How Amazon’s HQ2 Could Transform Regional Supply Chains

Unless you’ve been living under a rock for the past few months, you are most likely very familiar with Amazon’s quest for a new headquarters, or the HQ2. The competition and pageantry have been intense as many of the United States’ largest cities and most prosperous regions have put together competitive bids to woo Amazon to planting HQ2 in their location. Even cities in Mexico and Canada have written love letters to Amazon to draw them to their borders. After receiving more than 230 proposals from various locations, Amazon has narrowed the field to 20 finalists. The ramifications of Amazon setting up shop in your region are still being theorized about, but there is no question that the regional supply chains of these areas will be transformed forever. This article will list and briefly discuss the 20 finalists, describe HQ2 and its future functions, as well as analyze the potential impact of Amazon’s operations on regional supply chains.

The Finalists

Here are the 20 potential cities:

Atlanta; Austin; Boston; Chicago; Columbus, Ohio; Dallas; Denver; Indianapolis; Los Angeles; Miami; Montgomery County, Maryland; Nashville; Newark; New York City; Northern Virginia; Philadelphia; Pittsburgh; Raleigh; Toronto and Washington, D.C.

Although Amazon has listed these cities as potential landing spots for the HQ2. Most experts consider the following four as having the most realistic shot:

Atlanta

Atlanta has a few things going for it that makes it a suitable candidate for HQ2. First, it possesses a major international airport that would make the logistics of travel infinitely easier for Amazon executives. Atlanta has a talented and tech-savvy working population to draw talent from. Its relatively pleasant weather, affordable housing, and entertainment culture are the cherries on top of this strong candidate.

Austin

Austin, Texas is another solid candidate for HQ2. It possesses phenomenal academic institutions which translates into a very competent and technical workforce. Texas itself is a very business-friendly state, which Amazon could also be weighing in its favor.

Pittsburgh

The biggest perk that Pittsburgh has going for it is its overall lower cost of living relative to its competitors. Pittsburgh also has access to a healthy pool of talented workers and college graduates. Its location on the East coast may also be a boon if Amazon is wanting its HQ2 to be geographically distinct from its Seattle HQ.

Boston

“We have MIT and Harvard”, is perhaps all that Boston should say. In all seriousness, Boston possesses perhaps the most extensive technical talent pool in the nation. Probably matched only by Silicon Valley. Boston itself enjoys a great quality of life, entertainment, and sports culture. Its public transportation system is also excellent. A strong negative, however, is its high cost of living compared to that of its competitors.

What is HQ2 and What Will It Do?

The main goal of implementing Amazon’s HQ2 is to create an autonomous supplement headquarters to the existing Seattle location. The new location will reportedly cost a minimum of $5 billion in construction and operation expenses. Experts predict that the HQ2 will create upwards of 50,000 high-paying jobs. The HQ2 will act as a geographically separate and distinct center of Amazon’s operations. This final function is why many experts are predicting that East Coast cities have the best chance of nabbing Amazon’s HQ2.

Economic and Supply Chain Impact

The overall economic impact of the headquarters is still being analyzed. But it can be reasonably inferred that the HQ2 will create many other supplement jobs and inject more prosperity into the regional economy. The final impact will largely depend on the specific city chosen. A good rule of thumb is the larger and more established a city is, the smaller the transformative impact will be. For example, the transformative impact will be less for New York City than Indianapolis. The impact of HQ2 on regional supply chains will be interesting to see develop. It is highly likely that Amazon will lobby and potentially invest in infrastructure upgrades to improve logistical performance. This could be a huge boon for all companies who employ consistent supply chain operations. Furthermore, Amazon is THE leader in e-commerce supply chain fulfillment. Other regional companies can piggyback off Amazon’s peerless supply chain and further improve their own operations. Overall, industry experts are predicting a large net-positive for the region that lands the contract for Amazon’s HQ2. The bottom-line is that freight volume will increase dramatically in whichever region is chosen, and perhaps other regions near as well.

It is difficult to properly forecast the potential impacts of Amazon’s HQ2 on the eventual winning region. A large part of the outcome depends on the specific region chosen, as well as future choices by Amazon itself. If you are interested in ways to maximize your supply chain, and if you’re lucky enough, prepare for Amazon’s arrival, then partnering with a reputable 3PL is a sound strategy. LTX has the knowledge and technology to solve your logistical problems. With over 100 years of combined industry experience, LTX is your one-stop-shop for all things supply chain.