This report is the result of a four-month study generated to assist program development at Community Career Development, Inc. (the non-profit operating agent of the Wilshire-Metro WorkSource Center in Korea Town, Los Angeles.) The non-profit hosts a Logistics Training Academy for un and underemployed job seekers in Los Angeles in partnership with the City of Los Angeles, The Aspen Institute and LA Community Colleges (among others.)

1. Logistics and Goods Movement Jobs in Los Angeles County:
An Industry Snapshot and Overview of Employer Needs
Prepared on behalf of Community Career Development, Inc.,
and the WilshireMetro Worksource Center
By Steven Simon and Deborah Helt
December 2008

2. Table of Contents
Executive Summary………………………………………………………………………1
Introduction ………………………………………………………………….…………....4
Scope of Report . …………………………………………………………….….............5
Industry Snapshot: Federal, State, and Other Datasets…………………..………….6
Logistics Employment and the Ports………………………………6
NAICS AND SOC Data ……………………………………………..7
Industry Snapshot: Field Interviews…………………………………………………….21
Methodology………………………………………………………….21
Company Types and Occupations Defined . …………………….24
Is Logistics A Los Angeles Growth Industry?.............................29
Entry Level Employment and CCD Standards…………………..35
Wages ……………………………………………………….35
Career Opportunities ……………………………………….38
Industry Hiring Practices ………………………………………………..……...40
Common Hiring Sources ………………………………….. 40
Background Issues and Hiring …………………………….43
Temporary Staffing Agencies and Hiring………………….45.
Do Training Programs Provide an Edge?.........................47
Top 10 Suggestions for the LGMTA Curriculum………….49
Program Recommendations…………………………………………………….…….51
Curriculum……………...……………………………………………………….51
Two-Track Approach………………………………………...51
Working With Hard to Serve Populations………………….53
Type of Companies to Target……………………………….55
Staffing Services………………………………………………56
Achieving Industry Buy-In…………………………………………………….57
Developing the Employer Network…………………………58
Building CCD’s Public Image……………………………….59
Expanding the CCD Intern Program……………………….60
Conclusion………………………………………………………………………..…...61

3. Executive Summary
Introduction and Methodology
The purpose of this report is to improve the quality of placements and the effectiveness
of programming of the Logistics and Goods Movement Training Academy (LGMTA)
through a better understanding of the local industry presence and the needs of
employers.
Our goals for this research are twofold:
1. To gain an accurate quantitative and qualitative snapshot of logistics and goods
movement facilities in Los Angeles relevant to LGMTA participants.
2. To evaluate the LGMTA’s current curriculum and program approach using
insights gleaned from interviews with employers.
This report was generated between August and December of 2008, during the sixth and
seventh sessions of the Logistics and Goods Movement Training Academy (LGMTA).
To address our core research questions, we gathered data from state and federal
datasets and from a series of 43 interviews with local industry representatives.
Key Findings
Company Types. It is difficult to make across-the-board generalizations about firms
and functions in the goods movement industry. Each type of company provides a wide
variety of services. For the purposes of the LGMTA, we divided goods movement firms
into three broad types:
• Third party logistics companies (3PLs)
• Public Storage Warehouses
• Retail Distribution Centers
Occupations. Based upon our interviews with employers, we have classified
occupations into three major types:
• Warehouse/Material Mover
• Office Jobs
• Other (includes driving and courier services)
Is Logistics still a Growth Industry in Los Angeles? Despite rapid growth in
Inland Empire logistics facilities, employers said that they believe Los Angeles will
remain the center of the Southern California goods movement industry.
• Los Angeles facilities are closer to the ports. Given the rise in fuel costs,
many employers prefer the “fixed-cost” of the land in Los Angeles to the
“variable cost” of fuel.
• Los Angeles County locations are more amenable to serving varied and/or
smaller customers.
1

