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Thursday, January 3, 2013

KC is E-commerce Heaven: A Report from KC SmartPort

With the holiday season over, online retailers are still ramping up post-holiday promotions.  Did you ever wonder what goes on behind the scenes? How did that J.Crew sweater get from your computer screen to your niece’s front doorstep in time for Christmas?

The Kansas City region plays a very important role in the e-commerce supply chain – and all of that distribution means big opportunity for a direct economic impact on our community. KC SmartPort leads the marketing and promotion of Kansas City’s opportunities for investment from distribution, warehousing and e-commerce companies. Keep reading for some important insight to help you better understand how your holiday purchases may have a direct benefit on jobs in our KC region.

New Trends

With the introduction of smart-phones and tablets, e-commerce is everywhere. Consumers can access online stores with their wireless devices, whenever and wherever they are. As the largest and most efficient inland port in North America, the Kansas City region offers unique assets for fulfillment and distribution by companies engaged in e-commerce.

The Facts

E-commerce is big business in the U.S. and around the world. It is predicted that U.S. e-commerce sales will reach $254.7 billion by the end of 2013. Global business to consumer e-commerce sales will pass the $1.25 trillion mark by 2013. The total number of Internet users is rising and is expected to reach 3.5 billion in 2013. The number of online shoppers in the United States is forecast to reach more than 150 million people in 2015, with almost 80 percent of US Internet users shopping online.

FedEx and UPS both have multiple distribution centers in the KC area due to the region's central North American location.

E-commerce and logistics

Traditional e-commerce relies on economies of scale by delivering in bulk amounts and focusing on regions that have centralized stores. Disaggregated retailing distribution relies on big box warehouses located outside metropolitan areas to ship large numbers of small parcels to individuals. It requires fulfilling each order from a huge variety of inventories, and sorting them into separate parcels. With disaggregation, parcels are delivered by several different modes of transportation and depend on shipping companies such as UPS, FedEx, and USPS to deliver to individual homes to complete the order.

Most companies have already perfected the online shopping process, now the key is whether companies can fulfill their promises, including delivering the right product in the agreeable time frame to the right customers. Third party logistics (3PL) providers offer a great solution. 3PLs can handle many e-tailers, and have the expertise to handle smaller order fulfillment. By focusing exclusively on fulfillment, 3PLs are able to increase efficiency and accuracy through the use of technology that small e-tailers cannot afford. Also, because 3PLs have more than one client, economies of scale help lower the cost of shipping and warehousing.

The Kansas City Solution

Kansas City is ready for e-commerce. There is plenty of capacity for big box warehouses with a variety of vertical ready sites to choose from. With many intermodal parks available in the region, Kansas City provides a variety of transportation modes to accommodate e-commerce companies. Whether it is from truck to rail, from air to truck or any other combinations, Kansas City has the services to fulfill those needs. Kansas City also has great logistics companies that can help e-commerce companies grow and sustain their businesses. According to Inbound Logistics magazine, 13 of the top 100 3PLs in the U.S. have a presence in the Kansas City region.

Fulfillment center logistics is leading in the industrial market. E-commerce companies need big box fulfillment centers that are usually larger than 500,000-square feet, which can be difficult to find at a reasonable price in larger urban cities. That is why an inland region such as Kansas City presents the perfect solution. As demand increases for big box space, the Kansas City region is well positioned to compete for companies wanting to cut costs and take advantage of multiple modes of transportation in the region.

The KC region offers three-day fulfillment shipping to nearly every U.S. location.

Visit www.KCSmartPort.com to learn more about the supply chain advantages of the Kansas City region. Or get connected with KC SmartPort with LinkedIn

Block Real Estate Services (BRES), has several Class A mixed-use business park locations that are strategically situated near multiple distribution centers, support services.  Click here to view BRES business developments.

Guest Contributing Author:
Chris Gutierrez, President
Kansas City SmartPort, Inc.


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