Monday, June 26, 2006

The Magnetic Pull Of FedEx Is The Most Powerful Business Incentive For Memphis And Shelby County




Would someone in city or county governments please buy copies of the current issue of Fast Company for members of the Memphis and Shelby County Industrial Development Board?

While you are at it, mark the article, “Rise of the Aerotropolis,” which tells of the airport-cities that are being created around the globe. It’s an article of special interest to Memphis as world headquarters for FedEx, the corporation that invented global commerce as we know it.

The article makes some graphic points:

· Over the past 30 years, the value of air cargo has risen 1,395 percent, compared to the GDP’s increase of 154 percent and the value of world trade’s increase of 355 percent.

· Today, 40 percent of the total economic value of all goods in the world and 50 percent of American goods are shipped by air.

· Virtually everything associated with the value-added economy – technology, pharmaceuticals, medical devices – is transported by air.

Airport-cities

The aerotropolis is a new thrust for urban planning in several world cities, notably Asian ones, where rather than banish airports to the outer reaches of cities, airports are moved to the center where cities are built around them. American cities are seen as falling behind in the development of these centers, because of our NIMBY sensitivity and zoning restrictions.

But perhaps, just as FedEx created world commerce, it can create a new future for the area around Memphis International Airport as a competitor for the aerotropolises developing in Tokyo, Hong Kong, Bangkok and Dubai. Rather than becoming a force driving sprawl like it is in these places, perhaps the distinctive U.S. brand of the airport-city could be invented here in Memphis.

According to the article, Memphis already has a rudimentary version of the aerotropolis along with Dallas and Ontario, California, with Denver and Detroit planning developments right now.

Architect of the aerotropolis concept is John Kasarda, a University of North Carolina business professor, who sees it as the logical evolution of globalization writ within a city context. While parts of his crystal ball forecasting into the future conjures up the unfeeling, robotic, gray world captured in so many apocalyptic films where people become mere dispensable cogs in the unrelenting global economic machinery, a uniquely American version of the aerotropolis is not only possible, but preferable to those in far flung parts of the globe.

FedEx

But what does this have with the IDB? Here’s the part that made us think of tax freeze policies.

The article says that “the closest thing to an aerotropolis in America today is Memphis International Airport, home for 25 years to FedEx,” adding that Memphis has led the world for 14 years in a row as the airport with the most air cargo, outdistancing powerhouses like Amsterdam and Tokyo.

Delivering the Memphis Regional Chamber’s sales pitch for it, Fast Company points out the distinct advantages of being located in Memphis where companies have midnight or 1 a.m. drop-off deadlines for FedEx, compared to 9 p.m. on the East Coat and 4 p.m. on the West Coast.

In a nation too often defined by a bi-coastal perspective, Memphis has a competitive advantage unmatched in the world – FedEx’s drop-off deadlines and the extra hours of production given to companies here.

Proximity Matters

Joe Ferreira, FedEx’s managing director of hub-area business development, is quoted in the article as saying that she “routinely juggles the requests of as many as 40 to 50 companies jockeying for space around Memphis and smaller hubs.”

“Proximity matters more and more to them,” she says, and Memphis offers an ideal combination of inexpensive, semiskilled labor, acres of turnkey warehouse space and the junction of three states all fighting for their business.

“But the biggest driver,” Ferreira says,” is the growing urge that when we want something, we want it now. And as soon as one company relocates here or to any of our hubs, the next thing that happens is that three or four of its competitors come calling.”
Fast Company says that “while Memphis might qualify for a proto-aerotropolis, with the FedEx hub providing just enough gravity to keep its customers from spinning out of orbit into Mississippi or Arkansas, few other American cities are even remotely ready to build their own analogues.”

Magnetic FedEx

So, once again, we’re told the obvious: FedEx is the ultimate economic magnet for Memphis. Its gravitational pull attracts smart companies that understand that by locating here, they get a competitive advantage found nowhere else, the competitive advantage of a longer, direct connection with the global economy made possible by the inventors of overnight air cargo delivery.

So, with this unmatchable competitive advantage, the obvious question for the IDB is why is it still handing out tax freezes as if we aren’t good enough to attract business otherwise?

3 comments:

Elect Larry said...
This comment has been removed by a blog administrator.
Anonymous said...

Funny, I read that magazine article yesterday and thought of this blog immediately.

Smart City Consulting said...

Anonymous: Great minds, right?