Research Report. Transportation/Logistics Industries Employment and Workforce. in San Bernardino and Riverside Counties

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1 Research Report Transportation/Logistics Industries Employment and Workforce in San Bernardino and Riverside Counties MAY 2011

2 This research report is a contribution of the following partners who worked collaboratively on this project: The San Bernardino and Riverside Counties Economic and Workforce Development agencies initiated, funded and coordinated the labor market survey of Inland Empire businesses, including those in Transportation/Logistics industries. ERISS Inc. executed the survey of the Inland Empire businesses. Regional Center of Excellence, a labor market research initiative of the California Community Colleges Economic and Workforce Development Program, analyzed the data compiled for transportation/logistics industries and prepared this report of survey findings. For more information about this report, please contact Zhenya Lindstrom, Director of the Regional Center of Excellence at San Bernardino Community College District, , Page 2

3 Contents INTRODUCTION... 4 RESEARCH GOALS:... 4 SURVEY SCOPE AND METHODOLOGY... 4 INDUSTRY & EMPLOYMENT OVERVIEW... 5 TYPE OF COMPANY/ORGANIZATION... 7 EMPLOYMENT: CURRENT AND PROJECTED... 7 OCCUPATIONAL EMPLOYMENT... 8 OCCUPATION REQUIREMENTS ECONOMIC DEVELOPMENT NEEDS CHALLENGES AND CONCERNS SUMMARY AND CONCLUSIONS APPENDIX A: INDUSTRY REPRESENTATION APPENDIX B: TOP 30 TRANSPORTATION/LOGISTICS OCCUPATIONS IN INLAND EMPIRE Page 3

4 Introduction In the Fall of 2010, the County of Riverside Economic Development Agency and the County of San Bernardino Economic Development Agency jointly sponsored a region-wide business survey of the industries critical to the Inland Empire economy. The purpose of the survey was to understand the drivers and the needs of these sectors to inform strategies aimed at enhancing economic vitality of the region. Transportation/Logistics industries cluster was identified as one of the key sectors of focus. The findings from the survey of this cluster are summarized in this research report. Research Goals: Analyze workforce skills attainment levels and gaps in the Inland Empire region. Improve the understanding of the needs and perspectives of local businesses. Measure employer staffing needs. Identify and address the immediate concerns of individual businesses. Identify businesses at risk of downsizing and/or relocating. Identify existing and potential niche opportunities in order to enhance linkages with workforce and economic development partners and initiatives. Identify strategies and necessary to create sustainable workforce environment for Inland Empire residents and businesses. Survey Scope and Methodology The survey targeted employers with 5 or more employees. ERISS Corporation conducted the survey using a proprietary Computer Aided Telephone Interviewing (CATI) system. A stratified census style survey methodology was employed whereby an attempt was made to contact every business within the survey parameters, with the final sample representative by size and industry cluster of the population of businesses in the local region. The final contact database was comprised of 14,558 employers. These employers were stratified according to North American Industry Classification System (NAICS) codes into pre-determined targeted industry clusters or geographic locations 1 (see Table 1 below). During the survey process 2,957 of these businesses were found to be out of scope 2 of the survey, resulting in a net employer base of 11,601. Of these employers, 3,358 participated in the survey resulting in a 29% response rate. The Transportation/Logistics industries were represented by 261 respondents, which constituted approximately 2% of all regional businesses in this cluster. 1 NAICS codes for each industry cluster and region are provided in Appendix A 2 Out of scope responses included employers with wrong phone number and no new number, no answer on repeated attempts, and employers with less than 5 employees. Page 4

