Prime Location for Logistics: Nebraska
Centrally located and boasting a highly trained workforce and low industrial power rates, Nebraska offers an ideal site for logistics operations.
Logistics is serious business in Nebraska, and Nebraska is serious about making the state an attractive place for logistics operations.
"Since 2000, the state of Nebraska has made transportation and logistics a target industry," says Terry McMullen, a board member of the Nebraska Logistics Council. The state government, local communities, and their corporate partners work together to ensure that when a business wants to locate a factory, distribution center, or other logistics facility in Nebraska, it gets plenty of help.
These efforts clearly pay off. Forbes magazine named Nebraska the ninth-best state for business in 2009, and CareerBuilder.com named it the fourth-best state for jobs in 2008. As of February 2010, Nebraska’s unemployment rate stood at only 4.7 percent—less than half the national rate.
Companies that locate in Nebraska enjoy a business-friendly political climate; an enthusiastic, well-educated workforce; reasonable labor rates; abundant, low-cost real estate; and some of the lowest utility bills in the nation. People who work for those companies enjoy uncongested highways, a clean environment, and an excellent quality of life in Nebraska’s communities.
Nebraska also is located right in the middle of the continental United States and is well-connected to markets across the country and around the world. It’s a prime location for a manufacturing plant or distribution center.
MANY WAYS TO REACH MAJOR MARKETS
Nebraska’s history as a transportation center goes back to the days of our country’s westward expansion, when pioneers followed the Great Platte River Road west. The Oregon Trail, Mormon Trail, California Road, and the route of the Pony Express all converged in the valley of Nebraska’s Platte River. When it came time to build the nation’s first transcontinental railway, the rails followed those older paths across Nebraska, running through the Platte River Valley to connect Omaha with Sacramento, Calif.
Today, Nebraska remains an important center for transportation and logistics. The state’s location at almost the precise center of the contiguous 48 U.S. states makes it a natural hub for commercial transportation. More than 55 million people live within 500 miles of Nebraska. That’s a tremendous advantage to transportation and logistics leaders operating in the state, such as Union Pacific Railroad (UP), Burlington Northern Santa Fe Railway (BNSF), Werner Enterprises Inc., Crete Carrier Corp., and Cargo Zone LLC.
Highways. With 482 miles of Interstate 80 crossing the state from east to west, Nebraska lies in the middle of one of the nation’s busiest transportation corridors. I-80 and connecting interstate roadways offer easy, direct transportation to major markets such as Denver, Salt Lake City, and Sacramento to the west, and Des Moines, Chicago, and Detroit to the east.
Seven U.S. highways run north and south through Nebraska, and I-80 connects with I-25 just west of the state. These roads put Nebraska in the center of the NAFTA trade corridor. For businesses in Omaha, South Sioux City, and other points at the eastern end of the state, it’s an easy hop to I-29, another major north-south route.
Transportation opportunities in the southeastern part of the state will continue to grow as Nebraska upgrades I-80 to six lanes from Omaha to Lincoln and points west. "We’re also hoping to build new Missouri River bridges south of Omaha," says Richard Baier, director of the Nebraska Department of Economic Development.
Nebraska maintains more than 8,500 miles of interstate, freeway, and arterial roads. Among the businesses that benefit from that highway network are the state’s 11,500 trucking companies, two of which—Werner Enterprises Inc. and Crete Carrier Corp.—are among the nation’s top 10. In all, those companies operate more than 815,000 pieces of power equipment.
"The number of trucking companies here guarantees a reliable freight pattern in and out of the state, which moderates rates without the seasonal highs and lows many areas have," says Larry Johnson, president of the Nebraska Trucking Association.
Jarrod Marinello, a partner in non-asset-based service provider BAT Logistics, Papillion, Neb., appreciates that truck capacity in the state is abundant and reliable. "If you need a load picked up in Omaha, there are likely to be 200 trucks in a 100-mile radius to choose from," he says.
