Job Creation Factors for Near Dock & Intermodal Facilities...

Center for Logistics, Trade, and Transportation

www.usm.edu/logistics-trade-transportation/

Chad Miller, Ph.D.

The University of Southern Mississippi

Job Creation Factors for Near Dock & Intermodal Facilities/Warehouse Job Creation

Member of the National Center for Freight and Infrastructure Research and Education (CFIRE) Consortium

World Trade Center Mississippi 2013 Intermodal Conference

Multi-Modal Transport: Cornerstone of the Global Economy April 24 & 25, 2013

Gulfport, Mississippi

Research supported by the Mississippi Department of Transportation (MDOT) and the Intermodal Freight Transportation Institute at the University of Memphis

http://www.usm.edu/logistics-trade-transportation/



Intermodal Freight Facilities (IFF)

• For this study, we are focusing on near port and hinterland facilities designed to handle containers.

• Identified 184 rail-to-track containerized freight transfer facilities with at least a dozen more under development. 39 used for statistical analysis

• Also examined 28 near dock near intermodal facilities

http://www.thefutureneedsus.com/project-updates/birmingham/




Review of 184 Intermodal Facilities

• Growing Trend and Sophistication – Green Technology

• Range of Type of Facilities – Rail spur to freight village

– Ownership: Public Authority to Railroad

• Industrial Real Estate Development Companies – CenterPoint Properties, the Allen Group, Hillwood, A Perot Company

http://www.bnsfconnects.com/make-the-connection/c/cleaner-air




Review of 184 Intermodal Facilities

• Large economic impact estimates

– The new $105 million Memphis Regional Intermodal Facility in Rossville, TN is expected to create or enhance 6,200 jobs

– Alliance Texas Logistics Park over $5 billion dollars in private investment, 24,000 permanent jobs, and $147 million in property taxes

– The $112 million NS intermodal facility in McCalla, AL is forecast to create 8,600 jobs

• Increasing use of ED incentives

– MD Department of Transportation splitting the estimated $150 million cost of a CSX facility

– BNSF provided 65% tax abatement along with over $25m in road connector construction for its intermodal facility in Kansas City

– CenterPoint Properties received $100 to $125 million in tax incremental financing (TIF) support for the Joliet Intermodal Terminal (JIT)




Range of Employment Impacts

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Change in Intermodal Related Employment Year 3-5 after opening

What can explain this range of job creation impacts? Can government involvement increase the likelihood of job creation?

Top Job Creaters Bottom Job Creaters

1. UP/ Port Laredo (1990) 2. NS/Virginia Inland Port (1989) 3. Marion (AR) Intermodal Railport (1998) 4. NS Georgetown, KY Intermodal Facility (1987) 5. Port of Quincy (WA) Intermodal Terminal (2005)

1. St. Paul (MN) Intermodal Facility (1974) 2. Columbus (OH) Intermodal Terminal (2007) 3. Somerset (KY) Rail Park (2007) 4. Detroit Intermodal Freight Terminal (2004) 5. Buffalo Intermodal Container Terminal Facility (2007)




Dependent Variable: Intermodal Related Jobs

Logistics related fields

SIC SOC Description

81017 53-1021 First-Line Supervisors of Helpers, Laborers, and Material Movers, Hand

81011 53-1031 First-Line Supervisors of Transportation and Material-Moving Machine and Vehicle Operators

97102 53-3032 Heavy and Tractor-Trailer Truck Drivers

98700 53-7062 Laborers and Freight, Stock, and Material Movers, Hand

The employment and annual wage data for metropolitan and nonmetropolitan areas were retrieved from the Occupational Employment Statistics page of the Bureau of Labor Statistics Website. County level data by industry was found on the Bureau of Economic Analysis. Employment for counties containing the facility and adjacent counties was included in the analysis. Absolute and percent change




Independent Variables

Inland Facilities 1. National/local Business cycle 2. Management model

– Landlord Model (public authority owns the land)

– Operator Model (e.g., railroad) – Developer Model

3. Developable land (population density) 4. Annual container Volume

– 3.6 direct jobs per 1,000 TEU of throughput (TranSystems 2011)

5. Level of public funding 6. Dryport

– An inland intermodal terminal directly connected to seaport(s) with high capacity transport means(s), where customers can leave/pick up their standardized units as if directly to the seaport (Leveque and Roso 2002).

