Kentucky has made a name for itself with its distribution and logistics strength.
UPS Worldport in Louisville, DHL and the addition of the Amazon Air Hub in Northern Kentucky serve as reminders that the commonwealth is perfectly positioned to ship products around the globe.
But the commonwealth is also home to a growing number of third-party logistics providers. And leaders at Team Kentucky know that treating a family business like family can go a long way.It brought one California logistics company more than halfway across the country to a new home.
More than 150 logistics facility investments valued at around $2.8 billion have occurred in Kentucky since the Gov. Andy Beshear administration began in December 2019. Among those was a $1.3 million, 20-job investment by Conner Logistics Inc. (CLI) announced in 2021. The company didn’t just open a warehouse — it moved its entire headquarters from California to the Pulaski County town of Somerset.
Company leaders said then that the new Kentucky location would allow better service to customers in the Eastern United States and also help strengthen CLI’s partnerships with major/national logistics providers. CEO Sean Conner said the move has done that and so much more.
“When we got to Kentucky, we didn’t know exactly which type of customers we would have,” he said in an interview from the company’s original hometown of Fresno, California. That’s where CLI was launched by Conner’s father, Dave, and mother, Debra, in 2002 and where it still operates three warehouses in addition to sites in Somerset and Cleveland, Ohio. Today, the company is working with several large customers from its headquarters in Somerset. Thanks to the presence of several warehouses already developed and ready for occupancy, CLI moved into its first facility in 2023 and opened its second in January 2024.
“Within a week we already filled it up with our customers we currently have,” he said. “The next step is looking to build something three to five years from now.”
The company today has around 120 employees and serves more than 30 locations with e-commerce and shipping of sensitive medical cargoes, among other business.
Three years ago, CLI’s search for a new home grew out of the pandemic that kept everybody home. But the motivation to move had been present for some time. When Conner took over the business in 2015, the company’s leadership team, including his wife, Megan, who serves as CLI’s administrative director, realized they had all their eggs in just a few baskets and needed to diversify their customer base beyond California. They began running lanes to Phoenix and Las Vegas. They also realized there might be greener pastures for their HQ.
“California, in my opinion, is very difficult for operating a business,” Conner said “The taxes are very high. It’s a challenging market to be in as a headquarters. My family for the last 10 years or so had been interested in moving somewhere, but could never do it. Covid happened and it forced us to blow our management team apart, all working in different remote locations. We realized quickly we can actually do this. In some ways, Covid was detrimental to us and made it financially difficult for a time, but the result was making us realize we could do remote work.”
The team spent about six months researching states like Texas, Tennessee, Idaho, Montana and Florida. Many of those locations have appeal, Conner says, from a logistics standpoint.
The Conners didn’t know much about Kentucky beyond its reputation for good bourbon and horses. They researched business costs and the cost of living. They knew the commonwealth was in the perfect location to deliver products throughout the Eastern United States. And they also noticed the significant number of manufacturers located in the state, from globally recognized companies to small local operations. In their line of work, there’s one thing they know manufacturers need: someone to move their products.
“There is an open door to meet with leadership in Kentucky and to actually be heard when you go and talk to them.”
— Sean Conner, CEO, Conner Logistics Inc.
Known as the capital of Lake Cumberland, Somerset made sense for the Conners from a logistics and personal perspective.
“It’s located within an 11-hour drive — the maximum DOT drive time — of 50% of the country,” Conner said. “It’s literally in the sweet spot. You can get to [places such as] Chicago, Birmingham and Atlanta without having to do a layover. That was a huge plus.”
When Megan Conner inquired about local schools, she was referred to Chris Girdler, president and CEO of the Somerset-Pulaski Economic Development Authority.
“Mayor Alan Keck got involved as well,” Conner said, “and they invited us to come take a tour of the city and gave us a synopsis of what their vision for the area was.”
For a Californian, it was “mind boggling,” he said. “In Kentucky, they were very excited about us as a company. There is an open door to meet with leadership in Kentucky and to actually be heard when you go and talk to them. We were really blown away.”
Further research about the community only bore out the good feelings.
“They all were going in the same direction, looking to improve and bring in business,” Conner said. They quickly decided to make the change, beginning with Sean and Megan, followed by both sets of their parents, siblings, their spouses and their parents and one of the company’s top managers.
“We are humbled the Conner Logistics family chose Somerset not only for the company’s headquarters, but also as their personal home,” Mayor Keck said when the project was announced. “It’s evident they did so because of the exceptional change we’re seeing here, change that wouldn’t have been possible without the collaborative effort of our team in the last two and a half years to make Somerset a place people truly want to live and work.”
A 15-year incentive agreement under the Kentucky Business Investment program was approved three years ago by the Kentucky Economic Development Finance Authority (KEDFA), with further training incentives available too. Conner said the incentives have proved invaluable.
