Molly Davis, Staff Writer
Posted: 06/18/2011 10:13:41 PM PDT

REDLANDS – A report by the University of Redlands’ School of Business suggests that the Inland Empire’s reliance on the logistics industry may be a risk, depending on the economy.

“Is Southern California Too Dependent on Logistics?” is the title of the report that was published June 13 by the U of R’s Institute for Spatial Economic Analysis. In the report, Avijit Sarkar and Johannes Moenius explore the pros and cons of a logistics-heavy local economy.

Warehousing and transportation, which make up the logistics field, depend on consumption, as well as importing and exporting. The report looks at how logistics fares in a recession, when people consume less, Sarkar said.

“We wanted to look at Southern California, indeed the entire nation, through the lens of employment in the logistics sector and find out areas that are specialized in logistics,” he said. “More importantly, how, if at all, does specialization in logistics impact local economies?”

Sarkar and Moenius’s research showed that the Inland Empire in particular shows a large number of logistics-based businesses, due in part to the high volume of warehouses in the area.

Using ZIP code and GIS analysis, the data in the report is broken down by ZIP code, and not just by city, suggesting that some areas within cities are more logistics-concentrated than others.

“In our work, we have found evidence of a whole corridor highly specialized in logistics employment in the Inland Empire,” Sarkar said. “It is spanned by two major traffic arteries – the I-10 and the CA-60, and includes ZIP codes in the cities of Chino, Mira Loma, Fontana, Bloomington, Rialto and Moreno Valley among others.”

In fact, the report says that seven out of the top 10 areas that concentrate in logistics are found in the Inland Empire. The reason, the report suggests, is the advantage of numerous freeways, railroads and airports in the area.

And the employment rates in these areas show the degree to which the Inland Empire relies on logistics.

“The employment share of logistics in each of these ZIP codes is at least 17 times higher compared to the average employment share of logistics in Southern California,” the report said.

But whether the higher level of logistics in the area is a benefit is debatable, researchers have said.

“Too much specialization in logistics is a double-edged sword,” said Sarkar. “It can mean that an area enjoys a competitive advantage in logistics activity (leading to) better jobs (and) better wages, thus propelling the economy of a city or region on a path of economic prosperity.

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