Memphis - Capital of the Real World

It's the nation's busiest distribution center. And its concentration of trucks, trains, forklifts, and planes keeps all kinds of stuff - and the economy - on the move.

cWe live in a virtual era. Virtual malls, virtual bookstores, virtual cafes, whole companies that are nothing but bits and bytes, business models built on intangible assets and ethereal Web presences.

Welcome to Memphis, Tennessee, capital of the real world.

Memphis is the opposite of virtual. It's where all the stuff is kept - the Apple PowerBooks, the Nike sneakers, the HP LaserJet toner cartridges, the Mickey Mouse plush toys - before it's shipped to you. Over the past decade, because of geography and Federal Express, Memphis has become a mecca for people who transport things, a city built on infrastructure and logistics - a city on the move.

At the airport, one of the first signs you see says, "Memphis - America's Distribution Center." Unlike most civic boasts, that's an understatement: Memphis is the distribution center for the entire continent - and sets the standard for the entire world. Memphis International Airport is the world's busiest cargo airport. For each of the last six years, it handled more cargo than JFK, LAX, Tokyo's Narita, Amsterdam, or Frankfurt.

Memphis is home to 195 truck terminals - so many that every intersection on the city's south side looks like a stretch on the interstate, complete with a must-stop truck stop. Here, geography drives economics: A truck leaving Memphis is within an overnight drive of 75% of the nation's population.

Memphis contains yards for each of the nation's top four railroads. It's the end point of a 7,000-mile product pipeline that starts in Asian factories, where goods are packed into huge containers, and passes through the West Coast, where the containers are transferred directly onto Memphis-bound trains. After clearing customs in Memphis, the containers are dropped onto truck trailers and hauled the last few miles to a Disney Store distribution center, a Nike distribution center, a Sears distribution center.

Memphis can accommodate all comers: Within a six-mile radius of the airport, 130 million square feet of warehouse space - the equivalent of 130 major suburban malls - lies waiting for new tenants who want to make the move to Memphis.

Keep It Moving

At Williams-Sonoma's national catalog-sales fulfillment center, a box that's sealed and about to be shipped gets one final check. Riding on a racetrack-shaped conveyor, it passes across a scale built into the conveyor belt. As it hits the scale, a ruby-red laser scans the bar code on top of it. In a flash, a computer looks up the package's file in the main Williams- Sonoma database and compares its actual weight with the predicted weight that the computer had calculated the day before, when the order came in from a woman in Winnetka, Illinois. If the weights are within tolerance - that is, if the box appears likely to contain what the woman ordered - the computer tells the conveyor belt which exit ramp to kick the package down. The box then glides onto the right FedEx truck, docked one story below.

Almost as an afterthought, the computer lists the package on the truck's manifest and builds a file for Williams-Sonoma's customer-service department, which can now tell the woman in Winnetka that FedEx will soon have the package at her door.

But here's the real story: The package never actually stops on that built-in scale. In Memphis, the goal is to keep things moving - and on this conveyor belt, the boxes fly by at the rate of 3,600 packages an hour. In other words, the computer scans, weighs, cross-checks, verifies, lists, and dispatches an average of one package per second.

Steel Wheels

Freight trains ready to unload in Memphis sometimes have to park on a bridge spanning the Mississippi River. They are so long - a mile and a half or more - that sometimes the diesel locomotives idle in Tennessee while the freight cars sit in Arkansas.

More than half the cargo coming through the Burlington Northern Santa Fe railroad yard in Memphis is from overseas. The trains that arrive there several times a day - each car tracked by computer as it steel-wheels across the continent - are "de-ramped" with a sure-handed combination of strength and delicacy. Four giant forklifts, each capable of lifting 35 tons in a single pull, grab each container and settle it onto a truck chassis.

And truck drivers line up to wait for the trains. If the BNSF forklifts - which cost $1 million apiece, with tires costing $6,000 each - have to take your box off a train car, set it on the ground, and pick it up again when your truck finally arrives, the railroad charges you a second-lift charge of $50. After five days, the company starts charging $50 a day for every box that sits in its yard. Time is money: Memphis is not a town that tolerates very much waiting.

Smart Trucks

Technology makes even the traditional muscle trades smarter and more efficient. Memphis-based MS Carriers Inc., one of the nation's largest trucking companies, equips each of its 3,300 rigs, whether company- or driver-owned, with a small computer. The computers monitor 130 variables about each truck, checking them every 6 minutes, 24 hours a day. That cascade of data flows into sophisticated decision-making software that helps the company's schedulers figure out which drivers should get which loads.

The computers also improve on-board efficiency: 50% of the time, MS Carriers knows, the engines on its trucks are idling to provide heat or air-conditioning for sleeping drivers. With the new system, each truck's engine turns on and off as needed, reducing engine wear and fuel waste while maintaining the driver's comfort.

MS Carriers calls itself a "time-definite" trucking company. "We operate by appointment only," says CEO Mike Starnes, "for both pick-up and drop-off. We go by the minute. Some people give you 15 minutes' leeway. We don't do that." The company moves 2,000 loads a day, with an on-time delivery rate of 98%.

Pickers & Movers

Mark Lott works a forklift in the back end of one of Williams-Sonoma's three buildings in Memphis. The forklift has ergonomic throttle controls, air-conditioning, a small computer, a laser-driven barcode scanner, and a printer. "This is my office," Lott says. The computer communicates by radio frequency with the main warehouse computer, which tells him where to store incoming merchandise and what to retrieve for the packers. Lott keeps the mother computer up to date by scanning in the products he's moving and the locations to which he's delivering them.

In another area of the complex, staff members called "pickers" wear computers on their wrists. The computers have a screen on which a picker can read radio-transmitted instructions about which products to move. Each glove-style computer also has a scanner in its nose: To track an order, all the picker need do is aim and shoot.

The entire system - all the technology, all the people - is designed to keep Memphis moving. In fact, the people who run these huge facilities know that nothing matters if the product doesn't move. Says Jerry Owens, senior vice president for distribution at Williams-Sonoma: "We hate people to call us a warehouse."

Charles Fishman cnfish@mindspring.com is a Fast Company contributing editor.

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