The seasonal nature of manufacturing in many other markets means that at some times of the year, it’s nearly impossible to get your freight on a truck, Marinello says. In Omaha, by contrast, many manufacturers ship year-round, and there’s plenty of capacity to meet that steady demand.
Rail. The two largest railroads in the nation—UP and BNSF—operate extensively in Nebraska. In fact, Nebraska is home to UP’s headquarters, its dispatch center, and its largest rail yard. From its base of operations in Omaha, the railroad provides service spanning 32,000 route miles to 23 states across the western two-thirds of the country. UP serves every major West Coast and Gulf Coast port, and, through its gateways in Chicago, St. Louis, Memphis, and New Orleans, customers can also reach the East Coast. Its north-south corridors provide links to Canada’s rail systems and connections to Mexico’s six major gateways.
Among UP’s facilities in Nebraska is Bailey Yard, the world’s largest classification yard. Located in North Platte, the facility is more than eight miles long and two miles wide, covering more than 2,850 acres and incorporating about 315 miles of track. The yard handles more than 10,000 rail cars daily, sorting them and assembling them into trains.
UP is so important as an employer in the North Platte region that the Nebraska Department of Labor’s Nebraska Workforce Development division set up a facility to help recruit employees. "They do most of the front line screening for UP out of a retail storefront in downtown North Platte," says Baier.
Although BNSF is based in Texas, its parent company, Berkshire Hathaway Inc., is a prominent fixture in Omaha, and the railroad maintains rail yards in Lincoln and Alliance. BNSF operates about 32,000 route miles in 28 states and two Canadian provinces.
Air. Nebraska has 95 municipal airports, including nine that offer direct commercial airline service to major hubs. The principal airports are Lincoln Airport, Eppley Airfield in Omaha, North Platte Regional Airport, and Kearney Regional Airport. In addition, UPS operates hubs in Omaha, Scottsbluff, and Grand Island.
Twenty jet service carriers and eight freight carriers offer service from Eppley Airfield, with approximately 90 departures each day.
Service from the airport includes non-stop travel to 18 cities. In 2009, the airport handled 102 million pounds of cargo.
Built originally as a military air base, Lincoln Airport provides service on Delta/Northwest and United. The airport offers significant infrastructure capacity, including property with development potential. The Lincoln Chamber of Commerce and the Lincoln Partnership for Economic Development are starting to map a master plan for industry utilization of the airport, including development of a cargo hub.
The property already is served by UP and BNSF rail lines, and it’s immediately adjacent to I-80. "There are potentially hundreds of acres that can be developed for future logistics opportunities," Baier says.
River. Along with highway, rail, and air, Nebraska also boasts another cost-effective transportation option: the Missouri River. Barge service on the Missouri offers access via all-water routes to both the Gulf of Mexico and the Atlantic Ocean.
The construction of Fort Calhoun Station, a nuclear power plant owned by the Omaha Public Power District, provides an example of strategic barge shipping. Several years ago, this facility received two steam generators, a pressurizer, and a reactor head, all enormous equipment manufactured in Kobe, Japan. The components made the final leg of their trip via barge.
POWER AT A GREAT PRICE
Another factor that makes doing business in Nebraska a bargain is the low cost of electrical power.
Nebraska is the only U.S. state served entirely by publicly controlled utilities—either municipal power companies, rural public power districts, or electricity co-ops. Nebraska’s focus on public power dates to the 1930s, when the state’s U.S. Senator George Norris authored legislation that created both the Tennessee Valley Authority and the Rural Electric Administration.
"In Nebraska, he was an advocate for a law that allowed for the formation of public power districts," says Dennis Hall, economic development manager at Nebraska Public Power District (NPPD), the state’s largest generating electrical utility.
Public power makes electricity considerably cheaper in Nebraska than in most of the rest of the country. "Our electric rates typically average about 42 percent less than the national average," says Baier.
According to the Edison Electric Institute, the average monthly bill for industrial service in Nebraska in the summer and winter of 2009 was $2,882.That made Nebraska the eighth least-expensive state for power. This economical power supply offers big savings to businesses with high energy usage, such as refrigerated warehouses.
