Location Gives Northern Kentucky Unparalleled Edge in Moving Goods

Greg Paeth | The Lane Report | Mar 05, 2019

Amazon Prime Air Jet

Kentucky’s location is one of the reasons why the online retailing behemoth Amazon has about a dozen sites in the state.

When it comes to logistics – moving things efficiently from one place to another – you can’t teach location, which provides Northern Kentucky with a huge advantage over other parts of the United States.

Northern Kentucky has spectacular advantages like highways, airports, water, railroads, proximity to major population centers, and the availability of workers that give it the ability to deliver materials or finished products better than anyone in the U.S.

Northern Kentucky Tri-ED, the economic development agency for Boone, Campbell and Kenton counties, says that more than 100 logistics companies are located in a region that it has labeled “The Silicon Valley of Logistics.” Tri-ED touts the some 80,000 people working in transportation/logistics occupations in the Cincinnati metropolitan area and that the region is within a one-day drive or a 90-minute flight of two-thirds of the U.S. population.

Kentucky’s location is one of the reasons why the online retailing behemoth Amazon has about a dozen sites in the state, more than 15,000 employees, and intends to begin work in 2019 on a $1.5 billion Prime Air cargo hub expected to create 2,700 jobs once it’s up and running at capacity.

When it was announced in January 2017, the hub was the largest single project ever announced for the Cincinnati/Northern Kentucky International Airport (CVG) and one of the largest economic development projects in Kentucky history.

But Amazon is far from the only shipping giant to discover Northern Kentucky’s appeal.

CVG also is home to the DHL Americas Hub, one of three worldwide hubs for the German company, which handles shipments for North and South America through the airport. During the fall, the Leipzig-based shipper reported it had spent about $340 million on buildings and equipment at CVG since 2009.

Those investments paid off.

The company said international trade has generated a 24 percent increase in shipments per day over the last two years, when the company added 1,600 full- and part-time jobs, bringing its CVG workforce to 4,200.

“We anticipate that all the regulatory approvals for the Amazon building will be given next year. Hopefully there will be a shovel in the ground in 2019,” said Candace McGraw, CEO of the airport. “There has been lots of design work, lots of meetings, lots of tweaking of the project.”

McGraw said she’s hoping for a spring groundbreaking.

Amazon is operating currently at the airport in DHL facilities during the day, with DHL unloading and loading its planes at night. DHL in 2018 leased 68,000 s.f. of office space in the CVG Centre for operational support teams and training “certified international specialists.”

Growth by Amazon and DHL, McGraw said, were major factors in the airport’s 27 percent increase in cargo tonnage in 2017, the largest percentage increase in the country. At the end of 2017 the airport ranked as eighth-largest cargo airport in North America and number 34 in the world. The airport handled 1.2 million tons of cargo in 2018, an increase of 19.6 percent over 2017 and a new tonnage record.

Karen Finan, interim president/CEO of Tri-ED, made it clear that a long list of other companies are playing major roles in logistics in the region. There’s also been a quick turnaround on real estate that is needed by logistics companies, she said.

Coca-Cola Bottling Co. decided to locate a sales, distribution and warehouse facility in Erlanger because of the region’s central location and logistics expertise, Finan said. Coke plans to invest $30 million in a 300,000-s.f. building on a 32-acre site where more than 430 full-time jobs will be created.

Verst Logistics is one of dozens of logistical firms with a substantial presence in Northern Kentucky. Verst began more than 50 years ago as a trucking company in Walton and hit revenues of about $210 million in 2018 from four divisions: trucking, order fulfillment, packaging and warehousing.

“The biggest thing for us in 2018 was starting a dot.com fulfillment center, and we’re building a business strategy around that,” said Paul Verst, whose father Bill founded the business in 1966. E-commerce sales have grown more than 400 percent recently, Verst said, and his company is now handling orders for eight companies from elsewhere in the U.S. and other countries.

