The Logical Location For Logistics
Why did more than two dozen companies announce more than $860 million in logistics-related facilities in Kentucky in 2024? Perhaps because it’s home to 2,300 miles of Class I railroad track and 1,000 miles of commercially navigable waterways. Or it might be the commonwealth’s six Interstate highways and five commercial airports. Maybe it’s the foreign trade zones in the area that afford companies import and export benefits.
It’s likely a combination of those infrastructure assets. But add proximity to air cargo hubs operated by UPS at Louisville Muhammad Ali International Airport and DHL and Amazon at Cincinnati/Northern Kentucky International Airport (CVG) and Kentucky quickly becomes a logical location for logistics-intensive businesses.
Since 2017, according to the Kentucky Cabinet for Economic Development, the commonwealth has seen nearly 250 new or expanded logistics-related facilities built, worth more than $5.7 billion in capital investment. Combined, they have created more than 18,600 jobs.
Investments in Efficiency
In October, ground broke on a new, LEED-certified aviation maintenance facility DHL Express is building at its Global Hub at CVG. The $292 million investment will result in 300 new jobs.
“Over the last several years, we have been enhancing our network capabilities with newer and more fuel-efficient aircraft, and this new facility complements those efforts with additional space for more aircraft to be maintained at the same time,” said Rob Hyslop, EVP Global Aviation, DHL Express, at the groundbreaking. “This translates into faster turnaround times, making the fleet more efficient to handle a growing volume of shipments.”
In September 2023, DHL eCommerce opened a 307,000-sq.-ft. distribution center in Hebron, Kentucky, near CVG. It’s consolidating three leased properties into the new $74 million distribution center that will employ approximately 400 full and part-time employees.
The Amazon Prime Air Hub in Hebron in Boone County is located at the Cincinnati/Northern Kentucky International Airport. It serves as Amazon’s main logistics hub for air cargo across North America.
All photos courtesy of Kentucky Cabinet for Economic Development
The UPS Worldport at Louisville is one of the largest automated package handling and air freight hubs in the world, at 5.2 million sq. ft. Recent investments include an expanded Global Aviation Training Center and a second 275,000-sq.-ft. hangar.
Clark Beverage Group and Clark Distributing Company (Clark Group) announced in October a nearly $130 million investment to expand and establish a new, 300,000-sq.-ft. corporate headquarters and distribution facility in Bowling Green. It will create 20 new jobs, bringing its employee roster to more than 260 workers. The company cited Warren County’s “strategic location, talented workforce and welcoming business environment” as the criteria for growing in Bowling Green.
Chick-fil-A Supply, a division of the Chick-fil-A restaurant corporation, announced plans in December for a new, $100-million, more-than-270,000-sq.-ft. distribution facility in Elsmere, near CVG airport, that is forecast to create 178 full-time jobs over five years. It will supply approximately 150 Chick-fil-A restaurants in the region.
“Elsmere not only provides access to quality talent, but its unique location will also allow us to receive product by rail — the third distribution center in our network to do so,” said Josh Grote, executive director of Chick-fil-A Supply, in a statement.
Photo of John F. Kennedy Memorial Bridge in Louisville courtesy of Kentucky CED
‘At the Crossroads of Our Nation’s Logistic Network’
In December 2023, TRIP, a national transportation research nonprofit in Washington, D.C., released a report that details current and projected levels of freight movement in the U.S., among other topics. “America’s Rolling Warehouses: Opportunities and Challenges with the Nation’s Freight Delivery System” ranks Kentucky 15th in the nation in the value of freight shipped my all modes in 2022, at $605 billion. Kentucky’s freight system moved 502 million tons of freight that year.
From 2022 to 2050, freight moved annually in Kentucky by trucks is expected to increase 53% by weight and 99% in value (inflation-adjusted dollars), the 11th highest projected increase in the nation, according to a TRIP release. The report also found that 16% of travel on Kentucky’s Interstate highways and 20% of travel on its rural Interstate highways is by combination trucks.
“We are pleased to see the projected growth continue for Kentucky,” said Jennifer Kirchner, executive director of Kentuckians for Better Transportation. “We are a national leader in freight movement because we are at the crossroads of our nation’s logistic network. Being centrally located is an opportunity for us and investment in transportation infrastructure is foundational to our success, as we see with the advancement of the Brent Spence Bridge.”
Opened in November 1963, the Brent Spence Bridge carries Interstates 71 and 75 across the Ohio River between Covington, Kentucky, and Cincinnati, Ohio. A companion bridge is being built to alleviate traffic congestion.
