Where Demand Moves, DCs Follow
Businesses are always keen to identify where populations are migrating and demand is building. Demographic shifts keep retail locations and distribution networks in constant flux. They also illuminate states that are attracting or losing people and business.
If Atlas Van Lines’ 2010 Migration Patterns study is any indication, consumers are on the move, and so are retailers and some manufacturers.
The moving company’s annual study reveals that the number of U.S. household moves is rising, a sign that the economy may be beginning to rebound.
For some states, the number of outbound moves is high. Due to unemployment, especially with declining manufacturing and automotive jobs, Rust Belt residents (Illinois, Indiana, Michigan, Pennsylvania, Ohio, West Virginia) continue to relocate elsewhere. By contrast, nearby states saw an increase in the number of inbound moves.
For the first time in two years, Kentucky joined its surrounding neighbors— North Carolina, Maryland, and Washington, D.C.— as inbound states. For the fifth year in a row, Washington, D.C. had the highest percentage of inbound moves, while Ohio claimed the highest percentage of outbound moves.
Regardless of economic highs and lows, several states have remained constant in status for 10 or more years. California, Kansas, and South Carolina have been balanced; Indiana remains outbound; and Alaska and North Carolina are primarily inbound.
Among other regions and states:
- Much of the West remains balanced. For the first time in three years, Idaho moves from an outbound state to a balanced state, joining California, Oregon, Washington, Nevada, Montana, Colorado, Utah, and Arizona.
- For several states, economic ups and downs have had little influence on the number of residents moving in or out. For 10 or more years, six states— California, Alaska, North Carolina, Kansas, South Carolina, and Indiana— have remained constant in their inbound, outbound, or balanced status.
- Despite high foreclosure rates and poor housing sales, a large pocket of southeastern states, including Florida, Alabama, Georgia, and South Carolina, saw no drastic increase in outbound moves; in fact, they remained relatively balanced. Why so little change? They remain popular as retirement destinations, according to Atlas.
Inbound transportation dynamics among manufacturers, distributors, and retailers are changing, according to recent trade data.
In July 2010, Boston-based research firm Aberdeen Group surveyed 155 manufacturing, wholesale distribution, and retail companies, documenting their processes and capabilities regarding inbound transportation as part of a broader study— Collaborative Inbound Transportation: Managing Inbound Product Flows from Source to Consumer. The top two activities dominating current transportation services include domestic shipping (92 percent) and importing (88 percent) on the inbound supply side, the report shows.
Survey respondents identify shipping direct-to-consumer (65 percent), direct-to-store (44 percent), and through 3PL or e-fulfillment providers (45 percent) as key inbound transportation and logistics activities.
“Increased costs and the growing need for control have elevated inbound transportation to new levels of focus,” says Bob Heaney, senior research analyst for supply chain management at Aberdeen Group.
“Executing more volume in a cross-channel logistics environment, and controlling inbound freight, shifts the priority of ‘transportation management/cost focus’ more heavily to the inbound, rather than the outbound, side of transportation,” he adds.
The report focuses on planning and executing inbound transportation and supplier/partner product flow across an increasingly global, multi-tier, and cross-channel distribution network. Growing prominence of cross-channel logistics and fulfillment is driving a significant trend toward visibility, collaboration, and optimization of inbound transportation across all three segments.
A State of Union and Division
President Obama’s 2011 State of the Union address raised some important domestic issues, ranging from job growth and energy development to fixing dilapidated transportation infrastructure, among other needs.
In its viral aftermath, industry lobbies have been saturating the Internet with their own huzzahs and harrumphs concerning the President’s roadmap for the future. Here’s what a range of industries had to say about bringing this vision home.
“The Coalition Against Bigger Trucks (CABT) applauds the President for recognizing the state of the nation’s infrastructure and his call to fix crumbling roads and bridges. It’s ironic, however, that while he is highlighting this national problem, we have seen a bill introduced in the Senate that would lead to 100,000-pound trucks traversing roads in Maine and Vermont that are part of the National Highway System. These trucks would be 20,000 pounds heavier than the current Federal weight limit on trucks. How could this possibly be good for our crumbling roads and bridges?”
—Curtis Sloan, director of public policy, CABT. CABT is a grass-roots organization that works nationally to unite communities against legislation that allows bigger, heavier trucks on U.S. roads.
“We share President Obama’s view that moving more people and goods by rail is good for America. We look forward to working with the Administration to find ways to maintain our world-class freight rail network as we strive to meet the needs of U.S. business and passengers today and in the future.”
—Edward R. Hamberger, president and CEO, the Association of American Railroads (AAR). The AAR represents North American railroads and Amtrak.
“While there will be differences on how to achieve these goals, we must find enough common ground to ensure America’s greatness into the 21st century. Our country and our economy will succeed only when the Administration, Congress, the business community, and active citizens work together. The U.S. Chamber will work with anyone who shares our goals and we don’t care who gets the credit.”
—Thomas Donahue, president, U.S. Chamber of Commerce. The U.S. Chamber of Commerce is the world’s largest business federation, representing the interests of more than three million companies.
“The attention given to the woeful state of America’s infrastructure of public highways, bridges, airports, and waterways is a welcome change from the pork-barrel earmarks of spending by political influence… Our national infrastructure trust funds, such as the Highway Trust Fund, literally center on the word ‘trust.’”
—Joel D. Anderson, president and CEO, International Warehouse Logistics Association (IWLA). The IWLA serves as a unified voice for the value-added warehouse logistics industry, representing third-party warehouses and logistics providers.
“The speech was a missed opportunity. The President focused on job growth through federal spending, but was silent on one of the best ways to create jobs: allow more energy development.”
—Jack Gerard, president and CEO, American Petroleum Institute (API). The API represents more than 450 oil and natural gas companies.