Business and Industry | Logistic Centers
The 8-county region of Southern California is home to about 850,000 businesses,
including approximately 6,600 warehouses and 400 businesses involved with goods
movement and transportation. The role of warehouses and storage facilities for storing
goods, merchandise, etc. worth millions of dollars and keeping them secure is extremely
crucial. These facilities provide a range of services, often referred to as logistics
Efficiency in goods movement is impacted by access to transportation infrastructure.
Southern CA is crisscrossed by major interstates and state routes and is home to
two of the nation’s largest ports (LA and Long Beach) and several airports catering
to freight transportation. By virtue of access to this infrastructure, several regions
within Southern CA have the potential to evolve as major logistics hubs. This research
project provides a framework to visualize logistics facilities, identify which areas
are evolving as logistics hubs for warehousing or transportation, and analyze relative
proximity of warehouses to transportation facilities using accessibility indices.
Freight Transportation and Warehousing and Storage business locations were identified
using NAICS industry codes and data from ESRI’s Business Analyst©. Mapping warehouse
locations reveals three major concentrations: (a) in LA and Orange Counties; (2)
in the Inland Empire; and (c) in coastal San Diego County (map). The proximity of warehouses
and goods movement facilities to transportation infrastructure is unmistakable and
hence is a crucial determinant of site location. Next, Location Quotients (LQs)
were calculated to identify which areas have a higher share of employment, and therefore
specialization, in the logistics industries. The
map of LQs reveals that the cities of Long Beach and Compton (LA County),
Mira Loma (Riverside), and Fontana and Rialto (San Bernardino) are specialized and
can be considered logistics hubs.
Finally, indices of accessibility were computed for warehouses based on proximity
to truck, rail, and air (freight) transport facilities based on simple Euclidean
distance (point to point) and network distance and travel time. These indices included
both individual and composite accessibility for one or all modes of transportation,
respectively (see concept diagram). The resulting maps show that the accessibility of warehouses in LA
County to different modes of transportation is higher than their regional counterparts.
While cities in the Inland Empire such as Mira Loma, Fontana and Rialto serve as
logistics hubs, they derive their competitive advantage from warehousing and storage,
not freight transport infrastructure.
A region’s goods movement is often a reflection of its economy. Goods movement services
play a critical role in the generation of jobs and economic activity in their own
right. The economic activity of goods movement has “multiplier” effects for the
economy of an entire area. The maps developed as part of this research can be used
by businesses for operational decision-making such as route planning, optimization
and development of transportation strategy as well as strategic decision-making
such as site location, relocation, or facility consolidation. It provides an initial
framework for further research to investigate commodity classes being shipped, popular
modes of transportation, volume and value of goods movement and storage, primary
sources and destinations of goods in Southern CA and to study economic and environmental
impacts of goods movement and other related business logistics issues.
Contributor: Avijit Sarkar is an Assistant Professor in the School of Business at
the University of Redlands.