“It sold us on the state because they also wanted us to be a part of the community there. I met Governor Beshear several times. The whole way we were treated coming into the state, from top to bottom, Kentucky does an amazing job of looking at a company and wanting them to come into the community.”
Making a home in Kentucky is helping that endeavor. The quality of life in Somerset isn’t bad either.
“We saw how beautiful Kentucky is,” Conner said. “Even if not for business, I would retire here.”
An Industry on the Move
Estimates from the 2022 Economic Census released by the U.S. Census Bureau in January 2024 say the nation’s transportation and warehousing sector saw the largest percent increase in the number of establishments between 2017 and 2022, up by 24.2% (an increase of 57,000 establishments) over this period.
Kentucky has been doing its part to sustain that increase. Analysis of more than three dozen major logistics facility investments that qualified for Site Selection magazine’s Conway Projects Database in 2023 turns up a few trends, patterns and indicators:
The 28 projects for which job creation data were available account for nearly 2,740 positions — close to 30% of the total logistics jobs created since the Beshear administration began.
The three metro areas of Kentucky’s Golden Triangle account for 33 projects, led by Greater Louisville (17) then Northern Kentucky (10) and Lexington (6).
The total projects are almost an even split between new facilities and expansions by existing businesses.
Some project highlights:
Kentucky is home to more than 600 logistics and distribution companies, which employ more than 91,000 people across the state.
Contributing to those growing numbers, UPS Supply Chain Solutions in November 2023 cut the ribbon on a new state-of-the-art Velocity facility in Bullitt County, just south of Louisville. The project is creating 500 new high-quality distribution and logistics jobs with a $79 million investment using intelligent automation, machine learning and A.I. to streamline fulfillment operations.
Third-party logistics company Castellini Co., founded in Cincinnati in 1896, in April 2023 announced it would expand its facility in Wilder in Northern Kentucky’s Campbell County with an investment of nearly $16.6 million, creating 128 new jobs. The expansion includes the addition of a major freezer facility to serve the company’s food clients and will also allow the company to begin assembling meal kits.
“We have more than 50 food and flavoring companies located in Boone, Campbell and Kenton counties with hundreds more in the Cincinnati region,” said BE NKY Growth Partnership President & CEO Lee Crume. “As food manufacturers innovate with changes in consumer behavior, we are working diligently to retain and attract them to Northern Kentucky.”
HVAC Distributing LLC, a national wholesale distributor of heating and air conditioning equipment, in August 2023 announced plans to expand its Graves County operations for a second time with a $5.35 million investment creating 40 full-time jobs. The expansion at Hickory Industrial Park provides growth space to form the headquarters for MRCOOL as well as provide space for its recent launch, MRCOOL Franchising LLC. The company’s second operation at the park was originally announced in August 2020 with a $7 million, 175-job pledge.
“I’m so proud we’ve made a big impact in our community and across the country with what’s really a simple idea: HVAC should be accessible and affordable for everybody,” said Jason Ingram, managing member of HVAC Distributing. “Apparently a lot of people like that idea, because we’ve seen exponential growth year after year, which has required us to expand our operating space significantly beyond what we ever thought we would need.”
Cincinnati-based Total Quality Logistics (TQL), one of the largest freight brokerage and third-party logistics firms in North America, announced in early 2022 its intention to grow in the commonwealth with expansions at three offices across Lexington, Louisville and unincorporated Boone County, resulting in up to 525 new full-time Kentucky-resident jobs (300 of them in Lexington). That pushed the company’s statewide employment to well over 1,000 people.
From global names to small family businesses, Kentucky is proving to be a perfect fit for logistics providers of all sizes.
GROWTH OF CVG
FUELS COMPANIES LIKE DHL
In July 2023, DHL announced it would invest $192 million in an expansion of its Americas global hub at the Cincinnati/Northern Kentucky International Airport (CVG) that will include a 305,000s quare-foot aviation maintenance facility with additional space for aircraft components storage, offices, three maintenance parking gates and eight new aircraft gates.
The hangar at one of DHL’s three global superhubs will be built on an additional 50 acres that DHL will lease. DHL has invested more than $250 million since 2015 in hub upgrades. The project will boost the company’s total Kentucky employment to over 3,800. The CVG hub handles shipments bound for the U.S., Canada, Mexico and Latin America, processing approximately 50 million international shipments annually.
In September, DHL eCommerce opened a fully owned 307,000 square-foot distribution center in Hebron, 10 minutes from CVG, where it is combining work from three leased facilities nearby into one $74 million facility that will employ around 400 full- and part-time employees.
The sixth largest cargo airport in North America (12th largest globally), CVG is also the fastest-growing, having achieved 70% growth over the last five years. The airport is home to more than 70 employers, including the Amazon Air Hub, and is set to host more as it pursues developing hundreds of its 7,700 acres for cargo and aviation maintenance and repair operations.