Near Dock Facilities

1. Size of Facility In Acres

2. Annual container Volume – 3.6 direct jobs per 1,000 TEU of

throughput (TranSystems 2011)

3. Size of existing transportation sector




Findings of Statistical Analysis of IFFs

• It appears that there was an ‘early mover’ advantage related to IFF job creation. Facilities that opened earlier tended to have larger job creation numbers.

• Intermodal facilities tend to be associated with greater job creation when they are built in regions with a higher level of transportation related employment to start with. This indicates that these regions are building on the existing strength of the region’s transportation sector.

• The size of intermodal facilities has little or no relationship to job creation. Large facilities may be very efficient at moving large volumes of freight utilizing a small workforce. Conversely, small facilities may attract other transportation companies to the area.

• The landlord management model was associated with higher intermodal related employment growth.




South Mississippi Warehouse Job Creation Study Research Question

Assuming projections of increased volumes of freight moving through northern Gulf of Mexico ports as a result of the completion of the Panama Canal Expansion materialize, what will be the expected impact on warehouse and distribution job creation in South Mississippi?




Methodology

• Literature Review

• Primary and Secondary data collection of the historical trends of warehouse & distribution industry in South Mississippi

• Case Study of the Port of Mobile Pre & Post Expansion and the impact on South Alabama’s warehouse & distribution industry

• Shift share analysis of warehouse & distribution industry employment




Warehouse Location Literature

• As retail distribution centers grow in size, the tendency is to locate these facilities in less populated rural areas away from more populated port areas (EEOC 2004).

• Bowen (2008) found that seaport access was not critical while air and highway access was essential.

• Large warehouse location selection unaffected by local market access and zoning controls, but instead was mostly driven by surface and air-transportation access advantages (Sivitanidou 1996) .

• Decentralization of freight activity from metropolitan central business districts toward the periphery of urban areas while nationally there was a centralization of freight activity to the Midwest (Cidell 2009) .

• Dablanc and Ross (2012) exam “logistics sprawl” and highlight the role of megaregions in understanding the new geography of warehousing and distribution.




Path of Goods Movement (POGM)

• Analyzes the routes along which goods move using shipping weight (in tonnage) to determine strong demand for warehouse space (Mueller & Laposa 1994; Mansour, & Christensen, 2001)

• Larger warehouse nodes tend to occur at major Interstate Highway System intersections along routes to and near large population bases. A port is the end point of the POGM system.

National Warehouse Markets on the Path of Goods Movement Market Square Foot per Person

Memphis TN-MS-AR 123 Columbus OH 105

Indianapolis IN 95 Cincinnati OH-KY-IN 86

Cleveland OH 85 Kansas City MO-KS 85

Riverside-San Bernardino CA 84 Atlanta GA 80

Edison-New Brunswick NJ 77 Dallas-Fort Worth TX 75

Charlotte NC-SC 74 Chicago IL 74

Nashville TN 73 Salt Lake City UT 69

Miami FL 68 Los Angeles-Long Beach CA 64

Detroit MI 63 Newark-Union NJ-PA 63

St. Lois MO-IL 63 Jacksonville FL 61

Houston TX 61 Portland-Vancouver OR-WA 60

Oakland-Fremont CA 58 Source: CoStar/Property and Portfolio Research 2012




The changing geography of freight activity across the US

Source: Cidell 2009

A pattern of Midwestern distribution centers emerging, plus the Pacific Northwest and Piedmont regions to a lesser extent. A trend towards inland ports is visible.

“Logistics Clusters




Port-Centric Economic Development Literature

• Public investment in ports often justified on claims of job creation and numerous impact studies claim regional job growth.

• Seaport activity is becoming more self-contained and less capable of generating spillover benefits for their metropolitan regional economies because of pass-through freight (Christopherson & Belzer, 2009).

• Grobar (2008) suggests that though ports are growth engines for the nation and the states it is located within, ports could be the cause of decline in the immediate radius that it has a direct impact over; that is within a 7 and a half-mile radius of the port.

