Project number: MT-15-27

Funding source: Caltrans

Contract number: 65A0533

Funding amount: $99,500

Performance period: 1/1/2016 to 12/31/2016

Project description

The purpose of this research is to document and analyze the location patterns of warehousing and distribution activity in California. The growth of California's warehousing and distribution (W&D) activities and their spatial patterns is affected by several factors, including population and economic growth, shifting supply chains and distribution practices, scale economies in warehousing, and the state's role in international and domestic trade. The location of W&D activities has implications for freight demand and flows, and thus is a critical element in statewide transportation planning. This research is conducted in two parts.

First, we conduct a descriptive analysis of W&D trends from 2003 - 2013 using Zip Code Business Pattern data. We find that: 1) the W&D industry in California has grown much faster than the transport sector or the economy as a whole; 2) W&D activity is distributed approximately with the population and total employment; the four largest metro areas in California account for about 88% of all jobs as well as of all W&D jobs; 3) at the metropolitan level the relative shares of W&D activity have been stable over the period; 4) there is some evidence of W&D activity moving away from the major metro areas to nearby smaller metro areas; 5) at the sub-metropolitan level we observe significant decentralization of W&D employment for the largest metro areas, suggesting that larger facilities are locating further from the center.

The second part of the research examines possible explanatory factors associated with W&D location trends. We estimate both cross sectional and longitudinal models of location. We find that: 1) the negative binomial specification explains the distribution of W&Ds better than the simple binomial; 2) the correlation between employment density and W&D activity decreased significantly over the decade, whereas the effect of labor force access is consistently significant; 3) W&Ds are more likely to be located in proximity to intermodal terminals and highways and farther from seaports; 4) the signs and significance of regional market attributes - the share of linked industry at the regional level - are consistent across model specifications but vary across the model years and metro areas; 5) the first-order autoregressive model documents that the effect of regional market attributes decreased significantly over the time period. This suggests the responses of the W&D industry to changing market conditions take place quickly. However, the overall pattern of W&D activity appears to be stable.