4. Entry Level Employment and CCD Standards. Entry level opportunities are
limited and tend to be low-paying. While the majority of entry-level jobs offer
disappointing starting wages, almost all employers said there are substantial
opportunities for career advancement.
• Entry-level wages average about $9.00 per hour.
• Targeted placements in specific industry sub-sectors will improve the
chances of a higher starting wage. CCD will likely attain more placements
at $10 to $15 an hour with strategic employer targeting.
Industry Hiring Practices. Employers are using several different methods to find
employees, but they still overwhelmingly prefer referrals from current employees and
other trusted sources. Temp agencies are playing a growing role in hiring.
• Common ways of searching for employees include: word of mouth,
temporary agencies, internet job search sites, print classified
advertisements, the company website, head hunters, career fairs, in-
house staffing entities, “poaching,” and previous employees. Most
employers are shifting to on-line applications, especially those that pay
well.
• LGMTA students should approach temporary work with caution and an
open mind. Many employers want at least three months of experience.
However, students should, as a rule, not spend more than six months in a
temporary position.
• When approaching applicants with criminal background issues employers
tend to defer to the standards of customers or regulatory agencies in
deciding whether or not to hire a person with a criminal record. About half
of employers said they consider applicants with records “on a case by
case basis.”
• Offenses involving theft are especially hard to overcome for applicants
seeking warehouse work.
Program Recommendations. The current LGMTA curriculum is not optimally
meeting the needs of jobseekers or employers. The program attracts hard-to-serve and
more highly-skilled jobseekers but cannot effectively meet the needs of both. We
recommend that the LGMTA be split into two tracks, designed to run consecutively:
• Two-Week Logistics Job Search Academy will address key obstacles to
obtaining warehouse floor employment. The curriculum will address
jobsearch skills including a targeted computer skills class, assistance with
the preparation of application materials, and key certifications such as
OSHA and basic forklift.
• The Two-Month Freight Forwarder Training Academy will direct
participants toward a career in freight forwarding or import/export-related
customer service. This program will be geared toward office work and
students who may ultimately wish to pursue a professional logistics
degree.
2

5. There are several elements that will be critical to the success of the new curriculum.
CCD must improve its industry buy in by achieving and celebrating “flagship
placements” and improving outreach with participating companies to develop “employer
champions. CCD employers should do targeted outreach to companies that provide
quality jobs.
• We recommend older cold storage firms, large multinational logistics
Firms, unionized firms and firms in heavily unionized sub-sectors.
CCD must also realistically address the impact of staffing agencies on the industry. We
suggest three potential courses of action:
• Partner with existing temp agencies to place LGMTA graduates.
• Advertise as an agency that can provide staffing services, such as training
and pre-screening, but without providing the broader liabilities of a temp
agency.
• Become a full-fledged staffing company.
CCD must also bolster its public image by participating broadly in industry events,
publicly recognizing supportive employers with the help of high-profile partners and
improving its website.
3

6. Introduction
We researched and wrote this report from August through December 2008, during the
sixth and seventh sessions of Community Career Development’s Logistics/Goods
Movement Training Academy (LGMTA). The purpose of our report is to recommend
ways for Community Career Development (CCD) to improve both the training and the
job placement assistance that students in the LGMTA receive.
This report relies primarily on two types of information: (1) statistics from state and
Federal datasets, and (2) information taken from our own interviews with goods
movement employers, industry organizations, and direct interaction with LGMTA
students.
For the duration of this project, CCD intended for us to employ a relationship-building
research process, resulting in a network of industry employers willing to become
involved with the LGMTA and eager to consider hiring graduates of the program. This
remained our primary goal throughout our research, despite the challenges posed by a
consumer economy that quickly went from sluggish to absolute freefall during the few
months leading up to this writing. We have established several relationships with local
companies, a few of which have already benefited the LGMTA during the sixth and
seventh sessions.
The end goal of the LGMTA is not simply job training and job placement. CCD has
invested its resources in goods movement training because the conventional wisdom
and first-hand experience point to the fact that logistics jobs offer a career ladder to
under-skilled individuals with low educational attainment. We found this assumption to
be mostly true (though not universally). CCD seeks to use the LGMTA as a springboard
into living wage jobs with opportunities of advancement, and this end goal was also the
focus of our research.
4

