The Madeleine Brand Show for May 15, 2012

What's driving the Inland Empire's warehouse boom

WAREHOUSE FLYOVER

Steven Cuevas

A portion of the Inland Empire's vast warehousing sector as seen flying into LAX-Ontario International Airport.

WAREHOUSE INTERIOR

Steven Cuevas

Interior of one of the Inland Empire's largest warehouse facilities, the 1.8 million square foot Skechers distribution center in Moreno Valley.


The Inland Empire continues to struggle with one of the highest jobless rates in the nation, but one Inland sector is adding jobs: warehousing – or as it’s known in the industry – logistics. Giant warehouse complexes now cover millions of square feet of the Inland valley.

To see how immense the warehousing industry is, just peer out the window of a jetliner. You’ll see a checkerboard of warehouses below, fanning out in all directions from where the Interstate 10 and 15 freeways meet in Ontario.

“This industry really started building out from downtown L.A. and the ports in the 1950s. In the ‘80s, it landed in Ontario,” said Inland Empire economist John Husing.

“Where the demand comes from is, international trade has exploded and 42 percent of all imported goods coming into the 50 states come in through L.A. and Long Beach.”

Warehousing is kind of seen as an economic tow truck hauling the Inland Empire out of the mire of the recession.

“It is the fastest growing part of our economic base,” said Husing.

“[Last] year, with the economy still failing, it’s up another 4400 jobs. From 2000 to 2007, it was more important than construction. So it’s hugely important to this region.”

But why the Inland Empire? Husing said there’s several answers. But here’s the most fundamental:

“Dirt. We have the ability to absorb very, very large facilities and that takes a lot of vacant land,” said Husing.

The same land that in the last century attracted waves of orange-growers and home builders is now attracting warehouses. But it takes more than dirt. It takes something extra, and Riverside investment banker Jamil Dada said the Inland Empire’s got that, too.

“Governments are friendlier; land is cheaper; traffic is not as bad,” explained Dada. “It’s easier to move the stuff from here to the other states, saving companies an hour and a half of traffic.”

The Inland Empire’s 380-million square feet of warehouse space is becoming the warehousing and distribution capital of North America.

A University of Redlands study said it is home to seven of the top 10 logistics communities in the country. But Brad Kemp of Beacon Economics cautioned that Inland communities shouldn’t over-invest in a single industry.

“We are a logistics hub — too much so. We have an over-concentration and we pay prices for that,” said Kemp.

Warehousing is at the mercy of fluctuating fuel costs, a fickle global economy and fierce competition from other logistics hubs.

“When it’s doing well, we’re doing well. When it’s doing badly, we're doing badly. We have to find other industries to bring in balance that out,” said Kemp.

Warehousing in the Inland Empire offers high-paying jobs for people with advanced degrees in computer science or with knowledge of robotics. But the industry also has plenty of entry-level jobs that pay $12 an hour or more. Banker Dada, who also sits on the Riverside County Workforce Investment Board, said that’s pretty good.

“Better than retail and fast food restaurants, which is what so many local people are doing."

Beggars, he said, can’t be choosers.

“For lack of a better term, times are tough right now,” said Dada. “So any job is a good job.”

But some warehouse workers loudly disagree.

Last year, a group of employees called for an investigation into what they said were unsafe working conditions at Inland warehouses.

“It’s time for us to demand a warehouse industry that provides good jobs but does not break people's bodies in the process,” said worker advocate Juan DeLara during a rally in San Bernardino.

Earlier this year, another group sued two employment agencies that supply workers to a WalMart distribution center in Mira Loma. They say the agencies ignore safety rules and workers are getting hurt.

“It’s not unusual,” said Guadalupe Palms of the advocacy group Warehouse Workers United. “They’re hurt on the job, wage theft, no breaks, no lunches — it’s rampant throughout the industry.”

More on that in our next story.


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