Because the public power companies own both the generation and transmission facilities, no money goes into paying a middleman. "The companies also are not trying to maximize corporate profits for reinvestment," says Baier.
Since public utilities report directly to the citizens they serve, they take great pains to maintain low costs, says Todd Hall, vice president, consumer services at Lincoln Electric System (LES), which serves about 130,000 accounts in Lincoln and the surrounding area. "We run on a thin margin, but we operate successfully and still maintain a double-A bond rating and exceptional financial performance," he says.
Besides being inexpensive, the electrical supply in Nebraska also is highly dependable. "LES is operational 99.996 percent of the time," says Hall.
NPPD’s reach is wide; its chartered territory includes all or parts of 91 of the state’s 93 counties. "Our major transmission and distribution lines cross the state," says NPPD’s Hall. The utility relies on a variety of power sources, including hydroelectric, low-sulfur coal, natural gas, nuclear, and some of the newer renewable sources.
"NPPD owns the second-largest wind farm in the state, and we have a power purchase agreement to buy wind energy from the largest wind generator in the state," says Ken Lemke, an NPPD economist.
Along with generating power at a competitive price, Nebraska’s utilities participate fully in the partnership that makes it easy for businesses to locate or expand in the state. For example, working with the Nebraska Department of Economic Development, local communities, the railroads, rural power districts, and other partners, NPPD helps to ensure that companies can get all the information and services they need to increase their footprints in the state or to find new locations. That effort includes keeping an inventory of land available for development and existing industrial sites on the NPPD Web site.
One international pharmaceuticals manufacturer engaged LES to help it study the benefits of expanding into Lincoln. "We did a full-on comparison of all the sites they were considering, evaluating factors such as utility operations and cost of living," Todd Hall says. "The analysis showed that the lifecycle cost of operating in Lincoln was significantly lower, even compared to low-cost operating parts of the world, such as India. That study enabled us to bring 100 new jobs to our community and keep an international corporation satisfied with doing business here."
Since 2006, businesses that locate in Nebraska have benefited from a formidable array of economic incentives under the Nebraska Advantage program. Originally designed as a five-tier program, Nebraska Advantage gained an additional component, called Super Tier 6, in 2009. Businesses eligible for the Nebraska Advantage program include manufacturing, distribution, storage/warehousing, and transportation.
The Nebraska Advantage Program Includes:
Tier 1: For companies that make $1 million in new investments and create 10 new jobs. A business is eligible for a refund of one-half the sales tax paid for capital purchases at the project; a sliding scale wage credit of three to six percent, depending on wage level; and a three-percent investment tax credit.
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," says the Nebraska Trucking Association’s Johnson. "Anything from forklifts to power racking to conveyor belts receives a tax incentive."
Beyond Nebraska Advantage, Nebraska 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.
While Nebraska offers an array of attractive business incentives, an equally large attraction is the stable economic climate. "Nebraska runs a balanced budget," says Derek Leathers, chief operating officer at Werner Enterprises Inc., a major truckload carrier and logistics services provider based in Omaha. "It’s not a state that’s burdened with extreme debt. Therefore, it’s not a state that’s going to suddenly and abruptly raise taxes just as quickly as it lowered them."
Also, government leaders at all levels—from mayors to the governor—are extremely accessible. "If you have concerns, you can express them," Leathers says.
Several years ago, for example, officials at Werner questioned how their unemployment taxes were calculated. "We didn’t feel that companies were rewarded for having low turnover," he says. "So we expressed those concerns, and eventually they passed laws that do reward companies that retain their employees."
The strong agricultural focus of Nebraska’s economy has a lot to do with the state’s economic stability, says Tom Hastings, president and CEO of TSL Companies. A steady and growing demand for products produced in Nebraska keeps the economy on an even keel.
Based in Omaha, TSL Companies consists of four subsidiaries whose services include: transporting ocean containers to and from rail heads; storing empty containers for steamship lines; non-vessel operating common carriers (NVOCC) service; and freight forwarding.
