Missouri’s Pioneering Outward Expansion
11 Nov, 2015By: Governor Jeremiah W. (Jay) Nixon
Field notes on Missouri’s transportation and logistics success
In 1804, Lewis and Clark set off from St. Louis, Missouri, on their westward expedition. They were charged with finding a water route to the Pacific Ocean. This was Missouri’s first foray into transportation and logistics, an industry that’s been growing ever since.
In 2010, Missouri Governor Jay Nixon called together a diverse committee including representatives from business, labor, higher education and economic development to develop the Strategic Initiative for Economic Growth, a plan for transforming the state’s economy into a long-term, sustainable, 21st century growth economy. The initiative identified seven key industries that offered the strongest possibilities for job creation and business growth. One of these key industries: transportation and logistics.
Missouri was already home to a large industry presence, including headquarters of five major trucking companies and four third-party logistics companies. The initiative aimed to further build on the state’s industry strengths and increase opportunities for new and existing businesses to grow and succeed in Missouri.
Just two years in, the Strategic Initiative yielded its first major victory for the transportation and logistics industry.
In August 2012, Freightquote, the nation’s largest online freight shipping broker, announced it would build its new, state-of-the-art corporate headquarters in Kansas City. The $44 million, 200,000 square-foot facility would bring 1,350 new jobs to the state in just four years. Freightquote CEO Tim Barton cited Missouri’s attractive workforce, geographic location, highway access and strategic incentives as unique advantages that led to the company’s decision to invest in the Show-Me State.
Missouri’s momentum in the industry hasn’t slowed. Since Freightquote’s announcement, 11 additional transportation and logistics-related companies have announced plans to relocate to or expand in Missouri, investing more than $22 million in Missouri communities and creating almost 600 new jobs.
Most recently, Mid America Logistics announced it would ramp up its hiring in St. Louis, adding more than 120 new employees. Company executive Martin Brading described the region as “one of the best locations in the nation for Mid America's type of logistics business due to a cost-competitive labor market combined with a ready workforce of well-educated, highly trainable young people who are relationship-based, which is a key ingredient in our business.” This Missouri- based company ranked 77th on the 2015 Inc. 5000 list after experiencing growth of 3,918 percent from 2011 to 2014.
The Right Environment
Aided by its central location, Missouri is one of the top states for transportation and logistics; but proximity to market is only half the story. A low-cost, pro-business environment, combined with a vast transportation network and a skilled workforce means Missouri can get products to market faster and cheaper.
Missouri knows business. In fact, for the past five years, Missouri has been ranked a Top 10 Pro-Business State by Pollina Corporate Real Estate. The state offers a low-tax environment, with the fourth-lowest diesel tax, the fifth-lowest gas tax and no inventory tax. In addition, recognizing that economic stability is critical for business success, the state has worked hard to maintain its AAA credit rating for more than 50 years.
Road, river, rail or air, Missouri can get goods where they need to go. The state boasts 130 public airports including two international airports; seven major highways, helping form the sixth-largest road system in the country; access to all six Class I railroad companies, making Missouri a top 10 state for railroad mileage; and with the largest river system in the country, Missouri has 13 public ports and ranks in the top 10 for inland waterway mileage.
The transportation network is certainly impressive, but Missouri’s workforce is its greatest asset. Missouri is home to more than three million highly skilled workers. And the state’s growing population is a point of difference among other central states. In fact, Missouri’s skilled workforce exceeds the entire populations of 20 states, including neighboring states Kansas, Arkansas and Nebraska.
Missouri doesn’t just transport goods from coast to coast, the state also sends transportation-related goods around the world. In fact, in 2014, Missouri’s export sales totaled more than $14 billion, with top export products including chemicals, food and kindred products, machinery and electrical components and transportation equipment. And what better way to get cargo from point A to B than in America’s best-selling van, the Ford Transit, which is assembled in Kansas City, Missouri?
In 2013, the state launched its new Export Missouri initiative, implemented by the Department of Economic Development’s International Trade and Investment Office, to help more Missouri companies find new customers and sell their products in overseas markets. The initiative assists businesses with the cost of participating in international trade shows, trade missions and foreign market sales trips; provides online trade counseling; and created a brand new web-based Missouri product directory for businesses to showcase their goods.
Last year, the U.S. Small Business Administration recognized Missouri as one of the top-performing states participating in the State Trade and Export Grant Program (STEP), a pilot launched in 2010 to help businesses engage in exporting activities.
The state actively seeks to tap new export markets for Missouri businesses. With 96 percent of the world’s consumers living outside the United States, foreign trade represents Missouri businesses’ largest opportunity for growth. Increasing exports has been a central focus of Governor Nixon’s administration and since taking office, Governor Nixon has led successful trade missions to China, Brazil, the Republic of Korea (South Korea), Europe, the Republic of China (Taiwan) and eastern Canada, closing agreements to sell nearly $10 billion in Missouri goods.
Additionally, earlier this year, Missouri First Lady Georganne Nixon led a delegation to Havana, Cuba, to discuss export opportunities. Missouri’s delegation was the first U.S. state to embark on a trade mission to visit Havana since President Barack Obama announced the U.S. was working to normalize diplomatic relations with the country. Combined, these initiatives provide a roadmap of opportunities for those in the Transportation and Logistics business to get in on the action as the demand for Missouri-made products increases.
Keeping in mind that same spirit that launched the nation’s most well-known expansion effort more than 200 years ago, Missouri today continues to implement innovative policies and provide a great location for businesses to launch expansions of their own. With an unparalleled workforce, pro-business environment and global mindset, the Show-Me State is in the fast lane. And with the continued growth and attraction of new and existing transportation and logistics companies, the state’s network of infrastructure and facilities also expands, making business more efficient and cost-effective across every industry.