With a population of one million and a land area of 295 square miles, the Memphis metropolitan area is the largest in the state and the central one between St. Louis and New Orleans, Atlanta and Dallas. As such, its businesses draw from a wide trade area encompassing east Arkansas, north Mississippi and west Tennessee known as the Middle South.
It is the 18th largest city in the U.S. in terms of population.
Traditionally an agriculturally based economy with a heavy emphasis on the cotton trade, the city diversified its industry through the 1950s and succeeding decades so that several supporting legs were established on which to base its commercial makeup.
Even so, the city remains the home of several agriculturally related trade associations, such as the National Hardwood Lumber Association and the National Cotton Council. It also is the setting for Agricenter International, the showcase of newly emerging agricultural practices and innovations. Moreover, the cotton brokerage houses which number among the top 100 Memphis-based private companies together bring in over $3 billion in gross revenues annually. Dunavant Enterprises with annual revenues of about $1.4 billion is the largest cotton merchandising firm in the world.
Today, Memphis primarily is associated with its role as a distribution hub, the successful result of an effort beginning in the mid-1970s under the umbrella name of Uniport to emphasize the already active transportation infrastructure, highlighted notably in Federal Express Corporation's operations.
The city now touts its ability to transport over the road and rails goods to at least 65% of the U.S. population (152 metro markets) on an overnight basis. Water, rail, motor carrier and air transport make up the transportation grid of the city which also has a Foreign Trade Zone, allowing goods to be free from duty payment until they leave the zone. In addition, FedEx operates a third-party PartsBank in the city, allowing clients involved in time-based competition to ship and receive articles on demand via electronic data interchange (EDI).
The new Center for Cycle Time Research at the University of Memphis, which is a logistics thinktank, augments the leading-edge status of Memphis in this field.
Memphis Uniport Association is dedicated to advancing the distribution and transportation components of the city and two professional groups in that field, the Council of Logistics Management - Memphis Roundtable and the American Production and Inventory Control Society also have active memberships.
Northwest Airlines operates its southern hub at Memphis International Airport, where it has about 100 scheduled daily departures and flights to 62 cities. The airline employs 2,000 in Memphis and derives revenues of more than $200 million annually out of its operations in the city. Through a joint operating agreement with KLM, it began direct, non-stop Memphis-to-Amsterdam flights on June 27, 1995. This new service is seeing more than 4,000 originating passengers leave Memphis International on a monthly basis.
Now operating on a four-day-per-week schedule, it will advance to daily flights beginning the summer of 1996.
Other major passenger airlines operating at Memphis International Airport are American, Delta, United, and USAir. The five major airlines board an average of 240,000 passengers monthly with five regional commuter airlines pulling in another 50,000 each month. Visual flight rules are in effect 88% of the time and weather is above the published instrument approach minimum over 95% of the time.
The airport is also home to an international clearance module for FedEx. The package and document expediter has invested more than $400 million in its overall Memphis facility over the years. The company has built a $36 million jet maintenance facility in Memphis that employs some 250 technical employees.
Federal Express now serves 201 countries and 325 airports worldwide. It sports an aircraft fleet numbering 489 and handles an average of 2.4 million documents and packages daily.
FedEx now has a 35.6% domestic air revenue share for expedited cargo, according to The Colography Group, Inc. That overall market is valued at $20.4 billion. It also carries 16.2% of export air revenue share out of a total market of $6.2 billion.
The company now has four construction projects underway at its SuperHub. These include an expansion that doubles the size of the freight processing area, a new three-story building to house sorting for small packages, quarters for its new First Overnight services that promise delivery by 8:30 a.m., a bulk truck input facility, and additonal aircraft parking.
FedEx occupies 2.4 million square feet in Memphis. It can sort 160,000 boxes per hour and 325,000 documents per hour.
Technology Service Solutions (TSS) of Valley Forge, Pa., a joint venture of IBM and Eastman Kodak Co., plans to build a national computer maintenance and repair station in Memphis and FedEx Logistics Services will coordinate shipments. One of FedEx Logistics Services' largest clients is National Semiconductor.
In 1992, Memphis International Airport became the world's busiest cargo airport, a distinction it has held. It tops the Airports Council International annual list by moving 1.4 metric tons of cargo per year. Tonnage handled in Memphis has increased while cargo at other busy airports either has grown slowly or dropped. It tops Frankfurt Main, Tokyo Narita and New York's JFK in this regard.