7. Scope of Report
For the most part, we have kept the geographical scope of this project to Los Angeles
County. We visited a few goods movement firms just over the border between Los
Angeles County and Orange County, and none in the major logistics center of Riverside
and San Bernardino Counties. All LGMTA participants live in Los Angeles County, so
we limited our study to the 30 mile radius surrounding CCD’s Koreatown, Los Angeles
location.
We have made an attempt to solicit information from firms across the spectrum of
logistics employment: couriers, 3PLs, global shippers, public warehouses (cold and dry
storage) retail distribution centers, freight forwarders, and even packing and crating
operations all contributed to our findings. Further, in an attempt to determine the profile
of companies likely to benefit LGMTA participants, we have attempted to survey small,
medium, and large companies.
This report relies on a minimum of technical language (as do those working in the
industry, generally). We define any terms that beg clarification in the text. We use the
terms “logistics” and “goods movement” interchangeably, referring always to the widest
net used by CCD – any occupations involved in the transportation of goods.
As stated, living wages and career opportunities are the focal point of this study. The
concept of “living wage” has primarily colloquial meaning and career opportunities are
hard to determine until a person is placed in a given job. However, CCD has one official
guideline that we have used as a baseline in determining whether wages are sufficient:
for contractual reasons, jobs must start at $11.00 to $14.00 per hour.
In general, we do not cite sources by name when we quote them. Several of our
sources seemed uncomfortable with the idea that they might be quoted, and one in
particular required anonymity as a condition of our interview. (The 3PL in question runs
a chemical distribution facility, and the source cited federal law as the reason for this
condition.) It is reasonable to assume that our other sources did not expect us to
circulate details about their hiring woes, major accounts, and the details of their
temporary staffing arrangements.
5

8. Industry Snapshot: Federal, State, and Other Datasets
LOGISTICS EMPLOYMENT AND THE PORTS
The Los Angeles and Long Beach ports together are the biggest generator of
employment in Southern California. Most LGMTA graduates will be seeking
employment tied to port activities.
Figure 1
Goods movement and logistics operations
in Los Angeles have flourished because
of their proximity to the Los Angeles and
Long Beach ports. Overall, the twin ports
generate an estimated 500,000 jobs in the
Southern California region, making them
the largest generator of employment in
California. Together the Los Angeles and
Long Beach ports comprise the busiest
port complex in the U.S. and the fifth
busiest in the world.
At present, approximately 43% of all the
goods that enter the United States and
over 70% of containers handled at major West Coast ports are handled at the Los
Angeles and Long Beach port complex. (See Figure 1) Total container trade at the twin
ports grew by 296% between 1995 and 2007. Growth rates in container trade volumes
at the ports have leveled off in the last two years, but even at vastly reduced rates of
growth, both ports are still anticipating a severe crisis of capacity within the next ten
years. Port authorities are developing plans to address the impending needs of
infrastructure, labor and the environment.
Figure 2
A recent SCAG
study predicts
that an additional
1.3 million jobs
will accompany
infrastructure
improvements to
the ports in the
near future. A
significant portion
of these jobs will
be related to the
inbound
transportation
and distribution of goods entering the ports. Most LGTMA graduates will be seeking
6