"We export from Nebraska constantly," Hastings says. Products that his company helps on their way to overseas markets include corn, soybeans, soybean meal, animal feeds, and many other food commodities. TSL also moves equipment such as center pivot irrigation systems—which are widely manufactured in the state—and grain bins.
Along with its agricultural heritage, Nebraska’s economy benefits from the conservative nature of the Midwestern character. "There’s not a lot of speculative building here," says Bruce Meyers, co-owner of Omaha-based Nebraska Warehouse Company, which provides public and contract warehousing in three local warehouses. Its trucking company, Cannonball Express, offers refrigerated less-than-truckload (LTL) service and intermodal transportation in the Omaha-Lincoln market. The company also builds large warehouses and warehouse office/showroom facilities that it leases to other companies.
The company does not, however, construct those buildings without a reasonable certainty that there’s a tenant waiting. "Overbuilding is rare here. Very few developers do commercial or industrial real estate on spec," Meyers says. "If we build 100,000 square feet, we may need 60,000 for ourselves, and then we’d try to lease the other 40,000. We take some risk, but not a lot."
Nebraska’s government shares that knack for fiscal prudence. "We have a provision in our constitution that prohibits the state from borrowing money," says Baier. "Some states are borrowing their way out of problems with no plans for repaying. That won’t be the case in Nebraska."
It took state legislators in Nebraska only 12 days to trim approximately $350 million from the state’s budget, and lawmakers have made a conscious decision not to raise taxes. "We feel very fortunate that not only have we been able to cut taxes in the past four years, we’ve also been able to control our spending through good decision-making," Baier says.
WORK ETHIC BREEDS SUCCESS
As of 2008, approximately 964,700 people were employed in non-agricultural jobs in Nebraska. The state’s large pool of hard-working, dedicated employees is one of Nebraska’s major attractions. "The quality of Nebraska’s workers is a huge part of Werner’s success," says Leathers.
Leathers attributes Nebraska’s work ethic to the state’s agricultural heritage. But it’s not only on the farm that you find workers who get up early and make it to their job site even in the most difficult conditions. "On a snowy Nebraska day, our parking lot is full of cars. Our workers make the extra effort to come in," he says. "That dedication translates into a high level of service for our customers."
Hastings agrees that workers in Nebraska demonstrate a tremendous sense of responsibility. "Over the years, that has been an advantage for us as a company," he observes. "We’re doing business worldwide, and competing against companies that aren’t located here and may not have the labor resources we have."
Thanks to the low cost of living in Nebraska, staffing up with dedicated, educated employees doesn’t have to mean that a company pays top dollar. When Marinello and his business partner were deciding where to start a third-party logistics company, they considered both Omaha, where the partner was working for UP, and Atlanta, where Marinello was located. One major factor that tipped the scales toward Omaha was the cost of labor.
"Applicants in Omaha were asking 20 percent less in salary than people in Atlanta," Marinello says.
Part of the secret behind Nebraska’s outstanding workforce is the state’s education system. Nebraska boasts one of the highest teacher-to-pupil ratios in the country, and one of the best rates of high school graduation. After high school, students who seek further education within the state can choose from among eight community colleges, three four-year state colleges, five public universities, and 12 independent institutions of higher learning.
Nebraska has made a special commitment to creating a pool of trained employees to work in transportation and logistics positions. That effort is intense and starts early. Government and industry partners have taken a "middle school-to-master’s-degree" approach, providing opportunities to train for careers in logistics at numerous levels.
McMillan Middle School in Omaha, a magnet school focused on mathematics, engineering, communication arts, and technology, offers a curriculum in Transportation, Distribution, Warehousing, and Logistics (TDWL). Omaha’s Bryan High School also offers a four-year TDWL sequence designed to train students for careers in areas such as driving, diesel engine repair, transportation sales, and supply chain management.
"Millard South Public Schools in west Omaha are also starting a TDWL career academy program, so young adults have another learning opportunity," says McMullen. "These students graduate high school with a significant head start on an associate’s degree in logistics."
