As e-commerce rises, Compton makes a play for more distribution centers
The shift to e-commerce became more evident this holiday season, as a growing number of Americans took to their computers, tablets and smartphones with their shopping lists.
The National Retail Federation's Thanksgiving Weekend Survey found that a million more Americans shopped online than in stores over Black Friday and the weekend that followed it.
Over the years, Southern California has benefitted from this shift in buying habits. The region's location made it particularly desirable, since the ports of Los Angeles and Long Beach receive much of the merchandise that is manufactured overseas. The Inland Empire has seen scores of logistics and distribution centers pop up, where online orders are processed and fulfilled. The online giant Amazon has three such centers there, which employ thousands of people.
But urban communities are poised to see an influx in jobs in the coming years too. The California Employment Development Department projects the "Transportation and Logistics" industry in Los Angeles County will have more than 56,000 job openings over the next seven years.
Some of those jobs are sure to go to Compton. The city will soon be home to a 1.1 million square feet distribution center and logistics facility. The Trammell Crow Company is developing the warehouse on a 60-acre piece of industrial land that was once a brickyard - so the site is called "The Brickyard". Trammell Crow's Managing Director Greg Ames says Compton is in an ideal location for a logistics operation.
"We’re just minutes away from the port of Los Angeles and Long Beach, so that means product can move out here to Compton and then turn around and go out to wherever else it needs to go in the supply chain," said Ames. "It can hit 10 million people in a 45-minute drive from here."
Trammell Crow officials wouldn't give estimates on how many people would be employed at the future distribution warehouse, but its size is similar to one of Amazon's warehouses in San Bernardino, which employs more than 1000 people.
Compton: bring on the jobs
Compton officials are confident that facilities like The Brickyard will bring needed jobs to the city. The city's unemployment rate has fallen steadily since the recession, but at 8.9 percent, it is still substantially higher than Los Angeles County's overall unemployment rate of 5.7 percent.
"We have the workers," said Compton Mayor Aja Brown. "We are really focusing on learning opportunities to create that skilled workforce to make certain that they can be trained and able to work right here in their own community."
A future tenant for The Brickyard site has not yet been announced, but Brown and other city officials enacted a community benefits agreement early on that requires the future tenant to make 35 percent of its new hires Compton residents. Trammell Crow is also putting $250,000 towards training locals for logistics jobs.
The Compton WorkSource Center and the nonprofit Community Career Development are offering an intensive six-month training program that prepares people for careers in logistics, or the movement of goods.
"I knew nothing about logistics, nothing about globally, locally moving products," said one of the participants, 54-year-old Sharon Persip, a Compton resident. "Just to understand the background of all that is just so very interesting to me."
Persip has worked as a respiratory therapist and in customer service. Her case manager at the Compton WorkSource center said her customer service background would be a good fit in logistics and recommended the training program.
Another program participant, 21-year-old Jose Duenas is also from Compton. He said he worked low-level jobs in some warehouses, and stocked shelves in a 99-cent store. Before beginning the program, he also thought he knew nothing about logistics.
"Then I realized I’d been doing logistics this whole time. So I was thinking maybe I could make a career out of it, instead of working just for minimum wage."
As part of the program, Duenas and Persip take classes in Logistics and Technology at East Los Angeles College, where Leo Medina is one of their instructors. He says entry-level warehouse jobs can be low-paying, but the logistics sector is ripe for career advancement for those who get training, learn quickly and stick with it.
"We are not talking about minimum wage," Medina said. "Experience and education will really earn you an excellent wage in the logistics industry. I’ve placed people that started off at $16 an hour, others at $21 an hour, and they’re moving on up."
"It’s one of those few careers where there’s a very low barrier to entry," said Dennis Garcia, another Technology and Logistics professor at East L.A. College. "It’s blue collar, with good entry-level pay, a very well-defined career ladder. "
The challenge of space
Compton and other urban communities face a challenge when it comes to finding land for logistics centers. Distribution centers require a lot of space, and there's not much industrial land left to develop in Compton or the rest of Los Angeles. This is one reason Amazon has set up shop in the Inland Empire.
Greg Ames of Trammell Crow says the greater South Bay real estate market where Compton sits is roughly 300 million square feet of industrial space, and only about 2 percent of that is vacant at a given time. "Everything is pretty much occupied," said Ames.
A 60-acre site like The Brickyard is a rarity, and Ames points out that it required a lot of environmental clean-up. Compton Mayor Aja Brown told KPCC, "It's really competitive to be able to locate there, and I know we'll see a great tenant moving in there soon."
Construction of the facility is slated for completion in August of 2016. Compton resident Sharon Persip said she likes the idea of starting her new career there, and after 16 years of driving to Irvine to work, finally having a short commute.
"I was making that drive every day, and I’m sick of it," she said. "I’d love to have this right around the corner from where I live...within walking distance."