Construction is well underway on a new $107 million, 9,000-foot third parallel runway at the airport. Completion is set for 1996.
A number of Class I trunk railroad lines serve the city and intermodal ramps adjoin several. These include Burlington Northern, CSX, IC, Kansas City Southern Railway, Norfolk Southern and Union Pacific. Class I railroads account for some 93% of the rail industry's freight traffic.
Union Pacific and Southern Pacific are planning a merger, pending government approval. Burlington Northern and Santa Fe merged operations in 1995. The UP-SP merger would bring service improvements to Memphis shippers, especially to those who go West. It would replace Southern Pacific and Union Pacific's relatively circuitous routes between Memphis and Los Angeles to the shortest, fastest single-line route between the two cities, according to merger application docments on behalf of the railroads.
The city has four double-stack trains operating to California, Seattle and Portland. Its rail carriers' piggyback runs can reach L.A. in 52 hours.
Two interstates, I-55 and I-40, crisscross the city where some 200 common carriers operate.
About two-dozen air freight companies have offices in the city, as well as several steamship lines.
Barge lines operate out of the Port of Memphis along the Mississippi River, where about 12 million tons of cargo move through its terminals yearly. The port has over 40 docks and is the second largest inland port on the Mississippi River and the fourth largest inland port in the U.S. Located on the lock-free lower Mississippi River, its facilities are open year-round.
The port facility consists of five public terminals with 11 berths. Several terminals have cranes available in the 100-300 ton class.
International Shipholding Corp. and Cooper/T. Smith Stevedoring of New Orleans under the name of LITCO have built an all-weather barge terminal at Rivergate Terminal near Presidents Island. The new rapid-cargo transfer facility in Rivergate Industrial Port provides 287,000 square feet of enclosed warehouse space and is the largest fully enclosed barge warehouse in the nation's midcontinent.
The Memphis-Shelby County Port Commission likens LITCO to the FedEx of the inland waterway business.
Rail tracks for loading and unloading railcars and multiple covered bays for 30-by-60 lash barges are part of the complex, as is a 500-ton barge crane. The seven railcar-capacity lash barges are loaded under roof, placed in the river by the giant crane and towed to New Orleans where they are loaded on a vessel with a capacity of 83 to 89 barges. Transit time from Memphis to Rotterdam or Antwerp is 22 days.
LITCO is programmed for at least 450,000 tons annually.
In the field of telecommunications, the city originates and receives more 800-number calls than any other city in the South. Several customer call service centers have located in the city recently.
Christian Brothers University is taking a leading position in telecommunications research.
The Memphis/Mid South Economic Development Center is set to open in early 1996 at Memphis International Airport. It will provide a central location for prospects to access information about the Mid-South. It also will become a telecommunications center site that will allow chats with the governor or state economic development officials.
The University of Memphis (formerly Memphis State University) sports a new $25 million library with 210 workstations. Its on-line catalog documents not only its holdings, but also those of other area colleges and the public library. Its new information system provided by Data Research Associates in St. Louis also ties into other databases.
South Central Bell has installed miles of fiber optic cable in Memphis. During this decade, ISDN, or Integrated Services Digital Network, is being phased in, allowing simultaneous use of a single telephone line for voice, data or facsimile transmissions. In the final phase, broad-band services will increase capacity for voice, data, and video and make digital tones available.
AT&T has invested $20 million in its fiber optics switching system on Court Avenue and MCI Telecommunications has a $4 million switching center near the Fairgrounds.
Fiber optic line services also have installed computerized services that detect cuts in fiber optic cables and reroute transmission via other routes. If a lane becomes blocked, traffic can be detoured. It has the ability to restore tens of thousands of telephone and data connections in minutes, instead of hours.
Some other national corporations with major operations in the city include Fleming Cos., Dover, National Safety Associates (NSA), Guardsmark, Sharp Manufacturing, Kraft, Cargill, TBC Corp., Buckman Laboratories, Kimberly-Clark, M.S. Carriers, Promus Cos., Schering Plough, Procter & Gamble, Ralston Purina and International Paper, most of which individually employ over 1,000 locally. IP moved its operations headquarters to Memphis in 1987. Promus, also based in Memphis, is the parent of Embassy Suites, Hampton Inns, Homewood Suites and Harrah's.