The commitment continues with diesel driver and diesel technology training programs at four community colleges: Metropolitan in Omaha, Southeast in Lincoln, Central in Hastings, and Northeast in Norfolk. The University of Nebraska-Lincoln offers a graduate certificate in logistics. And Bellevue University offers a Bachelor of Science in logistics management and a Master of Business Administration with a concentration in supply chain management.
McMullen has experienced firsthand the advantage of operating a business within reach of Bellevue’s logistics programs. An employee at one of his businesses, Cargo Zone LLC, currently is going through the Bachelor of Arts program and considering continuing there to earn an MBA. "He had the interest from working as a warehouse laborer, and he has already become the foreign trade zone administrator," says McMullen.
A further indicator of Nebraska’s commitment to the logistics industry is the $75,000 job training grant that the Department of Economic Development awarded to the Nebraska Trucking Foundation in 2008. Designed to alleviate the driver shortage that existed at the time, the grant was provided to fund 250 hours of training behind the wheel for prospective drivers who had just completed a commercial driver’s license program at one of the community colleges. It would also allow 13 small trucking companies to send one of their experienced drivers to a state community college to become a driver trainer.
LEADING THE WAY IN RESEARCH
Nebraska also is a leader in transportation research. The Nebraska Transportation Center at the University of Nebraska-Lincoln operates programs in transportation systems engineering, technology transfer, public administration and finance, structural and safety engineering, health, safety education, hydraulics and fluid mechanics engineering, and geotechnical engineering.
In addition, the university’s Department of Industrial Management Systems Engineering operates the RFID and Supply Chain Logistics Lab, focused on applications of radio frequency identification (RFID) technologies. The lab represents an alliance between the university and partners such as Square D, Lincoln Plating, Riviana, UPS, General Dynamics, and the National Aeronautics and Space Administration.
One of the lab’s current projects is improving grain transfer from truck to train. The researchers seek to cut the cost of making these transfers, save energy, and reduce greenhouse gas emissions. Another project is investigating the use of RFID technologies to help astronauts better manage onboard inventory during space missions. By integrating RFID with a real-time location system, the researchers hope to produce a system that can make inventory updates automatically and help astronauts locate misplaced equipment.
THE OMAHA ADVANTAGE
The roots of trade and the transportation industry run deep in Omaha. "Omaha grew up as a trading post. That’s how the area was founded," says Rod Moseman, vice president of economic development at the Greater Omaha Economic Development Partnership.
Today, the Omaha metropolitan area is home to about 840,000 residents. Businesses in the region enjoy abundant service via all four transportation modes that connect Nebraska with the rest of the United States and the world. Omaha sits at the crossroads of Interstates 80 and 29. It’s the headquarters of Union Pacific Railroad and home to Berkshire Hathaway, the parent company of Burlington Northern Santa Fe Railway. Omaha also is home to the state’s largest airport, Eppley Airfield, and provides access to barge transportation on the Missouri River.
Moseman cites a fifth vital transportation mode in Omaha: the movement of information over telecommunications lines. The region has been a telecommunications center since the days when Offutt Air Force Base, just south of Omaha, became headquarters for the Strategic Air Command (SAC), which commanded the U.S. nuclear arsenal during the Cold War.
SAC required excellent communications capacity. "As a result, from the very early days, redundant cabling came into Omaha," Moseman says. Since then, the region has become a node on numerous transcontinental fiber optic cable routes, ensuring abundant access to bandwidth.
That communications capacity has persuaded many companies to establish data centers in Omaha. It also offers a priceless resource for logistics—a sector where the movement of freight has become inextricably tied with the movement of information.
Omaha is a center for global trade as well. "The Omaha Chamber is the grantee for Foreign Trade Zone Number 19," Moseman says. The public warehouse operated by Cargo Zone LLC provides FTZ services for companies that don’t move enough volume to justify establishing a facility of their own. One manufacturer, Syngenta Crop Protection, operates its own sub-zone within the general purpose FTZ.
