Warehousing, Transportation Industries Rapidly Expanding In NEPA
DUNMORE — Scot Hartman drove his first big rig when he was only 13.
Now 58, the Dunmore resident and Road Scholar Transport driver spent the past 35 years professionally hauling goods throughout the country, joining nearly 2,000 tractor-trailer drivers in Lackawanna County. The county had 1,770 heavy and tractor-trailer drivers in 2014, and that number is projected to increase to 2,080 by 2024, according to the Department of Labor and Industry’s 2018 high-priority occupations listing for the state. Luzerne and Schuylkill counties had an estimated 3,740 drivers in 2014, with that number expected to grow to 4,200, according to the high-priority occupations list.
The warehousing and transportation industries are rapidly expanding in Northeast Pennsylvania as developers shift their attention to the region because of its available workforce, cheap land and easy access to numerous interstates.
The region has always had warehousing, but never to the extent it does today, said Lackawanna County Transportation Planning Manager Steve Pitoniak. Rather than 50,000- or 100,000-square-foot facilities, “we’re seeing million-square-foot warehouses that are stand-alone facilities,” he said.
“Warehousing is what the up-and-coming businesses are,” he said.
Pitoniak attributed the popularity of warehousing and distribution in Northeast Pennsylvania to proximity to various major roads, like Interstates 80, 81, 84, 380 and 476.
The Pennsylvania Department of Transportation’s District 4, which encompasses Lackawanna, Luzerne, Pike, Susquehanna, Wayne and Wyoming counties, has more miles of interstate than any other PennDOT district, Pitoniak said.
In Luzerne County, Mericle Commercial Real Estate Services’ 1,800-acre CenterPoint Commerce & Trade Park boasts nearly 10 million square feet of facilities and is “especially attractive to distribution centers,” said spokesman Jim Cummings. The park houses major firms like Amazon, FedEx SmartPost, Home Depot and Lowes.
The landscape for distribution centers changed “largely to the favor of Northeastern Pennsylvania” in recent years, he said.
The largest regional competitors are Lehigh Valley, Greater Harrisburg, and Northern and Central New Jersey, Cummings said. Because those regions have seen so much distribution and industrial construction, “they are running out of land,” he said. Additionally, real estate costs, taxes and labor have “risen significantly,” Cummings said, explaining that companies contact Mericle saying they can no longer afford the other locales.
Cummings also listed growth in automation as a significant change for the distribution landscape. Shortages of labor, especially skilled labor, is one of the “most vexing” problems in the industry, he said.
“With the growth in e-commerce likely to continue for many years to come, the supply of logistics labor will continue to dwindle,” Cummings said. “Companies recognize this problem and have thus been aggressively looking for ways to use robotics and artificial intelligence to lessen their reliance on human capital.”
He said he believes growth in automation will be the “single biggest trend” in distribution centers over the next decade.
Jim Barrett, who founded Road Scholar in 1988, employs about 113 drivers but wants to hire more, he said. The No. 1 problem facing the trucking and logistics industry is an inadequate driving workforce — “hands down,” he said. Fewer drivers to choose from leads to “deteriorating talent,” Barrett said.
“I see the absence of talent,” Barrett said, describing Road Scholar’s employment numbers as “not enough” because of it.
Despite the workforce deterioration, the industry grew significantly over the past 30 years, Barrett said.
“I think it has nowhere to go but to continue to spiral upwards,” he said.
The price of land locally is “more palatable” than cities like Newark or East Brunswick, both in New Jersey, and Barrett attributed the industry growth to highways, saying local drivers are “two hours into New York, two hours into Philadelphia, four hours into New England.”
“It gives us access to consumer goods,” he said. “It allows our businesses to have a quick distribution pattern.”
Additionally, firms can access about 34 percent of the population within four hours of driving, Barrett said.
Local warehousing and distribution firm Kane is Able tells its clients that they can access 80 million consumers within a day’s drive of its Scranton facility, Kane spokesman Alex Stark said.
