Logistics gaining steam in Columbus region

  • File/Columbus Dispatch
    Rickenbacker International Airport hums with goods from shippers including FedEx and Cathay Pacific Cargo.
  • File/Columbus Dispatch
    Rickenbacker International Airport hums with goods from shippers including FedEx and Cathay Pacific Cargo.
  • File/Columbus Dispatch
    Rickenbacker International Airport hums with goods from shippers including FedEx and Cathay Pacific Cargo.
From the May 2015 issue of Columbus CEO

As the U.S. economy continues to improve, logistics—the movement of goods and services—has become more crucial. Thanks largely to its central location and transportation nexus, the Columbus region has long had a significant slice of the national logistics pie.

And city leaders are aiming to cut an even bigger slice in the several years to come.

Employment growth in areas related to logistics between 2010 and 2020 is on track to be greater than 21 percent, according to the website Columbus Region. Jeff Zimmerman, director of the Columbus Region Logistics Council, notes, “We still have capacity for growth.”

But for that to happen, infrastructure bottlenecks need to be fixed and a larger workforce needs to emerge. Special attention is being given to both areas, especially now that logistics has become hot.

Long regarded as the low rung of manufacturing and retail, it now enjoys a vocational vogue, with computer algorithms and robotics central to the delivery of larger volumes and faster movement of goods. Columbus State has an associate degree program in supply chain management and the Fisher College of Business at Ohio State University has an undergraduate specialization in logistics management. Graduates of both programs are readily finding employment in the Columbus region.

The Columbus region’s high ranking in logistics starts with its location, providing a ten-hour driving window to 47 percent of the U.S. population. Columbus also boasts the lowest average hourly wage among major logistics centers in the Midwest, an attractive tax structure, and warehouse rents well below those of other metropolitan areas.

Rickenbacker International Airport, with its two 12,000-foot runways, and the Norfolk Southern Intermodal Facility, opened in 2008, have attracted a host of logistics operations. According to Three Scale Research, the Columbus region offers the greatest access to the U.S. market of any major domestic metro area.

Almost 100 years ago, the U.S. Department of Defense recognized that Columbus was a key distribution center, establishing in 1916 what is now the Defense Supply Center, in Whitehall adjacent to Port Columbus. It is one of three Inventory Control Points of the Defense Logistics Agency. (The other two are in Philadelphia and Richmond, Virginia.)

During World War II, the Whitehall center became the largest military supply installation in the world. Today its workforce of 2,900 maintains a supply chain of materials costing $3 billion annually. Admiral John King, DSC commander, says, “We have a great workforce here in Columbus. They are very skilled and have a strong work ethic.”

In today’s retail climate, a different war is being waged, with the expectation of same-day delivery becoming more commonplace. Zimmerman notes that logistics is driven by customer dictates. “It’s our quality of life,” he says. “It’s not that we’re entitled.” Consumers, in other words, have come to rely on shorter, dependable delivery times and will not tolerate delays.

Companies with corporate headquarters here not surprisingly run their logistics operations in the area. L Brands leads the way with 7,800 employees, followed by such others as Abercrombie & Fitch, Big Lots, and DSW. Other companies with logistics centers in the Columbus region number over 4,000. Altogether the local workforce involved in logistics comes to more than 75,000.

Several national companies based elsewhere also have fulfillment centers in the Columbus region. Harry & David, the specialty foods retailer based in Medford, Oregon, has been in its second facility, the Hopewell Campus in Hebron, 30 miles east of Columbus, since 1997. The 52-acre campus houses a customer service call center and distribution center for mail order and retail stores and has the capacity to employ 3,000.

More recently, Zulily, a Seattle-based flash sale website retailer primarily of children’s clothing, opened its fulfillment facility in Obetz near Rickenbacker airport in 2012. Verrall Dugger, network quality safety and security manager, says that the major reason for locating in the Columbus region besides location is the high caliber of the workforce.

“We want associates who recommend and suggest,” Dugger says. “We found that Columbus is one of the best areas for help.” Zulily, entirely an e-commerce retailer, does not warehouse an inventory but places orders with vendors only when they receive individual customer orders. Dugger says delivery time currently is no more than 10 days after an order is placed, but “we want to get it down to seven days.”

Yoga wear retailer lululemon athletica, based in Vancouver, British Columbia, is finishing work on its 310,000 square foot distribution center near Rickenbacker airport. George Tsogas, vice president of international distribution and logistics, says that the facility will enable the company to service 85 percent of its stores and customers within two days, according to an article in Modern Materials Handling. True to its calling, the distribution center includes a gym, yoga space, and personal trainers for its staff.

Roadways linking logistics centers to Rickenbacker and the interstates are a vital link in the chain—what Zimmerman calls “last-mile freight.” The Mid-Ohio Regional Planning Commission has attacked bottlenecks in the roadway system of the Columbus region, armed with TIGER (Transportation Investment Generating Economic Recovery) funds from the U.S. Department of Transportation. Recently completed are the diverging diamond interchange at Roberts Road and I-270, the Alum Creek Drive/Groveport Road-I-270 interchange, and the Pickaway East-West connector. Current projects are the I-270-U.S. 33 Dublin interchange, the I-270-U.S. 23 Worthington interchange, and I-670 downtown at the crisscrossing of I-70 and I-71.

Nick Gill of MORPC anticipates a 40- to 50-percent increase in trucking in the near future, making work on bottlenecks critical. “We can’t work in the now-world,” he says. “We have to build for tomorrow.” Dina Lopez of MORPC notes, however, that there remain funding shortages nationwide.

Those roads are currently packed with an aging population of truck drivers and the demand for more drivers is great. A new generation is needed. Answering that need is the Roads2Work program administered by the Central Ohio Workforce Investment Corporation/OhioMeansJobs-Columbus Franklin County.

Ninety-five participants completed a five-week training program in 2014, and 87 of them found trucking jobs with annual wages reaching $70,000. Jose Feliciano, COWIC director of workforce innovations, says, “The program has been attractive to those workers looking for a career change, the immigrant population, those with criminal records, and others who are interested in starting their own business.”

Of course more needs to be done. Zimmerman of the Columbus Region Logistics Council calls for “public school initiatives to increase visibility, interest and desire in fields of logistics.” Getting the word out to kids at an early age is vital. “We need to get to mom and dad and let them know about this pyramid of opportunity,” he says.

Beyond that is the ability of logistics centers to be flexible and to adapt to change. Any disruption in the supply chain can cause logistical havoc. The recent labor dispute in the ports of Los Angeles and Long Beach, for instance, has impacted production at Honda’s Ohio plants. Backup plans need to be in place. Alternative methods need to be available. The stakes are high for business—and they continue to get higher.

Dennis Read is a freelance writer.