processes,” he says. “They make the business rules and we create a method to service and manage their inventory. For example, we help companies consolidate vendors to provide cost-effective and efficient supply chain models.”
And there’s an additional asset, Ford says. He summarizes it in one word: “Focus.”
“Each Ford Storage division’s staff focuses on service every day,” Ford says. “Our upper management, account managers, drivers, and forklift operators, combined with the technological advantages of our warehouse and transportation management systems, allow Ford Storage to ‘Deliver the Difference’ to our customers.”
Yet another company that both benefits from and contributes to Nebraska’s tradition of excellence is Distribution Inc., a 120,000-square-foot warehouse that supplies value-added services to clients who realize the cost-saving advantages of outsourcing their warehouse needs.
Distribution Inc., based in Lincoln, offers warehouse services with personnel available 24 hours a day, every day. The company also offers cartage services with its own fleet of late-model power units and trailers to pick up or deliver shipments from one pallet to a full truck, locally or long distance.
Saving Time and Money
As companies survey the Nebraska landscape for just the right spot to locate, they can speed their search by seeking assistance from the economic development team at Nebraska Public Power District (NPPD). And once they’ve chosen a location, they can continue to depend on NPPD for help managing energy costs.
As the state’s largest electric utility, NPPD’s chartered area includes 91 of Nebraska’s 93 counties. It is both a wholesaler and a retailer; in some regions, it delivers power directly to business and residential customers. It also supplies power to local utilities operated by 52 towns and 25 rural public power districts and cooperatives.
Companies conducting location searches will find a database of sites and buildings, and a series of community profiles on the utility’s Web site. “If someone has additional questions about a site or community, our team of professional economic developers will work with them confidentially,” says NPPD Economic Development Manager Rick Nelsen.
Businesses already located in NPPD’s service area may work with its energy-efficiency team to conduct energy audits, identifying opportunities to decrease usage. The utility also offers incentives for conservation. One program, for example, helps commercial and industrial facilities cover the cost of upgrading to more energy-efficient lighting systems. Another assists in paying for installing high-efficiency motors.
In 2010, the utility spent more than $215 million on capital projects to expand capacity. Those projects include constructing new transmission and distribution infrastructure, and a new operations center.
NPPD also received a 20-year extension on the operating license for its Cooper Nuclear Station, and it just completed its first year as a member of the Southwest Power Pool, a regional organization that coordinates the development of transmission capacity.
NPPD works to maintain diversity in its energy sources, including renewables. The utility currently buys energy from several wind farms and has agreements to buy from several facilities due to come online in the near future. It also obtains a small amount of power from a methane recovery project attached to a swine farm, Nelsen says.
As for cost, businesses in NPPD’s service area benefit from the fact that the utility and its wholesale partners – like all electric utilities in Nebraska – are publicly owned.
“Our customers receive their dividends through their rates,” Nelsen says.
Partners in progress
“There is no question Nebraska has a long history with trucking and railroads,” says Governor Heineman.
But he and other Nebraska leaders don’t spend a lot of time looking in the rear-view mirror. They are too busy looking at – and creating – what’s ahead. One such forward-looking initiative is Intern Nebraska, a program of the Nebraska Department of Economic Development.
“It’s a state-sponsored internship program,” Heineman explains, adding that in one recent 60-day period the state invested $640,000 to help businesses invest in themselves.
“Internships work for everyone,” Heineman continues. “They help both companies and future employees.” Together, that combination helps the state.
Economic Development Director Richard Baier says the internship program is just one way that Nebraska government shows it means business. There are many others. In fact, the program is part of the Talent and Innovation Initiative, a package of bills that the governor signed into law this year, designed to assist businesses.
Based on a comprehensive review of Nebraska’s economic climate, the Talent and Innovation Initiative was created to leverage existing funds and enhance momentum in developing industries positioned to benefit from technology and innovation. “We are focused on transforming industry in America, and we want to do it first in Nebraska,” Baier says.
An education program developed by the NTA and the Nebraska Logistics Council in close association with the state departments of Economic Development and Education helps support this goal.
“We wanted to create lifelong learning opportunities in transportation, distribution, warehousing, and logistics,” explains Johnson, the NTA’s president.
To that end, seven logistics-related courses of study are now offered in Nebraska’s community colleges and university system: transportation operations; logistics planning and management services; warehousing and distribution control operations; facility and mobile equipment maintenance; transportation systems infrastructure planning management and regulations; health safety and environmental safety management; and sales and service.
“The idea was to create career pathways,” says Johnson. “You may start out as a forklift operator and become an airline pilot.”
Johnson – who began his own transportation career selling tickets for Continental Trailways when he was in junior high school in 1972 – believes it is never too early to get started. “We have two middle schools piloting a program of transportation, distribution, warehousing, and logistics career awareness,” he notes.
The reasons behind such innovative programs are easily explained.
“Those are high-paying jobs,” says Governor Heineman. “And Nebraska has a proud and rich history of serving the logistics sector.
For information on featuring your region in an Economic Development Supplement, contact James O. Armstrong at 314-984-9007 or [email protected].
Extending an Advantage
Since 2006, businesses that locate in Nebraska have benefited from an array of economic incentives under the Nebraska Advantage program. Originally designed as a five-tier program, Nebraska Advantage gained an additional component, Super Tier 6, in 2009. Businesses eligible for the Nebraska Advantage program include those in manufacturing, distribution, storage/warehousing, and transportation. The Nebraska Advantage Program includes:
Tier 2: For companies that make $3 million in new investments and create 30 new jobs. A business is eligible for a refund of all sales tax on capital purchases at the project; the sliding scale wage credit; and a 10-percent investment credit.
Tier 3: Jobs-only tier, for companies that create 30 new jobs. The company receives the sliding scale wage credit with no capital investment required.
Tier 4: For companies that make $11 million in new investments and create 100 new jobs. The company receives a sales tax refund, jobs and investment credit, and a personal property tax exemption for turbine-powered aircraft, computer systems, agricultural processing machinery, and personal property used in distribution facilities for up to 10 years.
Tier 5: For companies that make $34 million in investments and maintain employment. The company receives a refund of all sales tax on the project’s capital purchases, and a personal property exemption up to 10 years on computer systems for a Web portal.
Super Tier 6: For companies that make $10 million in new investments and create 75 new jobs, or $102 million in new investments and 50 new jobs. The program is open to any business activity other than retail. The company receives a refund on all sales tax on capital purchases for the project; a 10-percent job credit on new employees who meet certain wage thresholds; and personal property tax exemption for all personal property at the project for up to 10 years.
Nebraska Advantage offers special opportunities for companies that engage in logistics activities. “The Nebraska Advantage economic development package is one of the few that has tax credits for material-moving equipment such as forklifts, power racking, and conveyor belts,” says Nebraska Trucking Association President Larry Johnson.
In addition to Nebraska Advantage, the state holds many other attractions for businesses. A few of the highlights are: no state property or inventory tax; no personal property tax on intangibles; and no sales tax on raw materials used as ingredients or components in manufacturing, water used exclusively in manufacturing and processing, or manufacturing machinery, equipment, and related services.