In addition, "we have property near the airport that is already pre-designated as a general purpose foreign trade zone," Moseman says. A company that builds a facility on that property would be able to operate its own FTZ.
Omaha has its own U.S. Customs and Border Protection office as well. "Shippers don’t have to wait for a Customs agent to drive here from hundreds of miles away," Moseman says. "Omaha is truly a port of entry."
Businesses looking to site logistics facilities enjoy a special advantage in the Omaha region. The Greater Omaha Economic Development Partnership is a regional enterprise, including organizations from both the city of Omaha and several surrounding counties. They all work out of the same office, and they all collaborate in helping businesses.
"Our team operates as if there were no city limits or county lines," Moseman says. Companies that locate in the region can choose from urban, suburban, or rural settings.
"We’re not constrained by artificial or governmental boundaries. We have room to grow," he adds.
FRESH POTENTIAL IN LINCOLN
In economic terms, life in Lincoln today is terrific. According to a Feb. 18, 2010, article in USA Today, the unemployment rate in the Lincoln metropolitan area stands at only 4.1 percent, the second-lowest in the country. In fact, unemployment in Lincoln has never gone above five percent in the 120 years that the federal government has been tracking such numbers. And the real estate bubble and subsequent collapse that wreaked so much havoc on the national economy barely affected Lincoln.
One center of opportunity for businesses in Lincoln is Lincoln Air Park West, the 1,000-acre industrial park owned and operated by the Lincoln Airport Authority. Developed on the site of the former Lincoln Air Force base, the park offers a variety of buildings, including hangars constructed for the air base and new, modern buildings in steel or precast concrete. Many of the tenants are engaged in light manufacturing or warehousing.
The park also has plenty of room for expansion. "Within the old Air Force base area itself, there is open land, and all the infrastructure—streets and utilities—is there," says John Wood, executive director of the Lincoln Airport Authority. North of the airport, land that has not yet been developed offers space for businesses that require large parcels.
"Part of that property could be served by both Union Pacific and BNSF," he says.
That undeveloped section of the Air Park also boasts an FTZ, making the advantages of that designation available to companies that locate on the property in the future.
Lincoln Air Park West is only 1.5 miles from I-80 and, of course, the airport is right next door. "If a company had an industrial need for access to the runway and taxiway system, we could accommodate it," says Wood.
Because the Air Park is publicly owned, it is not subject to local property taxes. Also, if the Authority is doing a "build-to-suit" development for a tenant, public financing is available through industrial revenue bonds issued by the Airport Authority. "That’s a very economical method of financing," Wood says.
For companies that locate in central Nebraska along the I-80 Corridor, one of the biggest attractions is the transportation infrastructure. Not only does "America’s Main Street" run through the region, but the area affords easy access to four major U.S. highways running north and south. The Corridor also offers several access points to the UP and BNSF railroads.
"In Hall County, Buffalo County, and Adams County, both railroads cross each other," says Marlan Ferguson, president of the Grand Island Area Economic Development Corp., which is a member of the I-80 Nebraska Coalition.
Easy access to these facilities makes transportation a simple matter for businesses in locations such as the Platte Valley Industrial Park in Hall County. "It’s three miles from the Interstate and has access from two four-lane highways that go to the Interstate," Ferguson says.
With their abundant, inexpensive real estate and pro-development attitudes, communities along the I-80 Corridor are attracting interest from companies in several key industries. Nova-Tech, a manufacturer of pharmaceuticals for animals, has been expanding in the Platte Valley Industrial Park. The area also has caught the attention of businesses looking to locate distribution centers, and businesses that manufacture products for wind energy production.
"The interest is partly based on our location," Ferguson says. Central Nebraska stands in the center of a triangle formed by wind farms in Minnesota, Iowa, Montana, Oklahoma, and Texas. Also, thanks to the area’s agricultural roots, many workers have experience in manufacturing machinery and buildings, giving them skills that transfer easily to manufacturing wind turbines and associated products.
