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Chattanooga: The Silicon Valley of Freight, Supply Chain Logistics

August 24, 2023 by The Company Lab

When driving through downtown Chattanooga, Tennessee, there’s a new building at the corner of the street.

Stretching four stories high, sits a clear glass building known as Steam Logistics. Inside the building, you can see several desks lined up across different floors, including one desk belonging to Steam Logistics Vice President of Client Success and Broker Development Heather Williams, who recently celebrated her two-year anniversary with the company.

Heather Williams, VP of client success and broker development, Steam Logistics

“I didn’t dream about moving transportation as a child. In fact, I wanted to be a veterinarian,” laughed Williams. “However, I know that what I provide has a global impact — it’s not just a nine to five job for me.”

Williams joined Steam Logistics, a company dedicated to supply chain development, in April 2021. However, she certainly isn’t the first person to work in the freight and logistics industry in Chattanooga.

“Years ago, Richard Porter, a very famous Harvard Business School professor, came to Chattanooga when the city was in a pretty dark spot economically. He scrambled around for ‘who are we, what do we need to be good at to compete and survive,’” said City of Chattanooga Mayor Tim Kelly. “Porter’s the father of cluster theory, in that what we need is a cluster that we can own and specialize in. Increasingly, that cluster is becoming freight and logistics.”

Thriving Supply Chain Businesses

Porter wasn’t the only one to recognize Chattanooga’s potential for success in supply chain development.

Tim Kelly, Mayor, Chattanooga

Co-Founder of AOL and current CEO of Revolution LLC Steve Case was one of the initial investors in FreightWaves, a supply chain media company based in Chattanooga.

According to FreightWaves, revenue was $13 million in Q4 of 2022, up 67% from Q4 of 2021. Moreover, annual revenue grew 230% from 2019 to 2022.

FreightWaves isn’t the only company seeing these impressive growth statistics.

Steam Logistics, founded in 20212, grew annual revenue to roughly $765 in 2022, and headcount now exceeds 700 employees.

In an interview with Forbes in 2022, Case said Chattanooga has become the ‘Silicon Valley of Trucking’ due to two primary factors: industry experience and government policy.

Mayor Tim Kelly says it’s not just those two factors that have a big influence in Chattanooga’s reputation as the ‘Silicon Valley of trucking.’ It’s also the numerous organizations based in Chattanooga offering unparalleled resources to any company within that industry.

“TVA’s CEO told me this himself. If you look at their mission or vision statement, it’s a three-part statement,” said Mayor Kelly. “One is power generation, two is economic development, and three is sustainability. If you think about where those factors intersect, it’s a perfect fit with this. As vehicle fleets become more electrified, EPB has a big part to play in that, not only from the side of power but the side of fiber and connectivity.”

Williams says besides Chattanooga’s advantage with fiber optics resources, the size and structure of the city plays a big role as well.

“Chattanooga has a unique offering in that we have a lot going here, but it’s not an overpopulated, over dominated, overcrowded city,” said Williams. “The freight world seems inundated here because there are big asset companies, many small brokerages, and mom and pop brokerages. There are so many opportunities in the logistics market share, that we're not overstepping one another.”

While Chattanooga is already ahead of the curve with resources for supply chain companies, The Company Lab (CO.LAB) Board Chairman Charlie Brock says there are even more resources becoming available—some that aren’t in any other part of the country.

“We've experienced incredible growth in the logistics industry,” said Brock. “It’s driven in part from spinoffs from the 2014 sale of Access America, as well as the expansion and relocation of other logistics companies.”

Chattanooga: Sustainability, Technology Startups Welcome

Brock and Mayor Kelly both say this isn’t just the time for major logistics companies to set roots in the Scenic City. It’s also time for entrepreneurs, startups, and small businesses in the supply chain sector to take advantage of Chattanooga.

Charlie Brock, board chairman, The Company Lab

“We’ve got a lot of people who moved here from cities with heavy entrepreneurially-driven ecosystems, like Denver and Austin,” said Brock. “Now they’ve moved here and are asking ‘How do I become part of it?’ I think the opportunity to pull some of those people into the ecosystem to support entrepreneurs themselves is really exciting — and a big driving force.”

This driving force also stems from resources like CO.LAB, which is designed to accelerate startups with assets like capital, connections, voice, programming, and talent.

“I think Colab will play a key role in what I'm calling the ‘Second Wave’ of entrepreneurial growth in Chattanooga,” said Brock. “We had a significant run of entrepreneurial success and developed a strong pipeline of high growth companies from 2011 to 2017. We are poised now to take our entrepreneurial landscape to another level and refill the pipeline of innovative, high growth startups - doing so in logistics, where we have an industry cluster stronger than anywhere in the country, gives us a huge competitive advantage. With capital sources like Dynamo, Brickyard and our new Venture South affiliation, the funding potential is certainly there.”

However, Brock said in order to maintain and grow Chattanooga’s reputation as the ‘Silicon Valley of Trucking,’ it’s going to require collaboration between entrepreneurs, corporations, investors, and government leaders.

“How do these corporations that are looking for innovation and are part of the innovative economy participate?” said Brock. “Sometimes they’re not sure how to engage. Can we get Tennessee corporations and Chattanooga corporations vying to support Chattanooga startups with purchase orders and capital investment? Can we get them to support programming like CO.LAB’s Sustainable Mobility Accelerator?”

For Williams, she sees the supply chain industry shifting, changing, and expanding even more in the coming years, especially following the COVID-19 pandemic.

“I hope Chattanooga can take a stance that’s going to show that the groups here think about that from a global perspective and not just within our city,” said Williams. “The entire world is affected by transportation, so the more that you can know and do your part to educate and understand what the life of a trucker on the street is like, or being conscientious of where you’re purchasing your goods from, are all really important things. I’m hoping the more we shine light on our industry, people can be aware of it.”

Brock says when it comes to the future of freight in Chattanooga, it’s not just the resources offered by the Scenic City. It’s the livability, community, and quality of life that put Chattanooga on the map as one of the top places to be.

“We have the people, we have the community, we have the incredible quality of life and affordability and some assets here that you can’t find anywhere else,” said Brock. “It’s the best place to build companies, invest your capital, and really feel like you’re making a difference. I think it’s going to be really fun to look back in 2027-2028 and see how far we’ve come from today.”

Want to learn more about the supply chain industry in Chattanooga or set roots down as an entrepreneur? Connect with The Company Lab here.

Guest blog courtesy of The Company Lab. MoreRead all guest blogs here.

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