In 1992, the Embassy Suites division relocated its divisional headquarters from Irving Texas, to Memphis. Soon afterward, Sedgwick James Inc., the U.S. subsidiary of the Sedgwick Group PLC of London, announced it would transfer administrative staffers to Memphis to consolidate the insurance company's headquarters in Memphis.
Thomas & Betts of New Jersey and ContiCotton USA of California have been recent examples of headquarters office moves to the city.
During 1996, Mueller Industries will move its headquarters from Wichita, Kan. to Memphis.
Over a dozen public companies are headquartered in Memphis, ranging from three major banks to a regional investment brokerage house (Morgan Keegan) to a system for replacing underground pipes without need of excavation (Insituform).
The national public companies with the largest Memphis-area operations together employ about 60,000.
In the private-company sector, Dunavant Enterprises leads the pack.
Several private companies based in Memphis in recent years have gone public - Danek Group, Catherines, AutoZone, Varsity Spirit Corp. (Universal Cheerleaders Association), Fred's, Inc., and Arcadian Corp.
Over 100 of the private companies operating in Memphis each generate gross revenues exceeding $20 million annually - the top 26 bring in $100 million or more. The 100 largest private companies together employ 26,000 and have collective revenues of over $10 billion.
Hospitals alone, figured separately from the top 100 private companies, employ 24,000 in Memphis. Among the larger ones are Baptist Memorial Hospital, Methodist Hospital, St. Jude Children's Research Hospital, St. Francis Hospital, Le Bonheur Children's Medical Center, and the Regional Medical Center at Memphis.
The healthcare industry translates to about $5 billion annually to the Memphis economy, about $1.1 billion of that in salaries alone. About one out of nine jobs in Shelby County either are in healthcare or related businesses.
Baptist Memorial Hospital is the nation's largest private hospital and is the third largest of all hospitals in the U.S. It has a staff of about 6,000.
The University of Tennessee has the main campus of its medical school in midtown Memphis.
The city's two primary health care research institutions - St. Jude and UT-Memphis, together bring in more than $62 million a year in federal research funds. Nearly 70% of that money is used to pay salaries of about 250 investigators and several thousand support personnel who are involved in nearly 400 funded projects.
Methodist Health Systems and Semmes-Murphey Clinic recently developed a not-for-profit teaching and research laboratory in midtown. The joint-venture laboratory will be called the Medical Education and Research Institute and will be dedicated to conducting research on anatomic specimens and to education about surgical techniques.
The national Organ Transplant Fund Inc. also has its headquarters in the city.
The Memphis City School system is the 15th largest in the U.S. with 157 schools and 106,000 students and 6,000 teachers. The system employs 12,000 overall. The Shelby County school system is composed of 39 schools and 42,000 students. It has about 2,150 teachers and employs 3,000 overall.
More than 70 private schools offer elementary and secondary education and are attended by some 18,000, which roughly corresponds to 10% of the student population. Most are religious-affiliated.
Two-year institutions include Shelby State Community College and State Technical Institute at Memphis. Four-year programs are offered at the University of Memphis - the largest with about 20,000 enrolled - Rhodes College, Christian Brothers University, LeMoyne-Owen College and Memphis College of Art.
The city has a Moody bond rating of Aa and an S&P bond rating of AA.
Money magazine has ranked the city No. 12 out of the 100 largest U.S. metro areas in terms of the property tax burden (No.1=lowest). Taxes were 1.07% of home value (the metro area average was 1.49%). Tennessee ranks No. 5 out of 50 states in terms of total tax burden (No. 1=lowest).
Large, recent construction projects include the $62 million, 20,500-seat Pyramid sports and entertainment arena downtown and the $56 million David Taylor Naval Research Center, a large cavitation channel on Presidents Island used to test ship and submarine models.
The city's major Medical Center institutions are involved in capital improvements totaling over $200 million.
Memphis Naval Air Station at Millington employs about 12,000, most of whom are in technical training. It is among the realignment bases and is exchanging its outgoing current base training command contingent for the incoming Bureau of Naval Personnel.
Forty-two industrial sites have been inventoried by the Memphis Area Chamber of Commerce, all of which are 50 acres and above and are served by Memphis Light Gas and Water. The largest tract is the 5,000-acre Frank C. Pidgeon Industrial Park south of downtown and adjacent to the Mississippi River, the same one where Birmingham Steel is building its plant.
Over 1,000 manufacturing plants are found in the city, collectively employing about 51,000 and paying an average annual wage of over $28,000.