Stark also attributes the growing warehousing and distribution industries in Northeast Pennsylvania to a strong blue collar workforce, along with tax incentives and local workforce development. In Lackawanna County, warehouses often receive tax abatements like the Local Economic Revitalization Tax Assistance program. Under LERTA, property owners only pay a fraction of taxes — if any — on the improvements done to a property for a certain period of time.
Stark also works with the Scranton Lackawanna Industrial Building Company, which is an affiliate of the Greater Scranton Chamber of Commerce, to speak at area high schools and colleges about opportunities in the industry to develop the local workforce.
SLIBCO Vice President Andrew Skrip noted that salaries are “climbing dramatically,” with distribution wages climbing from $8 to $11 to $15 an hour.
Workforce availability is one of the major concerns in the industry, SLIBCO Vice President Amy Luyster said, explaining that forklift and truck drivers are “very much in demand.”
To foster a regional workforce, SLIBCO works with firms like Kane is Able to make connections in schools to “build a pipeline,” she said.
A depleted workforce in part drove organizations from the Lehigh Valley region to Northeast Pennsylvania, SLIBCO economic development specialist Bruce Reddock said. Over the past five to 10 years, big box distribution centers consumed a number of jobs, “and I think that’s why they’ve looked at the northeast part of the state,” he said.
The SLIBCO officials all agreed that the warehousing and distribution industries will only grow, even if automation takes hold.
“I think it’s going to continue to grow but you’re going to see this higher level approach of warehousing and distribution where it’s going to be more automated,” Reddock said.
Automation will not lead to substantial job losses though, because firms will still need higher-skilled employees to operate their machines, Reddock said.
As more national developers move into the region, SLIBCO officials said they believe it will only lead to more growth. Reddock said he thinks they will see Northeast Pennsylvania, and Scranton specifically, as “the place to be.”
“We hope that generates a snowball effect,” he said.
However, with the increase in large warehouses in Lackawanna County, “we don’t have million-square-foot sites left ... so there’s a need for it,” Skrip said. “We sometimes have to move mountains to have flat sites.”
Although Skrip could not speak to an exact location, SLIBCO has sites in mind to level to create more million-square-foot sites.
As locations like the Valley View Business Park in Jessup and Archbald and CenterPoint in Pittston and Jenkins Twps. draw in millions of square feet of warehouse space, the firms need truck drivers and logistics to deliver their products.
That is where Hartman and an eye-catching yellow and teal Peterbilt 386 truck come in.
The Road Scholar driver estimates he’s driven at least two million miles throughout his career, and he is a member of Road Scholar’s million mile accident free club.
“I enjoy driving the truck itself,” he said, explaining he likes the challenge of hauling goods as a less-than-truckload (LTL) driver.
LTL drivers have multiple stops on each trip.
“I like the challenge of trying to get all the stops off,” he said. “That’s what I enjoy about this — the challenge.”
Trucking runs in the Hartman family, the career trucker said, explaining his uncles, cousins and briefly his father were all truck drivers.
Hartman said he has watched the industry change for the better and for the worse. Technological innovations greatly benefitted the industry, bringing with them GPS and satellite-equipped computers, he said. At the same time, a lack of truck drivers has led to more “less than desirable” drivers on the road, he said.
There is a “tremendous shortage” of drivers in the county, with many drivers now in their late 40s through mid 50s, said Dominic Jengo, the northeast U.S. regional vice president of the Logistics and Transportation Association of North America.
Even with the shortage of drivers, Jengo, who has more than 50 years in the trucking industry, does not foresee self-driving trucks in the near future.
“We have a long way to go in developing more sophisticated software for these things to operate,” he said, explaining that there is much more room for error driving an 80,000-pound tractor-trailer compared to a 4,000-pound self-driving car.
For Jengo, the internet brought “astronomical” change, like the advent of onboard computers, allowing carriers to track drivers more easily.
He compared the technology to the popular driving service Uber in that a firm can see the nearest truck and dispatch it to a location to make a pickup.
Regardless of how the industry changes, “no matter how you slice it, you got to move product from point A to point B,” Jengo said. “A truck is a truck, and it’s moving freight.”
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