Verst’s e-commerce facility, the Amazon and DHL operations at the airport, a Kroger distribution center and a $150 million expansion of a FedEx facility were cited by state officials when talking about traffic growth in Boone County. To cope with increased traffic by truckers and drivers going to and from work, the county, state and federal government announced in August they would spend nearly $151 million on improvements to I-71/75 and the Richwood Road and Mt. Zion Road interchanges. The state projects the FedEx expansion alone will add 4,600 truck trips per day to existing traffic on Mt. Zion Road.

Cincinnati-based Kroger, which has annual revenues of $122 billion, opened a nearly 700,000-s.f. distribution center on Mt. Zion Road in October 2017. Kroger describes the facility as a “replenishment center” for other distribution centers in the eastern U.S. In July 2018 the company announced that it would invest another $18 million in the facility to support its e-commerce and digital services.

Late in September, BM2 Freight Services, a 10-year-old transportation company that had been located in Cold Spring in Campbell County, said it had outgrown its office space and would move its 35 employees to the high rise RiverCenter on the riverfront in Covington and eventually add employees.

Another vital element of the Northern Kentucky logistics economy is barge traffic on the Ohio and Licking rivers inside of the Ports of Cincinnati and Northern Kentucky, which ranks as the largest inland port in the country when measured by the amount of cargo – nearly 45 million tons – it handled in 2015. The port’s ranking shot up in 2015 after the U.S. Army Corps of Engineers expanded port boundaries that year from 26 miles to about 226 miles along the Ohio and Licking rivers.

A variety of industries in the region depend on the bulk shipping, almost 60 million tons annually, that comes down the river, which includes coal and petroleum products as well as grain and construction materials. The region boasts companies like C&B Marine to aid in marine services like towing, crane services, flat rental and fleeting. And clients can track products easily, thanks to the Central Ohio River Information System or CORIS. A partnership between CORBA and the Ohio-Kentucky-Indiana Regional Council of Governments, CORIS is a long-awaited asset inventory and mapping system for the public.

Amazon.com – Hebron

Amazon Prime Air – Hebron

Aries Global Logistics – Crestview Hills

B & B Transportation Inc. – Burlington

Bluegrass Diesel Specialists, Inc. – Burlington

BM2 Freight Services – Walton

Carlisle & Bray – Covington

CEVA Logistics – Hebron

Complete Forklift Repair – Corinth

DACHSER Transport of America, Inc. – Burlington

DHL Express (USA) Inc. – Erlanger

DHL Global Forwarding – Hebron

FedEx Ground – Independence

Fisher Scientific – Florence

FITS Enterprises FITS Trailer Leasing, LLC – Walton

Inland Marine Service – Hebron

Kuehne + Nagel, Inc. – Erlanger

LeanCor LLC – Florence

Legion Logistics LLC – Florence

McLane Foodservice Distribution – Hebron

Merchants Cold Storage LLC – Walton

Nippon Express USA Inc. – Hebron

NNR Global Logistics USA, Inc. – Erlanger

Panalpina Inc. – Erlanger

PEI – Dynamic Supply Chain Solutions, LLC – Florence

Penske Truck Rental – Erlanger

Pilot Freight Services – Erlanger

R.L. Swearer Co., Inc. – Erlanger

Safe Ship Northern Kentucky – Fort Thomas

Sandvik Americas Distribution Center – Hebron

SEKO Logistics Cincinnati – Florence

Southern Air – Florence

Stett Transportation, Inc. – Fort Mitchell

Team Worldwide CVG – Erlanger

Total Quality Logistics – Erlanger

Two Men and a Truck Northern Kentucky – Erlanger

UPS Freight – Cincinnati

UPS Supply Chain Solutions – Hebron

Verst Logistics – Walton

Vista Packaging & Logistics – Hebron

VR Transportation, Inc. – Hebron

This is not a comprehensive list. Information provided by Northern Kentucky Chamber of Commerce

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