The distribution center
Stopping at the headquarters of the Little Rock Port Authority, I think there should be a photographer here.
Just to my left are barges heading south on the Arkansas River. Upstream, I see heavy truck traffic crossing the river on Interstate 440. In the sky above the freeway, an airplane prepares to land at Clinton National Airport. There are train tracks nearby. Land, air, sea and rail transport come together here.
At a time when the public hears more about supply chains than they care to digest, Central Arkansas is in an enviable position, poised to become one of the nation’s premier distribution hubs. When Amazon decided to build facilities employing thousands of people in Little Rock Harbor and just across the river in North Little Rock, it sent a signal to other companies closely watching the movements of ‘Amazon.
In late December, North Little Rock officials announced that Dollar General would build a $140 million distribution center that will initially employ 300 people and eventually expand to 600 employees. 152 acres of land will house a facility covering nearly one million square feet.
“These jobs are no longer $11-an-hour jobs,” North Little Rock development manager Robert Birch said at the time of the announcement. “These jobs actually pay up to $20 an hour, come with solid benefits, and are places where you can work and grow.”
Just a month later, it was reported that Tractor Supply Co. would build a 900,000 square foot distribution center in Maumelle. The investment will be $100 million and construction will begin later this year. It will be the retailer’s 10th distribution center and will employ 450 people, a number that is expected to grow. Tractor Supply operates 34 stores in Arkansas and more than 2,000 stores nationwide.
As fulfillment centers congregate in one area, manufacturers are noticing at a time when ease of shipping is paramount. Note the announcement last October that Trex Co., which produces the nation’s leading brand of replacement wood decking, will build a $400 million facility at the Port of Little Rock. The company expects 500 people to work there within five years.
“With the outdoor living category continuing to show momentum and our success to date in converting wood decking market share, now is the time to further expand our capacity so that we can meet the future customer demand effectively and efficiently,” said Bryan Fairbanks, Trex’s CEO.
Effectively. Indeed. These are the keywords for logistics in 2022.
Trex has manufacturing operations in Virginia and Nevada. It needed a facility to serve the middle third of the country. Company officials cited proximity to railroads, interstate highways, the airport and the river as factors as it seeks to reduce transportation costs.
Trex, which has more than 1,700 employees, manufactures products with 95% recycled materials. Raw materials include everything from plastic shopping bags to reclaimed wood scraps and discarded plastic films. The company is one of the largest polyethylene recyclers in the world.
“This regional manufacturing and distribution center will greatly benefit from our incredible assets – those that are river, road, rail and air all intersect in one place,” said Little Rock Mayor Frank Scott Jr.
After watching the barges for a few minutes on a sunny spring Tuesday, I walk inside the harbor headquarters to visit Bryan Day, the authority’s executive director. Day notes that workers come from 23 of Arkansas’ 75 counties to work at businesses that call the port home. When Day took over here in 2014, around 4,000 people worked at the port. It is now over 8,000.
“The stars have aligned for us,” he says. “The next three to four years are going to be good. I honestly believe there will be at least 15,000 people working here in 10 years.”
Amazon is secretive about the exact number it employs. Based on the number of cars, authority officials believe there are already more than 3,000 people working at the Little Rock facility. This does not include the hundreds of others who work in North Little Rock.
“We’ve reached the point where we need restaurants, bank branches and daycare centers here,” Day said. “We’ve had an amazing few years, and there are more announcements to come.”
In addition to distribution centers and manufacturing facilities, Day believes the port can benefit from the lack of quality warehouse space in Arkansas. He says the developers are planning massive warehouses for the port.
Another positive development was the Federal Aviation Administration’s decision to move what is called a VOR cone (an aircraft radio navigation system) from port property. The cone has been in its current location since 1946. The Little Rock Port Authority was organized in 1959. Day even involved the Arkansas Congressional delegation in the effort to move the cone at port expense to a site 110 acres near the Galloway exit on Interstate 40 in North Little Rock.
“We’ve run out of land,” Day said. “We had to move that cone.”
Day hopes the current facility will be closed by the middle of next year. This will add 55 acres to the middle of what Day calls a 1,000 acre “supersite”. He thinks it might be the best such site in the South given the region’s logistical advantages. Day can envision an automobile assembly plant or other large manufacturer setting up shop there.
When Day went to work at the port, there were approximately 2,700 acres in the complex. They are now close to 5,000.
“If we can get the right manufacturer to use the supersite, suppliers will follow,” Day says. “My goal is to continue to buy more land and make more announcements that add to the central Arkansas economy. We want to get better in the years to come when it comes to land management and real estate development. J “hope we can buy another 3,000 to 4,000 acres from willing sellers south of us and then add to our list of 45 companies.”
When Day talks about real estate development, Trex’s plans provide a great example of what he hopes to accomplish with other companies. Trex will not have just one manufacturing plant. It will develop a 300-acre campus that will include dedicated buildings for decking and railing production, plastic film recycling and processing, and salvaged wood storage areas. There will be warehouses and administrative offices. Construction will begin this year with first production scheduled for 2024.
Current port businesses include HMS, a manufacturer that designs household items; Interstate Signways, which designs and manufactures transportation signs used nationwide; Welspun Tubular, which manufactures steel tubing for the oil and gas industries; Lexicon Inc., which manufactures steel products, and Revolution Bag, which produces can liners.
There aren’t many business and industrial parks in the country that can claim to be one mile from a national airport and seven miles from downtown a state capital. Not to mention being along the McClellan-Kerr Arkansas River Navigation System, which stretches 448 miles of the Mississippi River 15 miles east of Tulsa.
Union Pacific and BNSF serve the port’s switching railroad, handling more than 10,000 rail cars annually. The port is also classified as Foreign Trade Zone No. 14. At the heart of the port are three full-service river terminals, including the main terminal and two calm-water port quays.
According to a document from the Little Rock Port Authority: “Whether manufactured here or shipped here, the composition of the port’s commodity market is intended to attract businesses in sectors such as high-tech food products, chemical manufacturing, machinery manufacturing and expanded primary metal manufacturing. The port can move an impressive 200 tonnes inbound and 350 tonnes outbound of cargo per hour.”
At a time when the supply chain matters more than ever, Day seems to have an exceptionally strong hand to play. It will be good for all of Arkansas for years to come.
Rex Nelson is editor of the Arkansas Democrat-Gazette.