Top Metro Areas for Distribution Centers in 2019

Josh Bays

Josh Bays | October 22, 2019

Site Selection Group, a leading location advisory, real estate and economic incentive services firm, analyzed the 100 of the largest metropolitan areas in the United States to determine which markets offer distribution and logistics operations the best mix of critical workforce skills, consumer access and transportation infrastructure to ensure operational success now and in the future.

Workforce availability

Distribution centers often have high job-count numbers and demand, especially those facilities that have seasonal hiring demands. Having a qualified workforce with experience in picking, packing, scanning, forklift and conveyor operation is essential to establishing an efficient distribution operation. Site Selection Group incorporated both the count and concentration of core distribution center occupations within each metro area into this analysis.

Specifically, Site Selection Group analyzed the following occupations: conveyor operators and tenders; industrial truck and tractor operators; laborers; and freight, stock, and material movers; machine feeders and offbearers; packers and packagers. Distribution centers may be able to pull from a variety of other occupations for less skilled labor; however, the occupations listed here represent the foundation on which an efficient logistics workforce is built.

Importance of consumer access

As customers continue to demand faster and less expensive shipping options, locating a new distribution center within one day’s drive time of a large consumer base is essential. Site Selection Group used its best-in-class GIS databases to measure the population that lives within a one-day drive time of every metropolitan area analyzed.

Changes in population demographics

Forward-thinking companies utilize strategies that account for future population changes. By following population growth, distribution centers can stay ahead of demographic changes and remain close to their customer bases. It is critical to ensure that the population is growing not just within the metro area, but also within the geographic area the distribution center aims to serve. Site Selection Group utilized the same tools as above to measure population growth within a one-day drive time of select metro areas.

Transportation infrastructure is key

Finally, Site Selection Group took an in-depth look at each metropolitan area’s transportation infrastructure. Trucking is the most important method of transportation for most distributors.  According to the Bureau of Transportation Statistics, approximately 70% of freight by weight is moved via truck annually. Each metropolitan area was analyzed for the presence of an interstate, and further, whether the metro area had access to primary north/south and east/west interstate routes.

Additionally, each community was evaluated for its air and rail accessibility by identifying those that had international air capabilities and an intermodal facility served by a major rail carrier.

Real estate price and availability

As real estate tightens across the nation, industrial availability shrinks while prices rise. Therefore, it is critical for operations to evaluate industrial real estate conditions in the markets it is considering, to ensure that they make the optimal decision.

Results of analysis

The list below shows the top 25 metro areas for distribution based on Site Selection Group’s analysis. These communities have an international airport, north/south and east/west interstate access, positive population growth, and a significant presence of key distribution workers.

Metro Area Population within 1 Day Drive-Time Population Growth within 1 Day Drive-Time Distribution Worker Count Distribution Worker Concentration Industrial Real Estate Availability Industrial Real Estate Market Rent
Memphis, TN-MS-AR 143,667,709 3.69% 51,394 2.78 5.6% $3.86
Dallas-Fort Worth-Arlington, TX 73,337,362 5.25% 121,909 1.18 6.2% $6.59
Atlanta-Sandy Springs-Alpharetta, GA 135,107,843 3.22% 108,819 1.41 5.3% $6.00
Harrisburg-Carlisle, PA 149,832,227 2.33% 18,730 1.99 8.3% $5.62
Indianapolis-Carmel-Anderson, IN 173,103,740 2.43% 58,669 1.99 3.8% $5.68
Louisville/Jefferson County, KY-IN 167,656,240 2.51% 34,236 1.87 4.9% $4.80
Houston-The Woodlands-Sugar Land, TX 59,657,120 5.51% 80,699 0.92 6.6% $7.36
Charlotte-Concord-Gastonia, NC-SC 159,576,185 2.80% 44,838 1.28 6.3% $6.07
Columbus, OH 173,537,014 2.33% 46,095 1.52 5.1% $5.20
Cincinnati, OH-KY-IN 176,973,005 2.42% 39,733 1.30 4.7% $5.35
Riverside-San Bernardino-Ontario, CA 51,926,779 3.82% 97,618 2.15 4.4% $9.11
Nashville-Davidson-Murfreesboro-Franklin, TN 164,638,942 3.17% 41,396 1.45 3.9% $7.63
Stockton, CA 58,886,198 4.11% 18,332 2.47 5.2% $6.74
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 130,373,060 2.24% 84,488 1.03 5.0% $7.15
Baltimore-Columbia-Towson, MD 147,919,171 2.41% 32,867 0.82 7.9% $7.99
El Paso, TX 43,140,563 7.08% 7,733 0.79 6.9% $5.98
San Antonio-New Braunfels, TX 51,111,036 6.00% 23,569 0.76 7.5% $7.92
Kansas City, MO-KS 118,588,395 3.56% 28,781 0.94 5.8% $5.45
McAllen-Edinburg-Mission, TX 38,613,646 7.04% 6,100 0.76 6.6% $6.42
Scranton-Wilkes-Barre, PA 134,103,861 2.09% 17,769 2.42 8.1% $4.83
St. Louis, MO-IL 135,006,499 2.63% 36,654 0.93 5.2% $5.48
Pittsburgh, PA 161,844,586 2.28% 25,535 0.78 5.9% $7.13
Jackson, MS 121,686,986 4.29% 6,228 0.80 5.5% $5.47
Birmingham-Hoover, AL 154,142,176 3.77% 13,233 0.93 3.4% $5.29
Phoenix-Mesa-Chandler, AZ 53,305,553 4.00% 53,843 0.89 6.8% $8.29

Source:  BNSF, Union Pacific, Kansas City Southern, Canadian National, CSX, EMSI, Experian

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