5 Industry & Employment Overview In total, 247 survey responses were collected from the Inland Empire transportation/logistics industries firms in response to occupation and employment questions 3. Of these responses, 182 came from San Bernardino County (7) while Riverside County supplied only 65 responses (26%). Table 1 displays the industries that were represented by the survey participants, at the 3-digit North American Industry Classification System (NAICS) code level, along with the number of responses for each industry and the total number of industry establishments in the Inland Empire. Table 1 Industry representation (Sorted by Number of Responses) NAICS Code NAICS Description # of establishments* # of survey respondents** Response rate Share of responses 484 Truck Transportation 1, % 38% Professional, Scientific, and Technical Services Testing Laboratories Process, Physical Distribution, and Logistics Consulting Services Other Scientific and Consulting Services Research and Development in Biotechnology Motor Vehicle and Parts Dealers % % 11% Transit and Ground Passenger Transportation Support Activities for Transportation % 10% % 493 Warehousing and Storage % Merchant Wholesalers, Durable Goods Automobile and Other Motor Vehicle Merchant Wholesalers Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers % 3% Other 2, % 8% Total 7, % *Source: Info USA through ESRI, **Source: ERISS, The total number of businesses responding to the survey was 261; of those responding, 247 answered questions related to occupations and employment projections. Page 5

6 As shown in Table 1, the industry with the largest number of businesses in the area, Professional, Scientific and Technical Services, was represented by 41 survey respondents (17% of total responses). Additionally, the Truck Transportation industry was represented by 95 participating businesses (with the largest share, 38%, of total responses). As a result, it is important to note that the job figures cited in the Occupational Employment section of this report will be reflective of the prevalence of responses from the Trucking industries compared to those from other Logistics and Transportation related segments. Figure 1 displays the responses of industries at the 4-digit NAICS level. General freight trucking establishments provided the largest share (one-third) of survey responses. An equal number of responses was received by Management, scientific, and technical consulting services, Specialized freight trucking, Architectural, engineering, and related services, and Automobile dealers 6% each. The category of Other includes industries with less than one percent of responses, such as Other chemical product and preparation manufacturing, Electrical equipment manufacturing, Machinery, equipment, and supplies merchant wholesalers, and Charter bus industry. Figure 1 - Respondents by industry group General Freight Trucking Mgt, Scientific & Technical Consulting Svcs Specialized Freight Trucking Architectural, Engineering, and Related Services Automobile Dealers Automotive Parts, Accessories, and Tire Stores Scientific Research and Development Services Warehousing and Storage Other Transit and Ground Passenger Transp. Freight Transportation Arrangement Other Support Activities for Transportation Motor Vehicle and MV Parts & Supplies Merch Whlslers Taxi and Limousine Service Automotive Repair and Maintenance Couriers and Express Delivery Services Interurban and Rural Bus Transportation Other 6% 6% 6% 6% 5% 3% 3% 2% 2% 2% 2% 8% 32% Page 6

7 Type of Company/Organization As mentioned, the survey only targeted establishments with 5 or more employees. Among the ones responding to the survey, nearly half (47%) were relatively small firms, with 5 to 15 employees, followed by 3 of the firms that employ between 16 and 45 individuals. Relatively large businesses, with more than 105 employees, make up only 9% of the responding transportation/logistics businesses. Figure 2 demonstrates the variety of responding transportation/logistics employers in the region by size of employment. Figure 2 - Size of transportation logistics employers surveyed 3% 5% Number of Employees 7% % >200 Employment: Current and Projected Transportation/Logistics firms in the Inland Empire who participated in the survey reported a total current employment of 13,061, where the San Bernardino County establishments account for about 79% of the total jobs in the region. However, the jobs are projected to grow at a relatively faster rate in Riverside County (4.7% 12-month growth; 134 new jobs) compared to San Bernardino County with 1.9% growth or 211 new jobs. Table 2 Projected employment in Transportation/ Logistics in the Inland Empire Location Current Jobs Projected Jobs in 12mos. New Jobs % Growth Riverside (n=65) 2,689 2, % San Bernardino (n=182) 10,372 10, % Inland Empire (n=247) 13,061 13, % Source: ERISS, 2010 For the Inland Empire as a whole, 345 new jobs are expected to be added in the Transportation/Logistics sector by the end of With this added employment, the total number of Transportation/Logistics jobs in the responding businesses within the Inland Empire will exceed 13,400. Actual job growth may be larger than reported as this survey includes only existing businesses. The addition of several new logistics operations is expected to increase the number of new jobs in the area. Page 7