9. positions tied to port activities and most will likely fall within the Transportation and
Warehousing Sector.
NAICS AND SOC DATA
This report uses government data sets to offer a broad quantitative snapshot of
the logistics industry in Los Angeles. The majority of data is from the North
American Industry Classification System (NAICS) Sector 48-49: Transportation
and Warehousing, and the Standard Occupational Classification System (SOC),
Occupational code 53: Transportation and Material Moving Occupations.
Data indicate that the industry is growing both nationally and locally.
Government data for the Transportation Sector is described by NAICS data and SOC
data. The North American Industry Classification System (NAICS) classifies businesses
into different industries, while the Standard Occupational Classification System (SOC)
classifies occupations by job duties.
NAICS classifies major industries by codes based on how a business produces a
product, (or by the technology and processes used,) not by what the actual product is.
Major sectors are defined by two-digit codes, while sub-sectors are classified with three
to six digits, growing larger with degree of specificity. For example NAICS sector 48-49
covers Transportation and Warehousing categories. Within this category Air
Transportation, NAICS 481 is then further broken down into smaller sub-sectors called
Scheduled Air Transportation, NAICS 4811 and Non-scheduled Air Transportation,
NAICS 4812.
For the purposes of this research, we analyzed NAICS sector 48-49 Transportation and
Warehousing and seven key sub-sectors, focusing mainly on employment and wage
data. For additional occupation and wage data we analyzed a selection of SOC codes
related to NAICS 48-49.
The U.S. Census Bureau defines NAICS 48-49 as the following 1 :
The Transportation and Warehousing sector includes industries providing
transportation of passengers and cargo, warehousing and storage for goods,
scenic and sightseeing transportation, and support activities related to modes of
transportation. Establishments in these industries use transportation equipment
or transportation related facilities as a productive asset. The type of equipment
depends on the mode of transportation. The modes of transportation are air,
rail, water, road, and pipeline.
The Transportation and Warehousing sector distinguishes four basic types of
activities:
• Subsectors for each mode of transportation
• Subsectors for warehousing and storage
1
http://www.census.gov/econ/census02/data/industry/E482.HTM
7

10. • Subsectors for establishments providing support activities for transportation.
• Subsectors for establishments that provide passenger transportation for scenic
and sightseeing purposes, postal services, and courier services.
The seven sub-sectors most relevant to our study are described in more detail below:
Table 1: Definitions of seven selected sub-sectors from Transportation and Warehousing NAICS 48-49
NAICS Sub-Sector Definition
Industries in the Air Transportation subsector provide air transportation of passengers
481 Air Transportation and/or cargo using aircraft, such as airplanes and helicopters. The subsector
distinguishes scheduled from nonscheduled air transportation.
Industries in the Rail Transportation subsector provide rail transportation of
passengers and/or cargo using railroad rolling stock. The railroads in this subsector
primarily either operate on networks, with physical facilities, labor force, and
Residual-Rail
482 equipment spread over an extensive geographic area, or operate over a short
Transportation
distance on a local rail line. Scenic and sightseeing rail transportation and street
railroads, commuter rail, and rapid transit are not included in this subsector.
Industries in the Truck Transportation subsector provide over-the-road transportation
of cargo using motor vehicles, such as trucks and tractor trailers. The subsector is
Truck subdivided into general freight trucking and specialized freight trucking. This
484 distinction reflects differences in equipment used, type of load carried, scheduling,
Transportation
terminal, and other networking services. Each of these industry groups is further
subdivided based on distance traveled.
Industries in the Transit and Ground Passenger Transportation subsector include a
variety of passenger transportation activities, such as urban transit systems;
Transit & Ground chartered bus, school bus, and interurban bus transportation; and taxis. These
485 Passenger activities are distinguished based primarily on such production process factors as
Transportation vehicle types, routes, and schedules.In this subsector, the principal splits identify
scheduled transportation as separate from nonscheduled transportation.
Industries in the Support Activities for Transportation subsector provide services
that support transportation. These services may be provided to transportation carrier
Support Activities establishments or to the general public. This subsector includes a wide array of
488
for Transportation establishments, including air traffic control services, marine cargo handling, and
motor vehicle towing. The Support Activities for Transportation subsector includes
services to transportation but is separated by type of mode serviced.
Industries in the Couriers and Messengers subsector provide intercity and/or local
delivery of parcels. These articles can be described as those that may be handled
by one person without using special equipment. The restriction to small parcels
Couriers &
492 partly distinguishes these establishments from those in the transportation
Messengers
industries. Messengers, which usually deliver within a metropolitan or single
urban area, may use bicycle, foot, small truck, or van.
Warehousing &
493 Industries in the Warehousing and Storage subsector are primarily engaged in
Storage
8

