Alabama poised to grow in the distribution center industry

Aerial shots of McCalla Intermodal facility taken by drone
Above: Aerial shots of McCalla Intermodal facility taken by drone.
A leading site consultant said Alabama is well-positioned to add a number of new distribution centers.
Andy Mace, consulting managing director with Cushman & Wakefield, said all of the key variables needed for distribution exist in Alabama and cities like Birmingham compare favorably to Atlanta and other distribution hubs.
Mace is familiar with Alabama, having worked with Thyssenkrupp’s location to Mobile County and other projects in the state. But he said even he was surprised to learn how well the state stacks up to competitors for distribution center projects.
“The rest of the country doesn’t see Alabama as a distribution center state,” Mace told members of the Economic Development Association of Alabama at its conference this week.
But maybe they should, Mace said, when you consider:
- A trucker can reach 33 percent of the U.S. population within a one-day truck drive from Alabama.
- Within a two-day truck drive, a truck from Alabama can reach 78 percent of the U.S. population.
- Alabama ranks 11th lowest in the nation in total cost to reach the entire U.S. population (based on costs for one truckload).
- In the key comparisons, Birmingham comes out slightly better than Atlanta.
- Alabama has multiple interstates, an expanding state port, five railways and several intermodal facilities.
“Alabama is much more competitive than we would have expected,” Mace said.
Moreover, when you look at global distribution trends, Alabama is well-positioned there, too, Mace said.
The influence of e-commerce
The rise of e-commerce and the fulfillment centers that support the websites has put a premium on land and buildings near intermodal facilities because of the shipping containers that move through them. Alabama has sites near intermodal facilities.
Although e-commerce accounts for only 10 percent of retail sales, 30 percent of the new distribution centers being built are tied to fulfillment centers for e-commerce, Mace said. That’s a growing trend the state should take advantage of, he said.
With the expansion of the Panama Canal, the Southeast could see up to 10 percent growth in shipping. The Port of Mobile is already preparing for that growth and the rest of the state’s infrastructure should also be primed, Mace said.
Container shipping has surpassed pre-recession levels and continues to grow. Changes in trucking laws, fluctuating gas prices and the growth of industries that effectively use container shipping have contributed to the rise.

Norfolk Southern Birmingham Regional Intermodal Facility in McCalla
Mace said the Norfolk Southern Birmingham Regional Intermodal Facility in McCalla is particularly well positioned to attract distribution centers. The facility saw 50 percent growth in 2014 and still has plenty of capacity to add more business, Mace said. There are industrial sites still available in the Jefferson Metropolitan Park-McCalla and other industrial parks not far from the facility.
The Port of Mobile saw a 10 percent increase in shipping container business last year, which is another good sign for intermodal, Mace said.
The Alabama Department of Commerce has identified distribution centers as a targeted industry. Armed with new incentives, the state can, and Mace said should, make a play for more companies to locate or expand distribution in the state.