8 Occupational Employment To assess employment in the Transportation/Logistics industries, respondents were asked about their staffing using general occupational titles. Table 3 provides aggregated responses for the largest occupations by current employment in the sector. The table summarizes the following information: number of currently employed individuals in each occupation for all responding businesses, number of individuals that are projected to be employed in each occupation in 12 months, percentage job growth, a preferred level of experience and education most commonly reported by the firms. Table 3 Top 15 Occupations by Employment in Transportation/Logistics in the Inland Empire Occupation Heavy and Tractor-Trailer Truck Drivers Current Jobs Projected Jobs % Growth Experience Preferred 2,041 2, % 2-4 years none Education Preferred School Bus Drivers % none High School / GED Hand Packers and Packagers % none High School / GED General Maintenance and Repair Workers % 2-4 years none; High School/ GED Cargo and Freight Agents % 2-4 years High School / GED Diesel Engine Mechanics % 1-2 years High School / GED Vehicle Salespersons % none none Forklift Operators % 1-2 years High School / GED Dispatchers % 1-2 years; 2-4 years High School / GED Truck Drivers, Light or Delivery Services % 2-4 years High School / GED; License / Certification Automotive Mechanics and Technicians Couriers and Messengers % Taxi Drivers and Chauffeurs % % 2-4 years; 4-10 years none none; 6 months - 1 year; 1-2 years none; 3-6 months; 2-4 years; 4-10 years High School / GED none; High School/ GED Parts Salespersons % none High School / GED Team Assemblers* % 2-4 years High School / GED Source: ERISS, 2010 *Team Assemblers should be considered to be an outlier As Table 3 and Figure 3 show, Heavy and Tractor-Trailer Truck Drivers is the largest occupation in the Inland Empire, with more than 2,000 individuals employed by the responding businesses. Figure 3 also reveals that the fastest growing occupations are Forklift Operators (7.7%), and Vehicle Salespersons (7.0%), followed by Cargo and Freight Agents. Although it is the largest occupation, Heavy and Tractor-Trailer Truck Drivers also have the highest annual turnover rate of 40% (Figure 3). Page 8

9 The top 15 occupations vary in years of previous experience but almost all indicate that employees must at least complete high school or obtain a GED. Conversely, 8 of the top 15 occupations require 2-4 years of prior work experience and 2 occupations prefer 4-10 years of experience. According to labor market data collected from Economic Modeling Specialists, Inc (EMSI), employment projections for the Inland Empire are not closely aligned with occupational trends produced from survey responses. Among the top 5 occupations provided by surveyed businesses, only one (Heavy and tractor trailer truck drivers) ranks in the top 10 for the Inland Empire as a whole (See Appendix B). EMSI data produced the following list of the largest ten occupations by employment in the two-county area: Truck drivers, heavy and tractor-trailer (21,904 in current jobs, with growth in 5 years) Laborers and freight, stock, and material movers, hand (10,415; 3%) Automotive service technicians and mechanics (7,285; 1%) Truck drivers, light or delivery services (6,575; 3%) Management analysts (5,110; 7%) Cashiers, except gaming (4,617; -2%) Retail salespersons (4,498; 2%) Industrial truck and tractor operators (3,802; 5%) Cleaners of vehicles and equipment (3,567; 2%) First-line supervisors/managers of retail sales workers (3,191; 1%) 50% Figure 3 - Largest or fastest growing occupations (1) Heavy Truck Drivers 40% (1) (2) School Bus Drivers (3) Hand Packers and Packagers 30% (7) (4) Maintenance & Repair Workers Turnover Rate 20% (10) 10% (9) (6) (2) (5) (8) (4) 0% (3) -2% 2% 6% 10% (5) Cargo and Freight Agents (6) Diesel Mechanics (7) Vehicle Salespersons (8) Forklift Operators (9) Dispatchers -10% Projected Growth (10) Truck Drivers, Light or Delivery Page 9