11. operating warehousing and storage facilities for general merchandise, refrigerated
goods, and other warehouse products. These establishments provide facilities to store
goods. They do not sell the goods they handle. They may provide a range of services,
often referred to as logistics services, related to the distribution of goods.. Bonded
warehousing and storage services and warehouses located in free trade zones are
included in the industries of this subsector.
Additional sub-sectors not included in this study are: Scenic and Sightseeing
Transportation (NAICS 487), Pipeline Transportation (NAICS 486), and Postal Service
(NAICS 491). These sectors were not included because they were the least relevant to
the content of the LGMTA curriculum.
Standard Occupational Classification (SOC) codes. The Standard Occupational
Classification (SOC) groups workers into categories by occupations, outlining duties,
skills, education and experience involved in a particular job. There are 23 major, 96
minor, 449 broad and 820 detailed categories.
The SOCs relevant to our purpose mostly lie in major category 53: Transportation and
Material-Moving Occupations. This category is sub-divided into seven major
subcategories.
Table 2: List of Occupations under Transportation and Material Moving Occupations
SOC Major Minor
Transportation and Material
53-0000 Moving Occupations
53-1000 Supervisors, Transportation and Material Moving Workers
53-2000 Air Transportation Workers
53-3000 Motor Vehicle Operators
53-4000 Rail Transportation Workers
53-5000 Water Transportation Workers
53-6000 Other Transportation Workers
53-7000 Material Moving Workers
Employment Development Department Data. Selected EDD data used in this
research is part of the Quarterly Census of Employment and Wages (QCEW) program,
a set of data on employment and wages by 6-digit NAICS code collected at the
National, State, and County levels. EDD derives data from quarterly tax reports required
by California employers subject to State Unemployment Insurance (UI) laws. EDD edits
and processes the data which is then send to the Bureau of Labor Statistics (BLS) for
dissemination.
9

12. Bureau of Labor Statistics Data
The Current Employment Statistics (CES) are the result of a monthly survey of about
150,000 businesses and government agencies, representing approximately 390,000
individual worksites regarding employment, hours and earnings from nonfarm payrolls.
Results are reported to the Bureau of Labor Statistics.
Transportation and Warehousing (NAICS 48-49):
U.S.
Table 3: U.S. Establishments, Revenue, Payroll and Employees for NAICS 48-49
Annual Payroll
Revenue (in Paid
Year Establishments (in thousands
thousands) Employees
of dollars)
2002 199,618 382,152,040 115,988,733 3,650,859
1997 178,025 318,245,044 82,346,182 2,920,777
12.1 20.1 40.9 25
Percent Change
Source: 2002 U.S. Economic Census
Between 1997 and 2002 (the most recent data available from the U.S. Census), the
number of establishments in the U.S. Transportation and Warehousing Sector grew by
12.1%, while the number of employees grew by 25%. The sector grew by 20.1% in
revenue during the same period, while revenue per employee dropped by 4%, from
$109,000 to $105,000. 2 According to CES data, national employment levels in the
sector have grown at an average of 1.6%, since 1990. The highest growth rates
occurred between 1995 and 2000, with a high of 3.5% in 1998.
Figure 3
2
U.S. Census Bureau
**Data Source: Econ Census/All Sectors/2002/Economy-Wide Key Statistics
10

