The Dayton region continues to land major warehouse and logistics operations, as Amazon and Chewy are planning new e-commerce distribution facilities with at least 300 and 600 “full-time equivalent” employees, respectively.
The logistics industry has had some of the biggest local job developments this decade — 1,300 jobs at Procter & Gamble, 600-plus at Caterpillar and several more. Local development officials say overall diversity of employers is key, but they’re happy to see logistics companies capitalize on Dayton’s strategic location as the e-commerce boom continues.
The I-70/I-75 intersection is within a day’s drive of well over 100 million people and is right next to a CSX rail line and an international airport with a foreign trade zone.
“The Dayton area is absolutely a hub for global supply chain and logistics. … It makes business sense for logistics companies to be here,” said Chris Kershner, executive vice president of the Dayton Area Chamber of Commerce. “We’re seeing the proof in the pudding when you have companies like Amazon, P&G, Caterpillar, Spectrum, Payless Shoes that are sticking a flag in the ground and saying this is where we want to be.”
What types of jobs?
While the number of jobs is impressive, some have questioned their quality, as some warehouse jobs — packagers, freight movers, order fillers — are part-time or have starting wages just over $10 per hour, according to Chamber of Commerce and Bureau of Labor Statistics data.
Kershner said the area’s workforce still has strong automotive and manufacturing roots despite losses in those industries, adding that those workers’ skills apply well to logistics and distribution work. But in a region where semiskilled workers used to make much higher wages in the auto industry, the adjustment can be hard to take.
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“You go back to 2002, and if you were an auto worker, you were making $25-35 an hour,” said Mark Jacobs, associate professor of operations and supply management at the University of Dayton. “The new UAW contract, post-2007, it’s more like $16-20 you’d be making (other than grandfathered workers). The warehouse jobs are running $11-18 per hour, so it’s about 20 percent less (than the new, lower wage).”
But Jacobs said the jobs are an important cog in the overall employment market, as “not everybody can be an engineer or computer programmer.” Richard Stock, director of UD’s Business Research Group, had a pragmatic approach to the thousands of logistics jobs, in the wake of automotive and manufacturing decline.
“Better to get these jobs rather than not have employment growth for high school graduates,” he said.
Dayton is not quite Plainfield, Ind., which has 32 million square feet of warehousing packed just west of the Indianapolis airport. But the region has seen a surge in logistics jobs, Kershner said.
A list from Montgomery County, including both pure logistics sites as well as distribution/manufacturing operations, included Fuyao (2,300 headcount), Dole in Springfield (900) and Meijer (700) in addition to a dozen others with at least 200 employees. Those numbers can fluctuate by season and demand.
And just this week, Kettering city officials said Amazon is close to bringing a last-mile delivery station to Kettering Business Park, while representatives of online pet retailer Chewy said original job estimates of 600 at their fulfillment center near the airport could double in three years.
Jacobs said for e-commerce companies trying to serve both East Coast and Midwest markets quickly, location models show Dayton as the ideal warehouse site.
“Consumer expectations have gone from, OK, it takes a week to get here if I order something, to, what do you mean it’s not here in 48 hours?” Jacobs said. “That’s really been over the past five years, and I think it’s been Amazon that’s really changed our perception of that.”
Erik Collins, director of community and economic development for Montgomery County, is happy with logistics growth, but his clear goal is having a diverse economy not reliant on one sector. Talking about the issue Thursday, he said he had just ducked out of a meeting aimed at better marketing the region to more businesses in information technology, sensors, defense and manufacturing.
“Look at the F-35 project at the Air Force base, look at Hematite in auto-parts manufacturing,” Collins said of recent high-tech and manufacturing gains in the region. “We’re happy to have Yaskawa here. They’re the future of a lot of different types of industries … and will require skilled jobs to install and build the robots.”
The Dayton Development Coalition actually projects 12 percent local growth in high-paying bio-sciences jobs in the next five years, compared to 4 percent in aerospace and data management, and only 3 percent in logistics.
Collins said the whole region is focused on recruiting high-tech businesses, as well as strategically building its workforce. An example is the Greene County Career Center, which plans to add specific aerospace education options after research showed job prospects tied to Wright-Patterson Air Force Base.
Segments of workforce
But Collins and Jacobs agreed the region needs job opportunities for all segments of the workforce, especially given a large number of semi-skilled residents. While Kershner touted an experienced workforce with a great work ethic, Jacobs said some employers struggle to find drug-free workers who show up on time every day.
Jacobs said that logistics/distribution jobs pay better than many retail and food service options, and have more upward mobility (to floor supervisor, warehouse manager or delivery contractor) than many old auto line-worker jobs had.
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The Dayton Area Logistics Association will hold its fourth annual southwest Ohio conference Wednesday at Sinclair Community College. The keynote speaker is Jane Tschanen, general manager of Amazon’s fulfillment center in Monroe, and sessions will focus on workforce issues, automated guided vehicles, plus tariffs and trade. Montgomery County joins nine private firms as event sponsors.
“The warehouse jobs are part of the fabric of the economy, but they’re not exclusively the economy, and they’re not going to be,” Collins said. “Over time, we’re going to continue to see more and more diversity in the economy.”