At one time the Butterfield Overland Mail Trail was the only game in town. It was the main route through Southern Arizona and served as the only channel for goods and information to travel from the West Coast back east. It took roughly 25 days to get a letter from San Francisco to St. Louis.
My how things change. Today there are any number of options to get goods from here to there in Tucson – by road, rail or air. And you can do it in a matter of hours.
Tucson’s transportation and logistics sector is 150 companies strong and employs more than 3,700 people in logistics, transportation, and warehousing.
This region boasts a unique geography that is its greatest asset from a transportation perspective. It’s near the border of Mexico, as well as deep water ports there and in California. Within a 500-mile radius there is a market of 34 million people and within a 1,000 mile radius there are 55 million people.
Interstate 10 gives convenient access to Phoenix and Los Angeles, and east to El Paso. Tucson sits on a Union Pacific rail line and Tucson International Airport boasts one of the most diverse aeronautical bases in the nation. Not many cities have all of these advantages plus the opportunities they present. That’s why transportation/logistics is one of the four target industries in TREO’s economic development blue-print.
Target.com arrived in Tucson with
much fanfare a few years ago. The 1-million-square-foot distribution center located on Tucson’s eastside serves Target.com customers west of the Mississippi and employs approximately 400 permanent, full-time employees.
Tucson fit the bill for Target for several reasons, said Ryan Hanson, general manager of Target.com. “One, we wanted to be on the West Coast,” he said. “Two, we wanted to keep real estate and transportation costs down. And, three, from a speed-to-guest perspective, we’re directly on a major rail line and right off I-10. It’s a quick shot to the Los Angeles market. And for air freight – the airport is only 15 minutes away.”
Hanson said that business is booming at the facility. As the holidays approached, the site employed some 1,000 people. Once the facility is expanded to 1.3 million square feet, that number will swell to 1,200 employees during the peak holiday season.
While the downturn in the economy has affected business, Target.com is doing very well, said Hanson. “We don’t have as much volume as we expected before the recession,” Hanson said, “but it’s coming in nicely. In the next few years, we will likely be over 20 million units and we’re working to go over that.”
He added, “The community has welcomed us in. Target is very happy with Tucson.”
Near the Target.com facility sits the Port of Tucson, another hub in Tucson’s transportation/logistics sector. Port of Tucson offers rail, truck and warehousing options to regional businesses. With five miles of rail infrastructure and 1.6 million square feet of warehouse space on 750 acres, the port is a shipping hub for materials and goods coming from and going to Mexico as well as locations across the United States.
Alan Levin, owner of the Port of Tucson, said that though business is down from pre-2008 levels, “our business in Mexico has remained steady,” he said. “They have a lot of manufacturing plants down there. We have a lot of raw materials going in and finished products coming out.”
Helping business with Mexico is the fact that Port of Tucson is designated as a Foreign Trade Zone. That means lower tariffs are assessed on materials shipped to Mexico as well as on the finished products shipped from Mexico to the U.S.
Still, the economy remains the biggest challenge for the business. “Hopefully the economy will turn around,” Levin said.
Another neighbor of Target.com and Port of Tucson is Arizona Canning, which depends on Tucson’s transportation/logistics advantages to move its product across the nation. The company remains strong despite the current economic challenges.
Brandon Lankhaar, distribution manager, said, “Even with the tightening economy the business has continued to show growth which is always a good sign.”
Arizona Canning is the American arm of La Costeña Foods, one of Mexico’s largest canned-food companies. In 2006 La Costeña Foods bought the former Slim-Fast building (just north of the Target fulfillment center) for its first U.S. manufacturing plant.
Some 90 employees process from 300,000 to 400,000 cans of beans each day. The cans are then shipped to retailers including Costco, Wal-Mart, Safeway, Fry’s and other grocery chains.
This past year, Arizona Canning acquired a new brand of beans called Luck’s, which is mostly distributed in the southeastern United States. To accommodate the additional production, Arizona Canning added 35 new employees. The company has also partnered with Union Pacific Distribution and a local trans-loader to move the majority of the Luck’s product east to keep costs down as freight and fuel prices continue to rise.
Lankhaar said Tucson is a great location for Arizona Canning. “We are fairly centered here for our core markets which are Southern California and Texas,” he said. “Tucson also has a strong manufacturing base which helps us to find operators with good technical skills.”
TREO and its Board of Directors had a big hand in the Target and La Costeña projects. “These were great examples of teamwork in closing these deals,” said Joe Snell, TREO’s president and CEO.
The third transportation asset in the region is the Tucson International Airport – currently home to eight major airlines flying to 15 non-stop destinations daily. In February the airport will add another carrier offering non-stop service.
Yet commercial aviation is just one segment served at the site. It also supports general aviation, regional jets and military aircraft as well as air and ground transportation services.
In the last two years, Tucson Airport Authority has invested millions of dollars in key infrastructure and site prep for future aeronautical industrial development on Aero Park Boulevard and Aeronautical Way. TAA is actively marketing these properties for aerospace and transportation sector development.
TAA is also in the process of updating the master plan for the airport. This effort is focusing on creating an airport city, with TIA becoming an “aerotropolis” composed of international trade, manufacturing, warehousing, technology and transportation industries through strategically developed aeronautical business parks. It will be contained within the airport’s 8,300-acre campus. The master plan will include opportunities for transit and freight-rail development as well as specialty uses like conference centers, office space and lodging.
“We see the future of any city’s economy and success as a function of speed,” said Jordan Feld, director of planning at TAA. Furthermore, the ability to move people and cargo quickly is paramount. He said this is why TIA is focused on providing multi-modal forms of transportation. “We’re making sure we’re providing all the facilities needed to make that happen,” he added.