13. Of the six sub-sectors selected from NAICS 48-49 for this report (Rail Transportation
figures are not reported in the 2002 Economic Census) Truck Transportation comprised
41% (1,435,210,000) of the total U.S. employment in our reduced sample group,
followed by Couriers and Messengers (561,514,000) and Warehousing and Storage
(565,533,000) both at 16%, then Support Activities for Transportation at 13%
(465,616,000), followed by Transit and Ground Passenger Transportation at 11%
(398,383,000).
Wages. The average hourly earning of production employees nationally for NAICS 48-
49 was $18.07 in 2007.
Figure 4
According to CES statistics, California generates the most revenue and has the most
employees in the Transportation and Warehousing Sector than any other U.S. State.
Table 4: California Establishments, Revenue, Payroll and Employees for NAICS 48-49
Revenue % Annual payroll Paid
Description Establishments Revenue ($1,000)
of U.S. (in thousands) employees
California 19,012 45,507,276 11.91 13,129,272 397,266
Source: 2002 U.S. Economic Census
Los Angeles County
Employment. In Los Angeles County, as of 2007, the largest sub-sector in the NAICS
category 48-49 in terms of employment was Support Activities for Transportation
(NAICS 488) with 31% (47,900 jobs), followed by Truck Transportation (NAICS 484)
with 18% (28,100 jobs), Couriers and Messengers (NAICS 492) with 15% (22,100 jobs),
Air Transportation (NAICS 481) with 13% (19,500 jobs), and Warehousing and Storage
(NAICS 493) with 11% (17,200 jobs) in that order.
11

14. Figure 5
Source: Employment Development Department, Labor Market Information Division
The Transportation and Warehousing sector as a whole grew by an average of .42%
between 1990 and 2006, and grew fastest between 1995 and 2000 at a rate of 3.12%.
During this period, the surrounding Counties of Riverside-San Bernardino-Ontario MSA
grew by an average of 6.2% between 1990 and 2007. :
Figure 6
12

15. Between 1990 and 2007, Support Activities for Transportation (NAICS 488) grew the
fastest of the seven major sub-sectors at an average rate of 3.7% and a high rate of
12.7% in 1998 (just after the passage of NAFTA). Employment levels in Truck
Transportation (NAICS 484), Couriers and Messengers (NAICS 492) and Transit and
Ground Passenger (NAICS 485) have remained consistent, while Rail Transportation
(NAICS 482), Air Transportation (NAICS 481) and Warehousing and Storage (NAICS
493) have declined moderately since 1990, at rates of -.93%, -3.07% and -.32%
respectively.
Figure 7
Wages. According to the Bureau of Labor Statistics, the average wage for NAICS
sector 48-49 as of 2006 was $915 per week and $47,548 per year. The highest paying
sub-sector that year was Support Activities for Transportation (NAICS 488) at $1,164
per week, $60,525 per year.
Figure 8
13
Source: BLS Quarterly Census of Employment and Wages

16. Average hourly wages for the sectors break down as follows: Air Transportation,
$28.07, Rail Transportation, $19.83, Truck Transportation, $19.35, Transit and Ground
Passenger Transportation, $13.65, Support Activities for Transportation $29.10,
Couriers and Messengers, $17.60, and Warehousing and Storage, $20.18.
Figure 9
Establishments.
In Los Angeles County,
Truck Transportation and
Support Activities for
Transportation have the
most reported
establishments of our
seven targeted sub-sectors,
38% (2,086
establishments) followed by
Air Transportation,
Couriers and Messengers,
Transit and Ground
Passenger Transportation
and Warehousing and
Storage.
Warehousing and Storage
Nation-wide, employment in Warehousing and Storage grew faster between 1998 and
2006 than any other occupation in the Transportation and Warehousing Sector. While
growth in Warehousing and Storage Southern California has been slow, the sub-sector
retains a significant presence and is an important source of entry-level employment for
LGMTA graduates.
14

17. Figure 10
Warehousing and Storage Establishments and Distribution Size: Los Angeles
County
Figure 11
According to the Employment
Development Department, there
are 441 warehousing employers in
Los Angeles County. General
Warehousing and Storage (362
establishments) account for 82%
of the total Warehousing and
Storage establishments, followed
by much smaller numbers in
Refrigerated Warehousing (40
establishments), Other
Warehousing and Storage (36
establishments), and a small group of Farm Product Warehousing and Storage
Facilities (four establishments.)
Los Angeles is still the biggest presence in the industry, despite rapid increases in
establishments in Riverside and San Bernardino Counties that occurred as land around
the ports became scarce. The most recent available Census Data indicates that of the
total Warehousing and Storage establishments in the four-county region, Los Angeles
has 57%, San Bernardino has 19%, Orange County has 15% and Riverside has 9%.
15

