Room for improvement Study: A new report by Johns Hopkins University says that Maryland's warehouse industry is doing well but could do a lot better.

Distribution

November 25, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Maryland's warehouse industry is booming, but the state could do much more to lure distribution jobs here, according to a new study by Johns Hopkins University's Institute for Policy Studies.

Distribution accounts for as much as 30 percent of the state's private sector employment -- more than 50 times the employment in biotechnology -- and contributes $28 billion annually to Maryland's economy, the study found.

"Maryland has made important progress in developing a significant distribution industry," said Dr. Maryann P. Feldman, an Institute for Policy Studies research scientist who discussed the study at a seminar Friday. "But there are many ways that we can further harness this potential engine for economic growth."

Maryland's distribution sector has grown because of a combination of factors, such as its strategic mid-Atlantic location that allows goods to reach one-third of the U.S. population within a 12-hour period; its transportation network and port; its available work force, and its relatively inexpensive land.

But to build on that success, Hopkins argues, the state will need to keep pace with the industry's technological advancements that are causing companies to focus almost exclusively on speed and flexibility.

"Goods at rest are a drain on profits," Feldman said.

Moreover, companies are beginning to integrate manufacturing with their logistics and distribution operations, and require locations where materials can be quickly transferred from boat or plane to truck and train.

And while recent relocations and expansions by Fila USA Inc., Saks Holdings Inc., McCormick & Co. and Staples Inc. appear to augur an improving distribution industry here, the Hopkins study believes statistics belie some of Maryland's success.

While the growth in Maryland's distribution sector is almost double the national average, rising at a rate of 5.9 percent annually, neighboring Virginia has outpaced that during the past 20 years.

"We make the short list in virtually every situation where a company is looking for a distribution facility in the mid-Atlantic region," said James T. Brady, secretary of the state's Department of Business and Economic Development. "But we have to keep pushing in an aggressive way."

Maryland also faces potential shortages of both available sites and a quality work force willing to accept jobs in the $8 to $12 per-hour range, Hopkins and several industry and commercial real estate officials predict.

"There's a tremendous concern that there are not enough sites of 40 acres and above," said J. Richard Latini, a vice president of Colliers Pinkard, a Baltimore commercial real estate company.

Additionally, Maryland could face a distribution crisis stemming from highway congestion and a lack of marketing. Hopkins would retool existing facilities and encourage development in Baltimore. The study urged that the state compile a master list of potential sites.

City officials, too, say they are working to boost warehouse development, which has been hampered by environmental contamination and obsolete buildings constructed before World War II.

"We have to take a look now at future land-planning issues, to identify sites for a second generation of distribution centers," said David W. Baird, a vice president of the Belt's Corp., a Baltimore industrial developer.

The Hopkins study also recommended that the state implement electronic toll stations and widen road shoulders to alleviate highway congestion, and create a task force to study potential avenues for growth.

Pub Date: 11/25/96

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