• Helling and Positer (2000) conclude that ports have “weaker economic ties” to their home location; essentially this means that benefits from the port are becoming less distributed locally, and more dispersed to areas outside the port region




Port of Gulfport Expansion

• Major clients of the port – Chiquita, Dole & Crowley – Moving their containers by truck

Source: Burk-Kleinpeter, 2011

• Modal shift of containers is a possibility in the future

• 350,000 containers expected to move by train in 2025

• Changes in business patterns

• New businesses attracted to Mississippi that could use the expanded port




Growth in Container Traffic

0

50,000

100,000

150,000

200,000

250,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Port of Gulfport

Port of Mobile

Container Traffic in TEUs by Port

Source: AAPA

Source: WISER




South Mississippi Warehousing Employment (NAICS 493)

Source: EMSI

2001 Jobs

2011 Jobs

% Job Change

2011 Establishments

Location Quotient

Southern Mississippi

1,161 1,089 -6.2% 29 1.17

Memphis Region of Mississippi

1,904 3,825 100.9% 58 4.71

Nation 544,040 723,668 33.0% 15,221

Location quotient is a technique to compare the concentration of business activity levels among different regions




0

500

1,000

1,500

2,000

2,500

3,000

3,500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Wholesale Employment

Warehousing Employment

Gulfport-Biloxi MSA Total Wholesale and Warehousing Employment from 2000-2010 (NACIS Codes 423 and 493)

Source: U.S. Census Bureau

Despite Increased Port Activity Warehouse and Distribution Employment is Decreasing




The Case of the Port of Mobile Expansion

In 2008, Alabama State Port Authority under went a $600m expansion. Regional warehousing and storage employment (NACIS code 493) grew 25.2% from 2001 to 2011 -General warehousing down, but refrigerated warehouse up National employment during same time increased 33%




State Versus Regional Job Creation

Mobile Region Transportation-Related Jobs 2001-2011

No. of jobs 2001

No. of jobs 2011

Change Percentage Change

15,020 14,252 -768 -5.4%

Martin Associates LLC (2009) employment impact for the state was 92,578 jobs state wide

Warehousing would be part of the 72,465 related user jobs includes shippers, consignees, importers, and exporters

Industry NAICS Jobs LQ 2001 LQ 2011 Avg. Wage

Trucking 484121 -2,057 3.08 1.82 $45,586

Sea Transportation 483111 766 0.42 23.44 $81,130

Source: EMSI




Alabama Warehousing Employment 2001 and 2011

Source: EMSI




Shift-Share Analysis of Warehousing Jobs (NAICS 493)-MSA Level

Shift-share is an analytical technique to identify industries considered to have a comparative advantage in that particular area




Shift-Share Analysis of Warehousing Jobs (NAICS 493)-State Level




Conclusions for Job Creation

• States and the Nation benefit the most from port-related development – The job creation benefit to port cities is less clear

• Under current business practices minimal impact on

warehousing jobs in South Mississippi – Major clients are sending most of their containers to final

destination by truck immediately after receiving • There is an important role for the public sector to ensure

quality job creation – Economic developers need to understand global supply chains




Chad R. Miller, Ph.D. Assistant Director

The University of Southern Mississippi Center for Logistics, Trade, and Transportation

Trent Lott National Center for Excellence in Economic Development & Entrepreneurship Bldg

118 College Drive, #5022 Hattiesburg, MS 39406 Tel: 601-266-6666 Fax: 601-266-6071

Email: [email protected]

“Making Multimodal Freight Systems Work for Economic Recovery and Quality of Life”

Miller, Chad, Brian Richard, MD Sarder, Tulio Sulbaran, and Martin Lipinski, “Job Creation Factors for Inland and Near Dock Intermodal Facilities,” Proceedings of National Conference on Intermodal Transportation: Problems, Practices, and Policies (NCIT), Hampton, Virginia, 2012. p52-60 http://biz.hamptonu.edu/esitac/docs/ncit2012_proceedings_rev20121214.pdf


Job Creation Factors for Near Dock & Intermodal Facilities...

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