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2 Months : From Oct 2018 to Dec 2018
By Erica E. Phillips
South Carolina's workforce development office ran into a problem earlier this year. Big businesses including Amazon.com Inc. wanted to hire workers at their facilities in an industrial region outside the capital city of Columbia, but area residents looking for jobs couldn't find a way to get there.
It took coordinated action by state, county and regional transit officials -- along with meetings with four businesses that had set up shop there -- to lay out a plan for a new bus route several times daily across the Congaree River to a site well positioned for distribution and quick delivery of e-commerce orders but well beyond the reach of many workers who use public transit.
Until recently, "Nobody had a reason to go out there," said Tiffany James, a spokeswoman for the transit authority, known as the Comet. "There's nothing else out toward that way."
As e-commerce drives the retail business from shopping districts to warehouses on the outskirts of cities, local governments are finding that their public transit systems need to reach more distant and sparsely populated areas, often outside the typical 9-to-5 workday. That is adding stresses to already-tight local and state budgets.
In Columbia, the new bus route was put on hold until January after the Central Midlands Regional Transit Authority said some employers balked at its request that they help fund the route's more-than $62,000 annual price tag. "The goal is for those services to be paid for by the businesses," said Ms. James.
One employer, Nephron Pharmaceuticals Corp. eventually agreed to partly fund a new bus route starting in January. Ms. James said the route will be tailored for workers at Nephron's site, which is about one mile from Amazon's facility, but that anyone can ride the bus
The long road to establish that limited service echoes tensions arising across the country as companies, often chasing cheaper land and tax incentives, add jobs farther from city centers, extending what public policy experts at the Brookings Institution research center have called "job sprawl."
"In general it is challenging for transit to serve some of these locations because they are on the outskirts," said Wendy Williams, a spokeswoman for OmniTrans, the San Bernardino County, Calif., transit agency in the midst of one of the nation's busiest distribution hubs. "Transit works best in a high-density environment, warehouses are more in the wide open spaces."
Public transit agencies are spending more but ridership hasn't kept pace. According to the American Public Transportation Association, spending on U.S. public transit rose by more than 50% between 2005 and 2015, reaching $65 billion in operating and capital spending nationwide. Over that time, the number of transit passenger miles, a rough measure of ridership, rose only 18%, according to APTA.
"The bread and butter of public transportation" is getting people to and from work, said APTA President Paul Skoutelas. "It's challenging, after the fact, to say, 'We just opened this new facility and oh, by the way, we need to provide transit,'" he said.
Some federal programs provide funding to help local governments get people to work in peripheral and rural locations. And many businesses are working with local agencies to improve transit services to their new facilities.
Amazon has created a corporate team, Amazon Ride, that works with transit agencies to "identify opportunities to bring new service or improve existing service to our sites based on head counts and shift schedule to help with the planning process," Amazon spokeswoman Ashley Robinson, wrote in an email.
She said Amazon is fully or partly funding transit services in places including Joliet, Ill., Shakopee, Minn., Robbinsville, N.J., Breinigsville, Pa.
The need to adapt local transportation plans to digital commerce is growing.
Between 2010 and 2017 e-commerce's share of U.S. GDP doubled to 2%, analysts with Oxford Economics estimate, and they project it will double again to 4% by 2028. Meantime, employment in e-commerce and warehouse operations nearly doubled between 2001 and 2017, reaching more than 1.4 million jobs at the end of last year, according to Labor Department data. Over the same period, overall retail jobs rose just 4.4%.
Getting workers to the growing number of e-commerce jobs is becoming a more pressing issue for companies as they recruit in a tight labor market, with national unemployment at 3.7%.
"Warehouse jobs are booming, these massive facilities are popping up everywhere," said Adie Tomer, a fellow at the Brookings Institution's Metropolitan Policy Program. Fulfillment businesses look for sites that are easily accessible for freight deliveries and pickups, he said, but "traditional transportation networks, especially with regard to public transit, are not in the same place."
The Dallas-Fort Worth area is redrawing its transit services as companies move into an industrial zone south of the city that has become one of the nation's fastest growing logistics and distribution centers. The booming area has drawn Amazon, Home Depot Inc., L'Oréal SA and FedEx Corp. among its many logistics operations -- sites that are mostly outside the jurisdiction of Dallas Area Rapid Transit, known as DART.
With many operations employing a few hundred people over nontraditional hours, there isn't enough ridership to justify regular service with a full bus, said DART President Gary Thomas. Instead, DART developed an on-demand service through a smartphone app. The Dallas Inland Port "GoLink" service makes about 50 trips a day and costs DART an additional $150,000 annually.
"It's not in our normal wheelhouse, so it's causing us to think differently," Mr. Thomas said.
The labor crunch has driven QPS Employment Group, a staffing agency serving industrial clients in outlying locations around the Midwest, to take transit into its own hands. Under an agreement with Enterprise Rent-A-Car Holdings Inc., the company runs up to 30 Enterprise vans daily from urban-core areas to logistics and manufacturing sites in Kansas, Missouri, Iowa and Wisconsin.
Jim Roy, senior regional vice president at QPS, says it is providing an important incentive to workers. "Our labor pool is really shallow for talent, especially for that three-month push as we prepare for Christmas, it's as shallow as I've ever seen it in 25 years," he said.
Write to Erica E. Phillips at email@example.com
(END) Dow Jones Newswires
October 12, 2018 05:44 ET (09:44 GMT)
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