NEW CONSTRUCTION IN KIMBALL
In western Nebraska, the City of Kimball offers quick access via I-80 to points east and west, and via U.S. Highway 71 to markets from Mexico to Canada. Highway 71 is part of the Heartland Expressway, a federally designated transportation corridor created to provide multi-lane transportation between Rapid City, S.D., and Denver and to link Colorado Springs with cities in Texas.
Union Pacific Railroad also serves Kimball, with a small rail spur on the west side of town. By the end of 2010, the city plans to have a second, larger spur in operation to serve the east side of town, says J.P. Komorny, director of economic development for the city.
The new, $7-million facility will include a high-speed line with two high-speed switches and several tracks for loading, unloading, and distributing rail cars. The project also includes 9,500 feet of main line connecting to Union Pacific’s track.
In conjunction with the rail construction, Kimball is developing about 60 acres of land, with more possible. "We could potentially develop 600 acres," Komorny says.
Castronics, a manufacturer of pipes for oil and water wells, recently leased land along the new spur. City officials also are talking with several other companies about taking space there.
Another transportation upgrade in the works in Kimball is a bypass that will connect I-80 and U.S. 71, with outlets on Highways 30 and 71. That project, too, is expected to attract new businesses.
"Toward Highway 30 East, we are developing plans to increase the infrastructure to support new construction," Komorny says. "I’m currently in discussions with a few large rest areas and truck stops, and some additional developers for purchasing land and developing commercial sites."
Another factor stimulating interest in Kimball is the growth of wind energy in the region. Wind turbines are already operating in Kimball, and new construction will begin this year in Banner County, just north of Kimball, and Weld County, Colo., just south of town. As these installations grow, Kimball is becoming a key transit point for both the turbine components and the equipment used to construct them, and a point for housing the short- and long-term maintenance crews.
NEWS FROM NORFOLK
In the northeastern section of Nebraska, transportation opportunities via the U.S. highway and rail systems have helped to draw manufacturers and distributors to Norfolk and the surrounding region. "Between our five largest manufacturers, about 500 semi truckloads leave this area daily," says David Simonsen, executive director of the Elkhorn Valley Economic Development Council.
Affiliated Foods Midwest has a distribution center in Norfolk. Nucor Corporation, a leading manufacturer of steel products, operates four facilities in the community. Milk Specialties, a producer of ingredients used in protein drinks, recently closed on a property in Norfolk. "That’s a $10-million project," Simonsen notes.
Plans to develop a new stretch of road connecting Highways 35 and 81 outside of Norfolk will spell good news both for companies already operating in that area and for others that might want to locate nearby. A joint venture of the city of Norfolk, Madison County, and Stanton County, the project to build the approximately three-mile-long connector is set to start this spring. The targeted completion date is in 2011.
"Our businesses wanted the new road," says Simonsen. Nucor Steel, Norfolk Iron and Metal, Apache (a division of farm equipment manufacturer Sinco Industries, Inc.), and a Louis Dreyfus ethanol plant are all located near the proposed connector and all will enjoy easier highway access because of it.
Norfolk and the two counties are conducting the $13-million construction project without any state or federal funds. Together with a $1.4-million road project that the city of Norfolk is conducting in the same area, the connector will help to open new land for industrial development, possibly including a multi-county industrial park. "There’s a lot of untapped potential," Simonsen says.
NEBRASKA ADDS UP
Many virtues that make Nebraska a great place to do business also make it an attractive home for the people who work in those businesses. No wonder Business Facilities magazine ranked the state fourth on its "Best Quality of Life" list in 2008.
The same low costs that benefit businesses in Nebraska make the state an economical place to live and raise a family as well. "The cost of living is 89 to 90 percent of the national average," says Baier. Whether you’re shopping for food, housing, utilities, transportation, or health care, you’ll get more value while spending less in Nebraska.
Even hospital care is a bargain: the average daily cost of a hospital stay in Nebraska is 27 percent lower than the nation’s average. While the price may be low, though, the quality of care is high. The ratio of hospital beds to patients in Nebraska is one of the highest in the country, and the state’s hospitals are equipped with the latest technology. In 2007, Expansion Management magazine ranked Nebraska among the top 10 states that received five stars on its healthcare cost quotient.
