The Dayton region will move billions of dollars in goods this holiday season due to its “strategic advantage” of being located alongside major trade corridors in Ohio and the Midwest, a national trade expert said.
The region moves more than $72 billion in goods annually, ranking it 54th among the top 100 U.S. metros, according to a new Brookings Institution report on trade.
That’s welcome news to local economic development officials working to grow the area’s thriving logistics industry after recent successes landing Procter & Gamble, Caterpillar and Payless ShoeSource distribution centers, among others.
“Dayton is punching above its weight in terms of how many goods it is moving,” said Joseph Kane, a senior policy and research assistant at the Brookings Metropolitan Policy Program, and co-author of “Mapping Freight: The Highly Concentrated Nature of Goods Trade in the United States.”
The report said the U.S. goods trade network centers on a small group of metro areas that serve as trading and distribution hubs for the rest of the country. Ohio’s non-metropolitan areas rank 22nd among the nation’s Top 25 most centralized trading regions, accounting for $229 billion in total trade volume in 2010.
Kane attributed Dayton’s “enormous role” in domestic goods trade to infrastructure assets that include the intersection of Interstates 75 and 70, as well as CSX railway lines, that put the region within 600 miles of 67 percent of the U.S. population.
Erik Collins, Montgomery County director of community and economic development, also credits the region’s abundance of desirable sites, low levels of traffic congestion and a suitable labor force.
Metro areas tend to trade more goods with each other when they are located close together, employ a sizable number of logistics workers, and house large populations, the report said.
Dayton’s top three metro trading partners are Cincinnati at $6.1 billion; Columbus at $3.9 billion; and Detroit at $3.2 billion.
Dayton moves $15.3 billion annually in transportation equipment, followed by $13.1 billion in machinery and tools.
Kane said nearly 70 percent of all goods in the U.S. are carried by trucks, which benefits Dayton because of its location at the “critical intersection” of two interstate highways.
However, a looming shortage of truck drivers could put the brakes on much of the nation’s logistics industry, said Kevin Burch, president of Dayton-based Jet Express Inc.
The U.S. trucking industry is short about 35,000 drivers, according to the American Trucking Associations. That shortage could grow to about 240,000 drivers by 2020 if it is not addressed, officials said.
“You can build these warehouses and distribution centers, but you need drivers who are professionally trained to haul freight,” Burch said.
Regional workforce development efforts must include training truck drivers, said Chris Kershner, the Dayton Area Chamber of Commerce’s vice president of public policy and economic development.
“We’ve got good trucking companies here like Jet Express and Dayton Freight and others, but we have to make sure that they have the right employees and drivers that they need to be successful to support the logistics industry,” Kershner said.
Kershner said logistics is a “tremendous growth sector for the region.” In addition to P&G, Caterpillar and Payless, the area also is home to Meijer, General Pet Supply, Carter Logistics and WinWholesale distribution centers.
Other companies are likely to follow P&G’s lead and take advantage of the I-75/I-70 interchange and Dayton’s population concentration, said Joe Kutka, Exel general manager for the new P&G distribution center in Union.
“Dayton is the obvious location for that type of industry,” Kutka said.
Exel and Quality Associates both started hiring this month for the P&G facility, which could employ as many as 1,350 workers by the end of 2015.
This month, the chamber hosted the first-ever Dayton Logistics Forum, where Kershner announced the formation of the Dayton Area Logistics Association, a new initiative to help provide education, training, networking and advocacy for new and existing supply chain companies in the region.
The Montgomery County Department of Community and Economic Development recently was awarded a two-year, $243,000 state grant to build a workforce pipeline for new and existing logistics and distribution companies, including a business plan detailing how to develop a regional logistics training center.
Montgomery County also launched a new website, DaytonLogistics.com, to promote the region to industry site selectors and post available logistics jobs in the area.
Collins said the region’s logistics efforts are collaborative and complimentary. “We are moving in the same direction in an integrated way,” he said.