Through the Memphis and Shelby County Office of Planning and Development (OPD), the chamber and MLGW can assemble what is called a One Stop Shop when serious prospects want to investigate the city and its environs as a business site. Around one table, representatives from government, the utilities, the chamber, tax assessor's office, licensing and planning departments field questions. At least two dozen of these are called per year.
In office real estate, the largest concentration of office space is found in the east submarket, also the location of most of the newest buildings. This submarket has 8.5 million square feet in its inventory, which is 45% of the overall. The downtown/midtown submarket, which includes the central business district and medical center, contains the second largest concentration with 36%.
Between 1980 and 1990, the office market in the city doubled. It now amounts to about 20 million square feet.
A worldwide office market study by Colliers International of Boston places Memphis among cities at the lowest effective rental rate averages, some 18 times less expensive than Tokyo.
A development which doesn't affect absorption of office space, but generates new jobs is Ducks Unlimited Inc.'s relocation of its headquarters from the Chicago suburbs into a 100,000-square-foot build-to-suit complex at Agricenter International. The $7 million center now houses the wetlands and waterfowl conservation association's administrative and support operations, together employing about 200. Considerations in the relocation decision included being in the Central Time Zone, and a review of labor force, operational costs and transportation requirements.
The average daily commute for employees to citywide work destinations amounts to about 21 minutes.
The median sales price for homes in the Memphis area is around $88,000.
Newly constructed office buildings include a medical specialty building in Humphreys Center and a regional facility for the U.S. Postal Service about three blocks to the north. Union Planters National Bank has built a new neoclassical styled headquarters on the East Poplar Corridor. AutoZone has completed a new highrise national headquarters downtown next to the site of Peabody Place.
Chi Omega and Kappa Delta sororities both have moved their national headquarters to Southwind, setting for a PGA golf course (home of the FedEx/St. Jude Classic), residential and business components. Southwind also is the home of the Pi Kappa Alpha fraternity national heaquarters.
In the retail sector, about 25 shopping centers have dimensions of over 150,000 square feet. A half-dozen enclosed regional malls dot the city. Another regional mall to be called Wolfchase Galleria is being built near Germantown Parkway and U.S. Highway 64.
Retail sales for the Memphis MSA are around $10 billion annually, growing at a rate of almost $1 billion per year. The figures today are twice what they were as recently as 1982.
Total domestic deposits in Memphis banks are about $14 billion.
Unemployment in the city is around 5%.
The industrial segment of real estate remains the city's strongest suit currently, particularly in the warehouse, light industrial and service-oriented subgroups. Memphis is one of the most dynamic markets in the country for this root property type, boasting some 100 million square feet of distribution space, including cotton warehouses.
Recent industrial and distribution-related relocations into the Memphis area and expansions of existing businesses include ones by: Birmingham Steel Corp., Toshiba America Information Systems, Inc. (Electronic Imaging Division), Caroline Records, Technicolor Video Services Inc., Cleo division of Gibson Greetings, Williams Sonoma, Nike, Sharp, Carrier Corp., Sears, Daisytek, Arcadian Corp., Disney Stores, Mazda, Lotus, Inc., Volvo GM Heavy Truck Corp. dba White GMC/Volvo, Avery Dennison, Catherine's, McKesson Corp., Fleming Industries, Reebok, Kumho USA, Inc., R.R. Donnelley & Sons, Complex Plastics, Anixter Inc., Starter Corp., Logistics Management, Inc., Gates/FA, Thomas & Betts, Asics Tiger, Pfizer, Inc., O-Z Gedney division of General Signal Corp., Herbalife, Only One Dollar, Canon Computer Systems, Consolidated Freightways, WESCO division of Westinghouse, American Electric, Family Dollar Stores, Inc., Parker Hannafin, Creative Computers, Melamine Chemicals, MCA (now UNI Distribution), Protein Technologies Corp., Staton Wholesale, Philips Medical Systems, Fisher-Price, Kellogg, Arrow Electronics, Sani-Med, Inc., Brother Industries, Ingram Micro, Consolidation Services Inc. (CSI), Troll Associates, Intelligent Electronics, ICI Acrylics, Overnite Transportation Co., Friden Alcatel, R Squared Scan Systems, Inc., Coors, Fleischmann's Yeast and Square D Corp., among others.
14 selected businesses in a recent 12-month period collectively absorbed some 4 million square feet of industrial space and developers currently are building a sizable amount of speculative warehouse space.
