Philadelphia and Lehigh Valley Positioned Among the Best Markets for Labor Supply and Labor Affordability

The rapid growth of e-commerce is forecast to create demand for another 452,000 warehouse and distribution workers in the U.S. this year and next, signaling an acceleration of job growth in the already labor-strapped industry, according to a new report from CBRE. The report highlights both Philadelphia and the Lehigh Valley among the top industrial and logistics labor hubs with the best mix of labor supply, quality and cost.

Retailers, delivery companies and third-party logistics firms can react to the labor crunch in any or all of three ways, according to CBRE: recruiting more workers from other industries; investing in automation to enhance labor efficiency; and expanding into markets with ready and available workforces.

Analysis by CBRE Research and CBRE’s Labor Analytics Group of federal employment data identified multiple U.S. markets that offer advantageous combinations of availability, quality and cost of labor for warehouses and distribution.

Among the markets with the highest labor supply and affordability was Philadelphia and the Pennsylvania I-78/I-81 Corridor. In 2017, Philadelphia was the top regional hub in the country for total number of transportation and warehouse jobs with 137,530, a 17.1 percent increase since 2013. In the Lehigh Valley, 67,940 transportation and warehouse jobs accounted for 7.6 percent of the region’s employment.

“The increasing demand for labor has forced employers to become more creative in attracting and maintaining a strong work force,” said William Wolf, Executive Vice President, CBRE. “We are seeing monetary incentives as well as increased workplace amenities. We see employee bonuses as well as on-site amenities including daycare, health and wellness centers, large attractive common areas, breakrooms with food selections to meet employee preferences, patios and flexible/staggered work schedules.”

CBRE came to its projection of demand for another 452,000 warehouse and distribution workers in 2018 and 2019 by applying a ratio of one employee per 1,000 sq. ft. of e-commerce distribution space to its forecast for warehouse-construction completions in the U.S. this year and next. That projected demand for 2018-19 exceeds the industry’s job growth since 2013 of 180,300 new positions a year, an acceleration that reflects the growing volume of e-commerce sales.

CBRE’s report addresses two additional tools for solving the labor crunch. First, investing in more automation – robots in the warehouse and autonomous trucks – can help mitigate labor scarcity by boosting the efficiency of an existing workforce. Some measures forecast the productivity gain in the transportation-and-distribution industry to be as much as 46 percent.

Second, recruiting workers from other industries has worked well for the warehouse-and-distribution sector in recent years. Government data show that the 66 percent increase in workers moving to the transportation-and-warehouse sector from other industries from 2011 to 2015 exceeded the gain rate of any other industry.

To read the full report, click here.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.