Relationship between freight accessibility and logistics employment in US counties

https://doi.org/10.1016/j.tra.2013.11.002Get rights and content

Highlights

  • A new accessibility measure is developed, which is relevant for logistics companies.

  • Highly accessible counties attract more logistics employment.

  • Controlling for population is key when studying accessibility and employment.

Abstract

This paper analyzes the relationship between freight accessibility and logistics employment in the US. It develops an accessibility measure relevant for logistics companies based on a gravity model. This allows for an analysis of the accessibility of US counties focusing on four different modes of transportation: road, rail, air, and maritime. Using a Partial Least Squares model, these four different freight accessibility measures are combined into two constructs, continental and intercontinental freight accessibility, and related to logistics employment. Results show that highly accessible counties attract more logistics employment than other counties. The analyses show that it is very important to control for the effect of the county population on both freight accessibility and logistics employment. While county population explains the most variation in the logistics employment per county, there is a significant relationship between freight accessibility and logistics employment, when controlling for this effect.

Introduction

One of the key factors to a region’s economic performance is a reliable and efficient transportation infrastructure. “A well-developed transportation system provides adequate access to the region, which in turn is a necessary condition for the efficient operation of the manufacturing, retail, labor, and housing markets” (Ozbay et al., 2006, p. 3). The accessibility of a location is, naturally, an important factor for the location decision of logistics companies (such as third party logistics service providers, warehouses, motor carriers, and the logistics/distribution operations of retailers, distributors and manufacturers). Better accessibility results in lower transportation costs and a shorter time to the market (Limão and Venables, 2001), which have a direct impact on the cost and service level that logistics operations enjoy. Therefore, logistics employment is expected to be concentrated in areas that are highly accessible. Hence, it is not surprising that improvements to the road network significantly affect the location of agglomerations of logistics firms (Taniguchi et al., 1999), that logistics clusters in the US are primarily developed close to major airports and seaports and in central areas such as Chicago, Kansas City and Dallas (Rivera and Sheffi, 2012), or that logistics establishments in the Netherlands relocate relatively often in areas with intermodal terminals (Van den Heuvel et al., 2013). In this paper, we analyze whether there is a general relation between freight accessibility and logistics employment. This topic may be especially relevant given Hesse’s (2008) argument that logistics investments may accelerate economic development of areas. This argument is also advanced by Sheffi (2012), who demonstrates that logistics clusters attract manufacturing sub-clusters. Several studies have found that accessibility is an important factor for urbanization (population and employment growth, see e.g. Jiwattanakulpaisarn et al., 2010, Song et al., 2012). However, the relationship between freight accessibility and logistics employment has hardly been studied. Such an analysis requires a measure of freight accessibility. Although freight accessibility is important for location decisions of companies (Porter and Rivkin, 2012), limited efforts have been put in developing freight accessibility measures.1 This paper addresses these gaps; we develop a freight accessibility index and analyze the relationship between freight accessibility and logistics employment.

The remainder of this paper is structured as follows. Section 2 presents an overview of the relevant literature on the relationship between accessibility and employment, while Section 3 reviews the academic literature on accessibility measures. Section 4 presents an accessibility measure especially developed for freight transport. Using data at the county level in the US, Section 5 presents the analysis into the relation between freight accessibility and logistics employment per county, based on a Partial Least Squares model. Finally, Section 6 concludes the paper and discusses options for further research.

Section snippets

Relationship between accessibility and employment

The relationship between transport infrastructure investments (not specifically accessibility) and spatial development has been widely studied (e.g., Rietveld, 1994, Berechman, 1994, Berechmen et al., 2006, Ribeiro et al., 2010). These studies show that transport infrastructure investments can both have positive (increased population or gross product) and negative economic impacts (degradation of the region, because firms and residents can move away from the region more easily). Transport

Accessibility measures

There are many accessibility measures available (e.g., Ingram, 1971, Morris et al., 1978, Handy and Niemeier, 1997, El-Geneidy and Levinson, 2006, Bowen, 2008). Most are specifically developed for passenger transport. Only a few authors explicitly analyzed freight accessibility. Thomas et al. (2003) analyze freight accessibility in Belgium based on three different transportation modes: road, rail, and waterways. These authors use gravity-based measures weighting the nodes of the transportation

Freight accessibility measures for logistics establishments in the US

This section describes the accessibility measures in detail. For comparison, Appendix A presents the measures used by Bowen (2008). The modes of transportation that are included are road, air, maritime, and rail transport.

Accessibility of US counties and the relation to logistics

This section applies the accessibility measures described above on a county level in the US and relates this to the logistics employment per county.

Conclusion

This paper analyzed the relationship between freight accessibility and logistics employment. We developed a freight accessibility measure that is particularly relevant for logistics companies. Traditionally, accessibility is measured from a passenger perspective, as most of the traffic is passenger related. However, anecdotal evidence suggests that logistics companies are attracted to highly accessible locations (Sheffi, 2012). To be able to measure this relationship, a freight accessibility

Acknowledgements

The authors are grateful to the Provincie Noord-Brabant, the Prins Bernhard Cultuurfonds, and the Van Eesteren-Fluck & Van Lohuizen Stichting for the financial support that made this research possible.

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