Local companies target business with Internet retailer

Local companies target business with Internet retailer

December 3rd, 2010 by Mike Pare in News

Staff Photos Chattanooga area transportation companies, like U.S. Xpress and Covenant Transportation, are high on prospects to bloster business ties with Amazon.com as the online retailer finalizes two new major distribution centers in Hamilton and Bradley counties.

Chattanooga transportation companies say they're high on the prospects of bolstering business ties with Amazon.com as the online retailer finalizes two new major distribution centers in Hamilton and Bradley counties.

City-based truckers U.S. Xpress Enterprises and Covenant Transportation Group already do business with Amazon and officials at the trucking companies see chances to rack up more.

In addition, local third-party logistics company Access America Transport is talking with Amazon, hoping to add the Seattle-based giant to its client list.

"When one of the most progressive companies in the world chooses to make an investment in our backyard, existing Chattanooga businesses stand to gain," said Ted Alling, Access America's chief executive.

Amazon wants to build a pair of 1 million-square-foot distribution centers to serve the region if it can complete negotiations with state and local officials. The company is projecting more than 1,400 full-time workers and potentially more than 2,000 part-time or seasonal employees at the facilities, officials have said.

Jeff Wardeberg, U.S. Xpress' chief operating officer, said there's "no question" a business opportunity exists for the nation's third-largest privately-owned truckload carrier.

He said the company started doing business with Amazon earlier this year, and the retailer has jumped into U.S. Xpress' top 100 customers list.

"It could turn out to be a significant piece of business," Wardeberg said, and could lead to the addition of drivers to U.S. Xpress' work force.

Mark Pare, Covenant's senior vice president of sales and marketing, said it has done business with Amazon for three or four years.

"They're a very large customer," he said.

Covenant operates more than 3,600 tractors and 9,500 trailers, and having a company like Amazon "a few miles down the road would be hugely advantageous to us," Pare said.

J.Ed. Marston, the Chattanooga Area Chamber of Commerce's vice president of marketing, said that, because the proposed Amazon project was confidential until earlier this week, the business group hasn't had a chance to talk with local firms about the retail giant.

"Local companies already with ties are in good position," he said.

Marston said Amazon also will need an array of support services for its Chattanooga and Bradley operations.

"We'll encourage them to use as many local providers as possible," he said.

Access American's Alling said landing Amazon would raise Chattanooga's profile across the country.

"And that can only benefit companies like Access that we've started in Chattanooga but do business across the country," said Alling.

Jenny Robertson of FedEx said she couldn't speculate on how new distribution centers might affect its business in Chattanooga. But, she said, anytime there's growth for its customers, it's a possibility the Memphis-based shipper can benefit.

FedEx already employs a few hundred people in Chattanooga.

Atlanta-based UPS spokeswoman Laurie Mallis said that, when its customers are growing and expanding their businesses, "we hope they will continue to count on UPS for logistics expertise."

UPS already has sizable operations in Chattanooga.

Amazon would invest about $164 million in the two facilities, officials said. The Bradley site would be placed at Interstate 75 and Lauderdale Memorial Highway, while the Chattanooga location is at Enterprise South industrial park, where Volkswagen is building its auto assembly plant.

"Nothing makes a stronger statement about our local economy," Alling said, than landing VW and potentially Amazon.