Nebraska’s low unemployment levels—even in the midst of a recession—mean that willing workers find a warm reception throughout the state. And getting to work in Nebraska is quick and easy: the U.S. Bureau of the Census finds that Nebraskans have the fourth-lowest average travel time to work in the country.
"Strong communities, a clean environment, and quality education make life in Nebraska attractive," says Baier. "Couple that with sound government, low crime, and quality healthcare, and you have a long-term foundation for a successful state."
Add those quality of life factors to all the virtues that make for a flourishing logistics operation—central location, strong transportation infrastructure, numerous service providers, abundant and inexpensive real estate, and an educated, dedicated workforce. Taken together, these advantages make Nebraska an outstanding business location.
For information on featuring your region in an Economic Development Supplement, contact James O. Armstrong at 815-334-9945 or [email protected].
Ford Moving and Storage: Perfectly Positioned
Nebraska’s position in the center of the country makes it an ideal location for an asset-based logistics firm such as Omaha-based Ford Moving and Storage Co. “Nebraska offers speed to market,” says Chad Ford, the company’s vice president of business development. “Trucks can cover approximately 91 percent of the domestic United States within two travel days.”
Ford Moving and Storage operates two warehouses in Omaha and three in La Vista, Neb., along with another facility in Kansas City, Kansas. Besides warehousing and fulfillment, it offers truckload transportation and intermodal drayage and serves as an agent for Allied Van Lines. Ford serves customers in many industries, with a special focus on mixed commodities, food grade products, animal health, and seasonal businesses.
“Many organizations consider transportation costs, transit periods, and access to railways as deciding factors when locating manufacturing and distribution services,” Ford says. Nebraska rates well in all those areas, making it an excellent choice.
The state’s central location also is a major plus for Distribution Inc., which provides warehousing and distribution services from a 200,000-square-foot facility in Lincoln. “We’re right on I-80, so we can deliver overnight service between Denver and Chicago,” says Bob Winter, the company’s CEO and president. “And we sit on I-29, which goes to Sioux Falls, Sioux City, Minnesota, and Kansas City.”
For some of its customers, Distribution Inc. receives and stores raw materials and then delivers them to local plants for use in manufacturing. Other companies in the Lincoln area use Distribution Inc. to warehouse their finished goods and transport them to customers. The company operates a fleet of trucks that covers a radius of about 300 to 500 miles.
In some cases, suppliers outside the Midwest ship materials to Distribution Inc. for eventual delivery to their customers in the region. “One overseas shipper has customers in Denver, Chicago, and Kansas City,” Winter says. “From our site, it can service all three locations overnight.”
Adams Industries: From Munitions Depot to Inland Port
Just as Lincoln has turned a former Air Force property into a thriving industrial park, a logistics service provider in the western part of the state has given new life to a former military installation.
Adams Industries Inc. in Sidney has taken over part of an old World War II Army munitions depot, creating 700,000 square feet of indoor warehouse space and more than 500 acres of outdoor storage.
The property is close to I-80 and is served by both the Union Pacific and Burlington Northern Santa Fe railroads. In fact, the company has just been designated a BNSF Premier Transload Partner.
This facility has become popular for distribution into Colorado’s Front Range, says Richard Baier, director of the Nebraska Department of Economic Development. “Adams has attracted significant attention because of the on-site dual rail, trucking capacity, and available vacant buildings.”
Among other uses, Adams is transporting specialty pipe, used in the natural gas industry, from ocean ports in Texas to this inland port via rail, says Larry Johnson, president of the Nebraska Trucking Association. From there, Adams transports the pipes by truck to their final destination.
“Adams can keep the shipments on the largest vehicle longer and transport them to a central point,” Johnson says.
The wind energy industry is also discovering Adams as a central site from which to distribute components used in wind turbines to surrounding states such as Wyoming, Colorado, North Dakota, South Dakota, and Iowa.