In a 24-7 society, every minute counts. But do all minutes count the same?
On the Road
In our 24-7 society, every minute counts. But is getting the most out of the evening minutes the most crucial thing? That's what some small companies think as they set up shop near FedEx's superhub in Memphis
When people speak of Memphis as a city that never sleeps, they're probably not referring to late-night jiving on Beale Street. Yes, you can still find a few honky-tonk clubs that rock late into the night in the downtown area that W.C. Handy and other blues notables made famous long ago. Nowadays, however, Beale Street is fairly restrained. It has been officially sanctioned as the Beale Street Historic District. It pipes down by 2 a.m. or so.
No, the real nighttime action in Memphis isn't downtown. It's at the airport. A human wave rolls through the Memphis International Airport in the early evening. Much of the foot traffic is due to the Northwest Airlines hub there. Thousands of Northwest passengers change planes each evening in Memphis. Far more extraordinary, though, is the controlled frenzy later on at the 55-acre colossus that's the airport terminal building of the FedEx Corp. Each weekday night between 10 p.m. and 2 a.m., 162 FedEx planes land in Memphis and take off again. During the four-hour interval, 13,000 workers unload 1.5 million packages from inbound planes; they then sort the packages and reload them onto outbound planes. In FedEx-speak, the terminal is MEMH (for Memphis hub), or, now that the carrier has seven lesser hubs in other U.S. cities, the superhub.
The nocturnal drama that unfolds with military precision at the superhub is well-known and much celebrated (especially by FedEx). Less conspicuous is a related burst of nighttime business activity at other locations in Memphis. Lights blaze late into the evening at all manner of companies: laptop-repair shops, barbecue purveyors, aircraft-parts dealers, and dot-coms hawking everything from prescription drugs to CDs.
For many of those companies the raison d'Être of their Memphis operations is what you might call the "superhub advantage." In Memphis, as in other cities, FedEx begins its daily shipping cycle each morning by dispatching its familiar white trucks with the purple-and-orange logo to collect packages from customers. But Memphis differs from other cities in a critical way. FedEx's deadline for accepting packages that it promises to deliver by 10:30 a.m. the next business day is later in Memphis -- generally, much later. The deadline in New York City is 9:30 p.m. In Atlanta it's 9. Minneapolis has only till 7:30. In Los Angeles the final pickup time is 6:45.
Because FedEx packages originating in Memphis usually ride on one plane rather than two, the last call for pickups in that city is as late as 11:30 p.m. (or even midnight, if customers drop off packages at a FedEx office themselves).
The extra hours translate into a competitive edge for companies savvy enough to exploit it, the city's business leaders say. And over the past half dozen years, a growing number of companies, eager to partake of the 24-7 service they believe customers in the Internet era have come to expect, have established a superhub-linked operation in Memphis to do just that. Evening pickup in Memphis has become so popular that in February FedEx began offering a diluted version of it in 90 urban areas nationwide. Memphis nonetheless retains an edge. The service in other cities costs $15 extra, generally requires a somewhat earlier pickup (8 p.m. on the West Coast), and doesn't guarantee delivery until 3 p.m. the next day.
Lights blaze late into the evening at laptop-repair shops, barbecue purveyors, aircraft-parts dealers, and dot-coms hawking everything from prescription drugs to CDs. Many of those companies were drawn to Memphis by what might be called the "superhub advantage."
Among the companies that have opened up distribution centers in Memphis are behemoths Nike, Hewlett-Packard, and Williams-Sonoma. But small companies, too, have heeded the superhub call. To learn about the advantage firsthand, Inc. accompanied Alex Clevenger, one of some 80 FedEx second-shift couriers in Memphis, on his rounds one chilly evening in March.
Clevenger, 36, is an easygoing man of medium height who parts his chestnut hair in the middle. He starts his shift at 2:15 p.m. and finishes at 11:30 p.m., with an hour off for "lunch." As he steers his truck through warehouse-dotted sectors of southeast Memphis, he talks about his job and how it fits into the city's emerging mosaic of nighttime enterprises. His pride in being part of that world is unmistakable. "We have a lot of these companies moving into Memphis strictly for FedEx," he notes with satisfaction.
Although Clevenger says that many of the newcomers are small businesses, his stops are mostly at the loading docks of large ones. There is a methodical rhythm to his work: nudging the truck backward to loading docks with gears grinding, zapping the bar codes on packages waiting for him (his biggest haul is 380 boxes from a distribution center of Herbalife International of America Inc.), checking the numbers, sorting, and double-checking. But he also stops at one small-company warehouse, that of Sameday Inc. There, a parked van displays the two-year-old company's erstwhile motto: "We deliver like there's no tomorrow."
Sameday, based in City of Industry, Calif., produces supply-chain-management software. The company's motto could serve as an apropos, if slightly overstated, rationale for its Memphis operation. The Memphis facility, opened in June 2000, became the fifth in Sameday's string of fulfillment centers stretching from Los Angeles to New York City. Sameday runs the five centers as a sideline: they handle the critical-parts inventory for several large computer, aerospace, and telecommunications man- ufacturers. But it was the Memphis center that added an extra dimension to Sameday's business, says CEO Alex Nesbitt, because of the "hub-based logistics" that permit late-evening cargo pickups for next-day delivery in cities nationwide. "One of the reasons that we added that location is, over the course of a couple of years we saw 6 to 10 RFPs [requests for proposal] that required it," he says.
About 20 of Sameday's 130 employees (most of whom are temps) work at the parts repository in Memphis, which stays open 24 hours a day, 7 days a week, 365 days a year. The company ships its parts to customers by FedEx, usually for next-day delivery. Nesbitt estimates that some 20% of the company's revenues, which range from $5 million to $10 million, derive from its Memphis location. Being in the city, he says, "significantly expanded the market we could go after."
As Clevenger makes his nightly rounds, he keeps an eye on the clock for his witching hour -- midnight -- when all FedEx drivers must be back at their base offices. However, if they miss that deadline, they have an alternative: they can rush packages straight to the superhub. "Twice in four years," Clevenger says, "I've had to go to the airport." Even at midnight, he reports, warehouses and other business locales around the airport are ablaze with lights.
On the occasions that Clevenger has to sprint to the airport, he's likely to see a few of Mimeo.com's workers driving out of the parking lot of the company's Memphis outpost. Mimeo.com, a 16-month-old online document printer, maintains a staff of 50 programmers and administrative workers at its New York City headquarters. If the East Coast office is the company's cerebellum, its guts are in Memphis at the printing and shipping center, where another 50 employees work.