18. Table 7:
Southern California Warehousing and Storage Establishments: 2006
Los San
NAICS Industry Angeles Bernardino Riverside Orange
493 Warehousing and Storage 441 150 72 114
49311 General Warehousing and Storage 362 130 56 96
Refrigerated Warehousing and
49312 Storage 40 10 6 5
Farm Product Warehousing and
49313 Storage 4 1 2 0
49319 Other Warehousing and Storage 36 9 8 13
Source: Employment Development Department, Quarterly Census of Employment and Wages, 2007
Since 1990, growth rates in San Bernardino and Riverside have been consistently
higher than those in Los Angeles and Orange County. Between 1990 and 2006,
Warehousing and Storage establishments grew by an average of 2.82% in Los Angeles
and by 2.75% in Orange County. During the same period, Warehousing and Storage
establishments grew by an average of 10.23% in San Bernardino and 7.5% in
Riverside. Between 2000 and 2006 the number of Warehousing and Storage
establishments in Los Angeles and Orange Counties fell by .73% and .42%
respectively, while San Bernardino and Riverside counties grew by 5.55% and 5.91%
respectively.
Size Distribution. In the Warehousing and Storage sector in Los Angeles, data indicate
an inverse relationship between number of establishments and number of employees.
Within the Warehousing and Storage sector (NAICS 493,) 83% of total establishments
employ less than 50 people and 33% of total establishments employ between one and
four people. This pattern remains largely consistent, even when the Warehousing and
Storage sector is broken down into sub-sectors.
The only substantial outlier is a spike in refrigerated warehousing and storage at the 20-
49 employees category. 43% of total establishments in refrigerated warehousing and
storage lie within the 20-49 employees category alone. 85% of the 40 total
establishments in Refrigerated Warehousing and Storage have fewer than 49
employees.
Table 8: Warehousing and Storage (NAICS 493):
Establishment Size Distribution: Los Angeles, 2006
250 500
Total 5- 10- 20- 50- 100- 100
1-4 - -
Establishments 9 19 49 99 249 0+
NAICS Industry 499 999
493 Warehousing and Storage 478 157 80 82 80 43 25 4 7 0
49311 General Warehousing and Storage 356 116 64 64 49 37 18 4 4 0
49312 Refrigerated Warehousing and Storage 40 8 5 4 17 4 1 0 1 0
49313 Farm Product Warehousing and Storage 1 1 0 0 0 0 0 0 0 0
49319 Other Warehousing and Storage 81 32 11 14 14 2 6 0 2 0
Source: U.S. Census, County Business Patterns, 2006
16

19. Figure 12
Table 9: Southern California- Average Employment, Weekly and Annual Wages
Average Average
Average
2006 Weekly Annual
Employment
Wages Wages
NAICS 493:
Warehousing and
Storage
Los Angeles 16,536 $807 $41,962
San Bernardino 7,193 $690 $35,881
Riverside 5,330 $627 $32,599
Orange 5,365 $973 $50,611
Source: EDD, California Regional Economies Employment Data
Wages. In order to contextualize Los Angeles Wages in Warehousing and Storage, we
also looked at Orange, Riverside, and San Bernardino Counties. Orange County
reported the highest wages of four Southern California counties, 18.3% more than the
next highest wages reported for Warehousing and Storage (NAICS 493) and General
Warehousing and Storage (NAICS 49311) in Los Angeles County.
San Bernardino wages were an average of 16.3% percent lower than Los Angeles
County and 41.7% percent lower than Orange County. Riverside County wages were on
average 29.1% lower than Los Angeles and 57.3% lower than Orange County for the
same sub-sectors. 3 San Bernardino and Riverside Counties have both the highest
overall growth rates in the Warehousing and Storage sector and the lowest average
3
The reasons for this significant disparity are beyond the scope of this research. More research is needed regarding
the specific types of firms locating in Orange County and/or other discrepancies in the data.
17