10 Occupation Requirements Surveyed businesses were asked about the level of work experience preferred for occupations in their industry. Of those responding, one-fourth requires 2-4 years of experience, one-fifth does not require prior work experience, and one-fifth indicated a need of 1-2 years of work history. Figure 4 provides all levels of required work experience as reported by surveyed businesses. Figure 4 - Preferred work experience None Under 3 months 3-6 months 6-12 months 1-2 years 2-4 years 4-10 years 10+ years Don t know Businesses were also asked to indicate their preferred level of education for identified occupations. A high school education/ged is the most desired education level, indicated by half of all respondents. A bachelor s degree and some college were given equal consideration by 10% of respondents each. In sum, approximately 30% of respondents reported the need for at least some level of college education. Figure 5 displays all preferred education levels as provided by surveyed establishments. Figure 5 - Preferred education level High school / GED 50% None 15% BS / BA Some college License / Certificate Associate degree Graduate degree Don t know 10% 10% 7% 1% 3% Page 10

11 Economic Development Needs Transportation/Logistics establishments were asked to identify factors in the Inland Empire that attracted their business. Of the businesses surveyed, 45% indicated that location was the main reason for establishing business in the area. Proximity to customers was reported as an attractive feature by 18% of respondents. Some of the areas identified by survey respondents as needing improvement include utility costs and a quality workforce. Figure 6 - Business attraction factors Location Proximity to Customers Cost of Land / Facilities Friends and Family Quality of Life Business Incentives Proximity to Supplies Proximity to Quality Universities Ample Supply of Labor Quality Workforce Utility Costs Other Don't Know 18% 1 10% 8% 5% 3% 2% 12% 22% 45% Establishments in Transportation/Logistics were asked about future plans for their business. Over half of respondents (58%) reported no plans for change while one-fifth anticipated expanding their business operations. Figure 7 provides the summary of responses from surveyed establishments. Figure 7 - Future plans for expansion/downsizing/closing 17% 2% 0% None / No Change Expansion Don t know 19% 58% Downsizing Relocation outside of the Region Closing Page 11

12 To assess development needs, businesses that anticipated an expansion were asked what they would need for such expansion. Transportation/Logistics firms reported the greatest need for additional employees (22%), equipment (15%), and new/expanded facilities (12%). Other needs included increased market visibility, staff development or, and new technology (10% each). Table 4 presents all expansion needs reported by surveyed businesses. Table 4 - Expansion needs Need % respondents Additional Employees 22% Equipment 15% New/expanded facilities 12% Increased Visibility in the Marketplace 10% Staff Development/Training 10% New Technology 10% Access to Capital or Credit 9% Challenges and Concerns Inland Empire businesses were asked about key concerns or challenges that they currently face in their operation. The most highly rated concern was the cost of employee benefits (3), followed by declining sales (32%), and worker compensation expenses (2). Workforce challenges identified by responding businesses included the ability to retain employees and the lack of a qualified workforce. Figure 8 illustrates all reported concerns. The Other category in Figure 8 includes such challenges as access to suppliers and business affected by foreign trade. Figure 8 - General business concerns Employee Benefits Costs Declining Sales High Worker Compensation Taxes Utility Costs Availability of Capital/Credit Ability to Retain Employees Transportation Issues Lack of Qualified Workforce Insufficient Room for Expansion Permitting and Zoning Expiring/Lack of Incentives Other 15% 15% 12% 11% 8% 7% 6% 6% 17% 2 22% 3 32% Page 12

