Commerce at Our Core

Imagine you’re a national distributor of consumer products. You want to build a new distribution center that will get your product to as many people as possible, nationwide, with the least amount of time in a truck on the road. So you draw a big X across a map of America, trying to locate the dead center of a population base 330 million strong.

Where do the lines cross?

Well, the Census Bureau says that as of 2022, you’d want that operation in the Wright County hamlet of Hartville, Missouri, pop. 594. 

Finding the work force to staff a million-square-foot logistics center there might be a bit of a problem, but if you’re smart, you don’t just write the region off: Hartville might not be a one-stoplight town (its main intersection is, in fact, controlled by a 4-way stop sign), but it’s very close to what you’re looking for. Just an hour to the west sits the city of Springfield, the third-largest in Missouri. With Interstate 44 cutting through it, Springfield is part of a Golden Triangle of logistics, with Kansas City and St. Louis positioned at distant angles.

Combined, that three-legged logistics stool will connect your trucks to Interstate 70, which nearly bisects the country from Utah to the nation’s capital; I-35, running from the Rio Grande to the Great Lakes; I-49, headed to the Gulf of Mexico; I-29 to the Canadian border, and I-55 to the massive distribution node of Chicago.

Don’t just take our word for it: Look at the companies that were way ahead of you in identifying Missouri as the bullseye in their distribution targeting plans: Amazon, with multiple, massive fulfillment centers in Kansas City and St. Louis. Or food manufacturer Kraft Heinz, outdoor equipment retailer Bass Pro Shops, pet-food/pharma specialist Chewy or O’Reilly Auto Parts. 

Notice anything in common about those brands? There isn’t much. And that’s the point. This broad diversity of sectors, companies and products speaks volumes about the value proposition of Missouri as a center of logistics excellence. That message resonates loudly with the owners and leadership of companies that operate within that sphere. 

Drill down deeper, though. What underpins that proposition? For starters: 

• In St. Louis and Kansas City, Missouri boasts not one, but two major metropolitan areas within 500 miles of one-third of the nation’s population. That’s one-day trucking access to a consumer base of roughly 110 million people. 

• The two cities rank No. 2 and No. 3 among the largest rail hubs in America, based on the number of freight trains daily. Kansas City, the larger of the two, is also No. 1 nationally when tonnage is the metric, and St. Louis is second. 

• Six Class I rail operators, push freight across the 4,800 miles of track crisscrossing the state, and we’re the central node of the logistics leviathan created in 2021 when Kansas City Southern Railway merged into Canadian Pacific, creating CPKC—the only rail line that has track servicing the entirety of North America.

• The Missouri State Freight Plan estimates that more than half of the state’s economy is affected through the direct movement of freight or the use of freight systems that provide jobs for roughly 83,500 people in the state’s transportation and warehousing sector, as well as related industries.

• The commodity value of products shipped by rail is expected to reach $710 billion by 2030, surging 70 percent from $465 billion in 2011. 

• For all the advantages that rail produces, the strongest link in the distribution value chain is trucking. The commodity value of products traveling over the state’s roads is projected to hit $1.2 trillion by 2030, up 70 percent from its 2011 levels.

• While it historically has been less of a distribution factor, air cargo is the area with the greatest growth prospects by 2030. That’s in part because Missouri has two international airports straddling the state, and they’ll contribute an estimated 142 percent increase in commodity value by 2030.

• Even in the dead center of the nation, water shipping is a thing here: The Missouri River, crossing the entire state from east to west, joins the Mississippi near St. Louis to provide an inland waterway that will see 23 percent growth by 2030, hitting $15 billion in value. Giving Missouri that unusually high profile in logistics—only Texas can boast as many cities in the nation’s Top 10 within that sector—are the powerful markets that have evolved for shipping, distribution and warehousing in Kansas City and St. Louis. 

Kansas City

Those markets, however, are not cookie-cutter images of each other; each has logistics strengths that complement the other and make Missouri the real deal for shipping. But the Show-Me side of the line has plenty to brag about. For one, there’s the presence. 

The influence in shipping freight by rail is supported by sites like Centerpoint-KCS Intermodal Freight Gateway on the former Richards-Gebaur Air Force Base in south Kansas City. Rebranded as the I-49 Industrial Center, it is poised to build out 1,340 acres of rail and industrial space. In addition, the center is on land with multiple developmental designations— as a federal foreign trade zone and Opportunity Zone, as well as a Missouri Enhanced Enterprise Zone. 

Kansas City is also home to Hunt Midwest, operating Subtropolis, a series of caves that form the world’s largest underground warehousing complex. The 1,150-acre site boasts nearly 6.4 million square feet of space. 

