Setting Our Sights on Bio-Logistics

In the June BioBiz column, I discussed the concept of bio-logistics and Memphis’ need to focus on the “bio” aspects of the equation.  With the world’s busiest cargo airport, FedEx’s World Headquarters, five Class I railroads, daily nonstop flights to Europe and Mexico, the fourth largest inland port in the United States, two major interstate systems (with two more planned), and two foreign trade zones, our city is certainly a leader in logistics.  Now is the time to build upon that strength to become a better leader in bio-logistics.

By emphasizing the “bio”, I am emphasizing all the intricacies associated with transporting packages that are highly sensitive to time, temperature and humidity fluctuations, and that have a high value or may be medically necessary. This is a situation that has not been completely addressed in the Memphis logistics community.

In 2005, the Memphis Bioworks Foundation commissioned a study to gauge the global sales of biomedical products, revealing an estimated $789.2 billon. The total biomedical sales in the United States were $294.1 billion, a number that is expected to grow to $681.8 billion by 2015.  The report also detailed the bio-logistics services in the US and specifically the Memphis region. Bio-logistics services represented an additional market in the U.S. of $13.8 billion, with an expected growth to more than $32 billion by 2015. Air shipping and delivery services are expected to grow nearly twice as fast as the overall bio-logistics market increases its global reach.

The study also revealed that the Memphis MSA had a 3.8 percent market share of national biologistics services. According to the bio-logistics report, increasing our share to 5.6 percent of the national total would have a tremendous economic impact for Memphis.  This would triple revenues from $531 million to $1.7 billion. It also would create more than 16,000 new jobs in the area, which would mean $570 million in new wage and salary payments and a 2.1 percent increase in employment.

As our bioscience industry capabilities grow, our bio-logistics services will be a vital part of attracting new biotechnology companies to the region. Success will mean more than just the ability to quickly and efficiently ship packages from Memphis to points around the world.  Additional investments in shipping technology will be necessary as well.  Bioscience companies will need access to cold-storage facilities and cold chain logistics; tracking capabilities such as RFID (Radio-Frequency Identification), GPS (Global Positioning System), and EPC (Electronic Product Code); and heightened security measures as a greater incentive to relocate or expand their facilities to the Memphis region to take advantage of the logistics already in place.

In addition, we need to invest in the research laboratories, storage facilities, medical operations and manufacturing that are involved in the creation and distribution of biotech materials and products. 

The question that remains, however, is “how” do we create this thriving bio-logistics industry?

The answer to that is already being considered. The Memphis Regional Chamber, Memphis Tomorrow, City of Memphis and the Shelby County Government have committed resources under the Memphis Fast Forward economic plan to pull together a business and implementation plan for bio-logistics. A committee is being formed that will clearly inventory Memphis’ assets, then understand what is needed to address the requirements of the industry, create benchmarks, and then determine and prioritize our action steps.

The ultimate goal is to enhance our logistics infrastructure with the tools needed for bio-logistics through the recruitment of existing companies from outside Memphis, the creation of new ones that may be developed as “start-ups” or by augmenting existing companies’ capabilities.

Clearly, bio-logistics is already a large industry, with a strong potential for growth.  Now is the time to take on the task of leveraging our existing strengths into creating the industry for tomorrow so that we become a leading force in the bio-logistics market.

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