Memphis recently has seen a clustering of athletic equipment and computer parts distribution in particular. Computer equipment companies constitute a current wave of interest and activity. The city already is home to national headquarters of four auto aftermarket parts distributors: TBC Corp., AutoZone, Ezon Products and Parts Industries.
Electricity is supplied by Memphis Light Gas & Water Division by the Tennessee Valley Authority under a distributor contract.
Another major development in terms of construction is the intra-city relocation and doubling in size of the IRS service center into a $106 million, five-building campus of 1 million square feet now completed at Holmes and Getwell in Southeast Memphis. It will employ about 4,600.
The Memphis Area Chamber of Commerce has established several task forces to zero in on certain industries, such as telecommunications, printing and publishing, healthcare, customer call service centers, mail-order houses, and food processing. In addition, MLGW has developed a local cross-match program to inform vendors and sellers of industry-specific products and services.
Within a 15-square-mile part of north Memphis is an Enterprise Zone, offering new companies the potential of an excise tax reimbursement on the purchase of industrial equipment and job creation tax credits, among other incentives.
Much of the newest industrial development in Memphis and Shelby County is seen in the southeast section and also along the emerging I-40 corridor northeast of the city limits. The airport area and southeast Memphis are seen as established industrial and warehousing markets and the I-40 vicinity as a newly emerging one.
Manufacturing in the city was bolstered by Coors' investment of $110 million retrofitting the former Stroh Brewing Co. plant.
The heritage is here for products that now have household names around the country, such as Coppertone, Holiday Inns, Dr. Scholl's and others.
The entertainment field has been well represented in Memphis, bringing performers such as Otis Redding, Sam and Dave, Elvis, Jerry Lee Lewis, Booker T & the MGs, B.B. King, Isaac Hayes, Carl Perkins, the Box Tops, Larry Raspberry, Wilson Pickett, the Bar-Kays, Rufus Thomas, Charlie Rich, Willie Mitchell, Al Green and others to prominence. B.B. King and Willie Mitchell individually own music club/restaurants on Beale Street.
Hard Rock Cafe founder Isaac Tigrett tentatively plans to establish the Memphis House of Blues recording studio at 904 Rayner with discs to be distributed by BMG.
The city is the setting for the filming of several motion pictures, most recently, "The Firm" and "The Client," both based on best-selling novels by author John Grisham.
In sports, Memphis is the site of the annual Kroger/St. Jude International indoor tennis tournament at the Racquet Club of Memphis, the Liberty Bowl at the Fairgrounds stadium of 63,000 seats, and the Federal Express/St. Jude Golf Classic at Southwind. The golf course is one of about two dozen courses in the immediate Memphis area.
The city also salutes a different nation each year during the Memphis in May International Festival. 1996 will see the return of representatives from all previously featured nations for an anniversary reunion.
Additional attractions include: Beale Street, Mud Island, the Wonders International Cultural Series, the Pyramid, Memphis Queen Line, National Ornamental Metal Museum, Memphis Botanic Garden, the riverfront, the Memphis Belle B-17, Overton Square, Dixon Gallery and Gardens, Memphis Brooks Museum of Art, the Rendezvous, Chucalissa Archeological Museum, Sun Studio, Memphis Zoo and Aquarium, Mid-South Fair, Graceland, Memphis Pink Palace Museum and Planetarium, the National Civil Rights Museum, Lichterman Nature Center, Cordova Cellars and vineyard, Carnival Memphis, the Children's Museum of Memphis, the Downtown Mall trolley, Memphis International Motorsports Park, the FedEx hub, Libertyland, Victorian Village, the Orpheum theater, and other sights.
Some 692,000 visit Graceland each year, on the average.
The city sports about 13,000 hotel rooms. Occupancy rates run at about 70% citywide.
[January 1996 second update for month]
Business phone and voicemail: (901) 523-1000, ext. 627
Business facsimile: (901) 526-5240
E-mail: davidy@mem.net
Residential phone: (901) 683-3587
David Yawn is senior staff writer at Memphis Business Journal, where he has worked for 10 years. He now covers international business, real estate, small business and distribution. He is listed in Who's Who in the South and Southwest.
Yawn has written for six national magazines, four outside newspapers, a wire service and has edited for a book publisher of non-fiction works.
He also is author of the study, "International Investment Potential in Memphis."