13 Respondents were also asked to identify current concerns for the Transportation/Logistics industries. Firms in the Inland Empire cite the primary concern of AB32 requirements, reported by about one-fourth of businesses. The second largest concern is the availability of qualified workers, reported by 1 in 6 businesses. The issue of a lesser concern for the transportation industry is local infrastructure cited by only eight percent of responding firms. The complete set of industry concerns is provided in Figure 9. Figure 9 Concerns specific to Transportation/Logistics industries AB32 requirements 23% Availability of qualified workers 16% Public awareness of transportation programs 10% Local infrastructure 8% Other 12% Summary and Conclusions The Transportation/Logistics industries in the Inland Empire were represented by 261 total survey responses and 247 responses for employment and workforce specific questions. In the Inland Empire region as a whole, there are over 14,000 related firms. The survey responses are representative of all identified industries within the sector in the region. Nearly half of all responding businesses (47%) employ 5-15 employees and one-third employ employees. Total jobs represented by the survey respondents are projected to number 13,406 in 2011, an increase of 345 new jobs from Based on survey responses, Riverside County is expected to experience a larger percentage growth over the 12 month period as compared to San Bernardino County. Job projections obtained from EMSI indicate that Truck drivers, heavy and tractor-trailer are the largest occupation group in the Inland Empire representing over 22,000 jobs in The next largest occupation group in the region, reported by EMSI, is Laborers and freight, stock, and material movers with over 10,000 jobs in the same year. Education requirements for 12 of the 15 identified occupations are a high school diploma or GED. Work experience responses indicate that employers largely require 1-2 or 2-4 years of experience for related occupations. In the Inland Empire, Heavy and tractor-trailer truck drivers are the largest occupation group. The majority of Transportation/Logistics businesses (58%) have no plans to expand, downsize, or relocate. Businesses that are considering expansion (19%) cited additional employees as their most important need. The main concerns for identified industries include AB32 requirements and the availability of qualified workers. Page 13

14 Appendices Appendix A: Industry Representation The table below provides the total number of industry establishments in the Inland Empire in addition to the number of survey respondents for each sector, the share of responses by sector, and the response rate by sector. The largest share of responses (6) was received by the Transportation and Warehousing sector. NAICS code/description Manufacturing All Other Misc. Chemical Product and Preparation Manufacturing Motor and Generator Manufacturing All Other Misc. Electrical Equipment Manufacturing Automobile Manufacturing Heavy Duty Truck Manufacturing 42 Wholesale Trade Automobile and Other Motor Vehicle Merchant Wholesalers Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers 44 Retail Trade New Car Dealers Automotive Parts and Accessories Stores Other Gasoline Stations Transportation and Warehousing General Freight Trucking, Local General Freight Trucking, Long Distance Used Household and Office Goods Moving Specialized Freight (except Used Goods) Trucking, Local Specialized Freight (except Used Goods) Trucking, Long Distance Other Urban Transit Systems Interurban and Rural Bus Transportation Taxi Service Limousine Service School and Employee Bus Transportation Charter Bus Industry Special Needs Transportation All Other Transit and Ground Passenger Transportation Other Airport Operations # of establishments* # survey respondents** Response rate Share of responses % 3% % 3% 1, % 12% 2, % 6 Page 14

15 Appendices NAICS code/description # of establishments* # survey respondents** Response rate Share of responses Motor Vehicle Towing Other Support Activities for Road Transportation Freight Transportation Arrangement All Other Support Activities for Transportation Couriers and Express Delivery Services General Warehousing and Storage Refrigerated Warehousing and Storage Other Warehousing and Storage 54 Professional, Scientific, and Technical Services Testing Laboratories Process, Physical Distribution, and Logistics Consulting Services Other Scientific and Technical Consulting Services Research and Development in Biotechnology 81 Repair and Maintenance General Automotive Repair % 1,877 <10-2% *Source: Info USA through ESRI, **Source: ERISS, 2010 Total 7, % Page 15

