Every few months, it seems another company has announced plans to build or expand a distribution or fulfillment center in Ohio.
First it was Macy’s, then Amazon and now Dollar Tree.
Macy’s announced plans in late April to open a distribution center in Columbus dedicated to its new specialty store, Macy’s Backstage. The $14.9 million project will bring more than 400 jobs to the region.
Amazon, meanwhile, announced this month that it will open its sixth Ohio fulfillment center in West Jefferson. The facility, which is scheduled to open by the end of 2019, will create more than 1,500 full-time positions. Amazon has two fulfillment centers in central Ohio and three more in the works – two in northeastern Ohio and one near Cincinnati.
Most recently, Dollar Tree, North America’s leading operator of discount variety stores, announced plans for a $125 million distribution center in Morrow County that will employ 400 people.
Macy’s, Amazon and Dollar Tree join companies like Home Depot, Hayneedle, zulily, Restoration Hardware and McLane Co., which already have significant distribution operations in Ohio. Why do these companies want to put their distribution facilities here, in Ohio? Because Ohio makes it easy to move goods where they need to go.
E-commerce continues to grow, and retailers want to move closer to dense population centers where most of their customers live. Ohio fits the bill, with three major metropolitan areas – Cincinnati, Columbus and Cleveland – as well several smaller metro areas, including Akron, Dayton, Toledo and Youngstown. And it’s within a day’s drive of 60 percent of U.S. and Canadian markets. Ohio’s proximity to customers provides a clear advantage for companies involved in e-commerce and logistics and distribution.
But being close to customers and markets isn’t enough. Companies must be able to deliver their goods to those markets quickly, reliably and cost-effectively.
UPS, DHL, FedEx and the U.S. Postal Service, the nation’s four largest delivery companies, have six distribution and processing centers in Ohio, more than any other state within 600 miles. Access to multiple vendors not only gives companies more outbound shipping options, it also allows them to negotiate for better rates. It’s a huge business advantage for Ohio companies.
Ohio’s integrated transportation infrastructure makes it easy for these shippers to move goods and increase a company’s speed to market. With 6,820 miles of interstate highway on eight major routes, Ohio has the fourth largest interstate system in the country, making truck transport a popular option. There are 13 intermodal facilities across the state that enable the transfer of containers between trucks and rail cars as well as 10 major rail yards. So moving goods via truck and train is easy, too. Shipping via air is also a viable choice thanks to the state’s seven commercial and four cargo airports. The Ohio River and Lake Erie enable maritime transport. In fact, the Port of Cleveland is the only port on the Great Lakes that provides regularly scheduled direct shipping service to Europe, giving companies an economical and efficient way of moving cargo to global markets.
Ohio has even more benefits in addition to multiple shippers and a comprehensive infrastructure. It also offers employees an affordable cost of living and employers a business climate conducive to the success of distribution centers. There is no tax on products sold outside of Ohio, and the state has the second lowest effective tax rate in the country for new distribution centers.
Ohio has one more thing not available in most other states: a collaborative network of retailers, fintech leaders and data centers are helping companies move into the next generation of logistics, or Logistics 4.0, which integrates online activities with the physical distribution of goods and supports high-tech supply chains.
With all these advantages, it’s not surprising that more and more companies, like Macy’s, Amazon and Dollar Tree, are building and expanding distribution and fulfillment centers in Ohio.
If you’re interested in joining these companies in Ohio or simply learning more about Ohio’s logistics and distribution industry, just send me an email and I’ll get in touch with you.