That’s among the biggest of the logistics centers on the Missouri side of the metro area, which has six of the market’s 10 biggest facilities. Combined, they have more than 20 million square feet at sites that include Space Center Kansas City (6.8 million sf), Carefree Industrial Park (4.85 million sf), and Lake City Business Center (3.3 million sf), all in Independence; Interstate Underground Warehouse in Kansas City (3.8 million sf) and Northtown Devco (2.8 million sf) in North Kansas City. 

The skies above Kansas City hum with logistics activity, as well. From Kansas City International Airport, more than 237 million pounds of air cargo took wing in 2023—nearly 189,000 tons of it. Most of that came courtesy of FedEx (63 percent of market share) and UPS (33.9 percent). The westward leg of an inland waterway includes the federally designated Port of Kansas City, the departure point for barges headed down the river to St. Louis and beyond.

That’s a considerable load taken off of the rail and highway systems; each barge carries the equivalent of 16 railroad cars, or 70 semi-tractor trailers.  

St. Louis

Once upon a time, it was known as the Gateway to the West. Well, St. Louis today is concrete proof that gate is open in both directions. Located within 500 miles—easily a day’s truck drive—of nearly a third of the U.S. population, the region continues to attract logistics site selectors from all over the country and around the world. 

“A couple of things set St. Louis apart from other competing markets,” says Jon Hinds, director of industrial brokers for the CBRE office there. “First and foremost, our city is located in the center of the country. You can reach major cities like Chicago, Kansas City, Nashville, Memphis and Columbus in less than one day’s drive. Distribution is convenient and efficient via a highway system that affords users east-west and north-south access via I-70, I-55, I-64, I-270/255 and I-44.” The St. Louis market, he says, also offers the northernmost ice-free / lock-free access on the Mississippi River, benefitting barge traffic from the Gulf of Mexico. 

“Aside from its wide selection of transportation modes, the St. Louis region also provides logistics site selectors a variety of economic benefits, including a lower-than-average cost of living, when compared to the U.S. median, and a favorably ranked Business Tax Climate Index (for the state of Missouri),” Hinds said. “It also offers the ninth-lowest business location cost of large U.S. metro areas, according to the St. Louis Regional Chamber.” 

Atop the infrastructure lies a thick blanket of human capital: A robust assortment of 6,800 firms in the region employ more than 90,000 logistics professionals in the wholesale trade, transportation, and warehousing fields. The educational aspects aren’t to be overlooked: four-year institutions there include Washington University and Saint Louis University, both offering supply-chain management degrees at the undergraduate and graduate levels. 

Like its western neighbor, St. Louis can flex the economic muscle of six Class I railroads, a hearty interstate system, plenty of runway (literally) for growth with its air-cargo potential through Lambert International Airport, and, of course, immediate access to the biggest inland waterway in America— the Mississippi River. While Kansas City may enjoy more immediate access to the American West—and thus, to goods brought in via rail from seven major ports that run from Seattle south to Long Beach—St. Louis is oriented to the east and the major population centers there. 

That means shippers there enjoy quick access to Chicago, the biggest shipping zone between New York and Los Angeles. Overall, said Hinds, the region is ideally positioned for logistics success today and well into the future. “Missouri is well suited to attract companies from around the country,” he says. 

“No question, we have an abundant and diverse labor pool, pro-business government(s) and superior geographic amenities. We think there is a tremendous amount of opportunity for growth within the industrial sector. We continue to see net positive growth through organic expansions and businesses choosing St. Louis and Missouri as a place they want to locate.” The macro conditions of the economy largely determine the growth rate of the Industrial real estate market, Hinds says, “but from what we are seeing, I remain extremely bullish on the sector going forward in the foreseeable future.”

Historical Perspectives 

Long before Dwight Eisenhower pressed for an American equivalent to the autobahn, long before the magnates of the 19th century laid down steel rails in the wilderness, nature itself created the first transportation system that settlers used to build a new nation: rivers. 

Waterways were, indeed, the first superhighways of a fledgling country, with flat-bottom boats and rafts ushering hides and other bounty of the land out of the newly explored lands and toward the settlements. Until the invention of the steam engine and paddle wheeler, the going was tough for those headed up-river, but down-river traffic was far more efficient than trying to get heavy loads moved overland. 

In that context, the land that would become Missouri was incredibly blessed and remains so to this day. The Missouri River forms a northwestern border that runs nearly 150 miles from Nebraska City, Neb., before turning east in Kansas City for the 340-mile trek to St. Louis—nearly 500 miles of 18th-century freeway. 

On the eastern side, the Mississippi forms the entire Missouri border with Illinois, Kentucky and Tennessee, a river run of roughly 300 miles. That’s a lot of access. Those early routes would later be traced by rail lines, the first highways, and, finally, the interstates we know today. Those, in turn, have given shape to the industrial real estate markets that are thriving in the two major metro areas.