16 Appendices Appendix B: Top 30 Transportation/Logistics Occupations in Inland Empire The table below provides statistics for the top 30 occupations in the identified Transportation/Logistics industries in the Inland Empire. Occupations that survey respondents reported job data for are highlighted. Heavy and tractor-trailer truck drivers are the largest occupation group both among the survey respondents and the Inland Empire as a whole (see Table 3). Automotive service technicians and mechanics are the 3 rd largest occupation group among all establishments in the Inland Empire but rank 11 th among survey respondents. NOTE: The following occupations, identified by surveyed establishments, are not captured in the top 30 occupations in the Inland Empire for Transportation/Logistics industries: General maintenance and repair workers, Cargo and freight agents, Dispatchers, Couriers and messengers, and Team Assemblers. SOC Code Description 2010 Jobs Truck drivers, heavy and tractortrailer Laborers and freight, stock, and material movers, hand Automotive service technicians and mechanics Truck drivers, light or delivery services 2011 Jobs % Change 2010 Median Hourly Wages Education level 21,904 22,703 $19.30 Moderate-term onthe-job 10,415 10,735 3% $10.97 Short-term on-the-job 7,285 7,350 1% $18.77 Postsecondary vocational award 6,575 6,744 3% $15.21 Short-term on-the-job Management analysts 5,110 5,483 7% $20.65 Degree plus work experience Cashiers, except gaming 4,617 4,532-2% $9.53 Short-term on-the-job Retail salespersons 4,498 4,596 2% $9.71 Short-term on-the-job Industrial truck and tractor operators Cleaners of vehicles and equipment First-line supervisors/managers of retail sales workers 3,802 3,980 5% $14.43 Short-term on-the-job 3,567 3,655 2% $10.05 Short-term on-the-job 3,191 3,209 1% $15.53 Work experience in a related field Managers, all other 3,154 3,313 5% $15.00 Work experience in a related field Office clerks, general 3,097 3,174 2% $13.08 Short-term on-the-job Stock clerks and order fillers 2,545 2,646 $10.55 Short-term on-the-job Shipping, receiving, and traffic clerks 2,309 2,379 3% $13.66 Short-term on-the-job General and operations managers 2,140 2,180 2% $42.61 Degree plus work experience Bookkeeping, accounting, and auditing clerks 2,070 2,125 3% $16.02 Moderate-term onthe-job Page 16

17 Appendices SOC Code Description 2010 Jobs 2011 Jobs % Change 2010 Median Hourly Wages Education level Packers and packagers, hand 2,054 2,154 5% $9.50 Short-term on-the-job Parts salespersons 2,019 2,033 1% $15.93 Moderate-term onthe-job Automotive body and related repairers Bus and truck mechanics and diesel engine specialists First-line supervisors/managers of non-retail sales workers 1,848 1,879 2% $16.99 Long-term on-the-job 1,778 1,804 1% $20.02 Postsecondary vocational award 1,725 1,771 3% $18.59 Work experience in a related field Customer service representatives 1,622 1,697 5% $15.73 Moderate-term onthe-job 1,544 1,598 3% $ First-line supervisors/managers of helpers, laborers, and material movers, hand Sales representatives, wholesale and manufacturing, except technical and scientific products First-line supervisors/managers of office and administrative support workers 1,434 1,456 2% $ ,351 1,400 $22.45 Work experience in a related field Moderate-term onthe-job Work experience in a related field Tire repairers and changers 1,323 1,327 0% $12.62 Short-term on-the-job Bus drivers, school 1,318 1,342 2% $13.89 Short-term on-the-job First-line supervisors/managers of mechanics, installers, and repairers 1,239 1,250 1% $29.11 Work experience in a related field Taxi drivers and chauffeurs 1,211 1,245 3% $11.72 Short-term on-the-job Civil engineers 1,200 1,222 2% $41.24 Bachelor's degree Source: EMSI Complete Employment 1 st Quarter 2011 Page 17

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