River feeds Aerotropolis concept
Oldest mode of transportation also most economical
Memphis Business Journal - by Andy Ashby
When you think of aerotropolis, the Mississippi River probably isn’t the first thing to spring to mind. But as the oldest mode of transportation in the area, its ability to move raw goods, fuel and materials cheaply make it an integral part of Memphis’ transportation industry. In the aerotropolis concept, which is centered around Memphis International Airport, the river system provides an inexpensive level of access not available across the nation. This makes Memphis quadramodal, helping the city lay claim to the title of “America’s Aerotropolis.” In 2008, 16.3 million tons of goods, including 5 million tons of petroleum products, were transported through Memphis’ port system, ranking it 40th nationally in domestic trade volume among all ports, including coastal ports.
The city’s port system is the fourth largest inland port in the U.S. with an economic impact of $5.5 billion annually. Rivers like the Mississippi were the first interstate highway system, able to move large amounts of goods across the country, according to Don McCrory, executive director of the Memphis and Shelby County Port Commission. The Port Commission was created in 1947 to handle development and operations at the International Port of Memphis. “The river system has always been important to the transportation system because of its far-reaching abilities,” McCrory says. “It was always the more economical way of moving cargo.” Today, much of the nation’s cargo comes by ocean, but it is tied to the river system. Memphis’ riverfront really started to take off as an economic tool before the Civil War with cotton trade. Memphis started to grow as a port when the railroads decided to build a bridge across the Mississippi River in the 1890s, McCrory says. Since then, industrial development has grown up around the port area. Developed in 1946, industrial park Presidents Island is just south of the Memphis-Arkansas Bridge and has four miles of harbor frontage and 960 acres of industrial land. There are more than 100 businesses operating on Presidents Island, including Cargill Inc., Drexel Chemical Co., Exxon Mobile Corp., GlaxoSmithKline and Ledbetter Foods. Just south of that, the Frank C. Pidgeon Industrial Park has three miles of harbor frontage and 6,800 acres of industrial land.
Within the aerotropolis concept, the river interfaces mostly with the road system. McCrory sits on the Aerotropolis Access and Transportation work group, which is chaired by Julie Ellis, an attorney with Butler, Snow, O’Mara, Stevens & Cannada PLLC. This is one of four work groups for the Memphis Aerotropolis Initiative Steering Committee, which is tasked with overseeing implementation of Aerotropolis initiatives. That’s where you get people sitting together in a planning process, which makes your planning grow in a sustainable way,” McCrory says. “Those improve traffic and could help the delivery and shipment of goods from the port.” John Moore, president and chief executive officer of the Greater Memphis Chamber, says barge traffic is similar to railroads, in that river transport allows companies to ship large volumes of materials and goods at a lower cost than air or road transportation. This can include anything from grains to industrial materials. “It’s much cheaper to add a few barges to a shipment than it is to add more trucks to the road,” Moore says.
Companies like Barnhart Crane & Rigging Co. and Nucor Corp. are in Memphis because of the river, which can save a company thousands of dollars per shipment compared to other modes of transportation, according to Moore. Nucor, a Charlotte, N.C.-based steel manufacturer, has a property that touches Frank C. Pidgeon Industrial Harbor.It’s one of the main reasons it located here, according to general manager Thad Solomon, as bargeload quantities are a good way to move raw materials to a steel mill. Nucor spent more than $800,000 in 2007 to open up the harbor. Its port operations are a mix of barges, cranes and trucks working together take materials on and off the river. The company plans to eventually move 50% of its inbound steel scrap, pig iron, direct-reduced iron and maybe steelmaking alloys by the river, which would mean 500,000 tons per year when at capacity. The company has had some issues with silt accumulating at the harbor, but is working with port officials on short- and long-term resolutions, such as annual dredging. In the meantime, it has been using other ports in and around Memphis. When it gets past its siltation issues, Solomon expects the harbor to be a big factor in Nucor’s Memphis success. “As we grow, our need for the river will grow with us,” he says. “We’ve got to get and maintain access to the river over the long haul. It’s one of the reasons we located here and it’s a competitive advantage, not only for Nucor, but for the Memphis area.” Solomon anticipates more orders will bring the mill to full capacity by the end of 2010. This would mean more than 300 employees and 850,000 tons of steel production annually.
The Mississippi River is good for more than just getting raw materials to the mill. Nucor is currently shipping finished products down the river. These goods have eventually made it to Mexico, India and Europe. “As a facility with global reach, that’s another important aspect of our business,” Solomon says. The Mississippi River allows product to go to and from the three economic centers of the world: North America, Central Europe and Southeast Asia. The river, while not the fastest mode of transportation in the aerotropolis arsenal, at least gives companies another option which many cities don’t have. “You can access rail which traverses the United States or you can go not too far from your front door and get to all of this barge capability,” Moore says.
Nucor Corp.
Steel manufacturer
HQ: Charlotte, N.C.
President: Daniel R. DiMicco
Employees: 20,400
2009 revenue: $11.1 billion
NYSE: NUE
Local address: 3601 Paul R. Lowry Road