20. wages. Wages in San Bernardino County were on average 11.1% higher than wages in
Riverside County. 4
Figure 13
Los Angeles reported the highest wages in Refrigerated Warehousing and Storage
(NAICS 49312) by $5,708, or 14.1% over the same category in San Bernardino, and
$11,395 or 32.7% higher than in Orange County.
Occupations. The following occupations were selected from SOC Code 53:000 as the
most likely to employ LGMTA graduates based upon anecdotal data from past
placements.(See Table 5 for a survey of wages for Los Angeles Occupations.) Average
hourly wages vary widely from an average of $9.26 to $28.16 for a Supervisor position.
The overall average of the 15 selected occupations is $16.30, which includes both
entry-level and supervisory positions.
Laborers and Truck Driving occupations selected occupy the largest share of the
employment population. Laborers and Freight, Stock and Material Movers, Hand (SOC
53-7062) and Packers and Packagers (SOC 53-7064) comprise 39% of the total
population of May 2007 employment estimates for all of Transportation and Material
Moving Occupations (SOC 53-000). The average overall wage of the two occupations is
$12.92. The two selected trucking occupations: Truck Drivers, Light or Delivery Services
(SOC 53-3033) and Truck Drivers, Heavy or Tractor Trailer (SOC 3032) comprise 19%
and have an average overall wage of $16.84.
4
Based upon 2006 EDD data for the following sub-sectors: Warehousing and Storage (NAICS 493), General
Warehousing and Storage (NAICS 49311)
18

21. Table 5: Los Angeles County Wage and Employment Data: Selected Occupations
within Transportation and Material Moving Occupations (SOC 53:000)
50th
May 2007 25th Percentile 75th
SOC
Occupational Title Employme Mean Mean Percentile (Median) Percentile
Code
nt Hourly Annual Hourly Hourly Hourly
Estimates Wage Wage Wage Wage Wage
Transportation and
Material Moving
53-0000 Occupations 312,580 $14.95 $31,091 $8.88 $12.02 $17.99
Packers and
53-7064 Packagers, Hand 37,080 $9.26 $19,254 *8.00 $8.62 $9.58
Cleaners of Vehicles
53-7061 and Equipment 15,740 $9.88 $20,563 *8.00 $8.88 $10.68
Laborers and Freight,
Stock, and Material
53-7062 Movers, Hand 86,080 $11.86 $24,656 $8.54 $10.12 $13.41
53-3031 Driver/Sales Workers 11,000 $12.03 $25,014 *8.00 $9.12 $14.56
Motor Vehicle
53-3099 Operators, All Other 2,610 $13.45 $27,981 $8.77 $10.17 $16.22
Service Station
53-6031 Attendants 1,990 $13.00 $27,039 $9.06 $13.63 $16.44
Material Moving
53-7199 Workers, All Other n/a $13.99 $29,096 $8.99 $11.10 $17.45
Truck Drivers, Light
53-3033 or Delivery Services 29,370 $14.46 $30,057 $10.37 $13.49 $17.71
Conveyor Operators
53-7011 and Tenders 1,210 $15.63 $32,523 $12.91 $15.33 $17.82
Refuse and Recyclable
53-7081 Material Collectors 3,890 $18.83 $39,163 $15.93 $17.61 $19.62
Truck Drivers, Heavy
53-3032 and Tractor-Trailer 30,700 $19.21 $39,971 $15.99 $19.01 $22.47
First-Line
Supervisors/Managers
of Helpers, Laborers,
and Material Movers,
53-1021 Hand 8,340 $21.26 $44,216 $15.86 $20.15 $25.24
Aircraft Cargo
53-1011 Handling Supervisors n/a $21.00 $43,695 $15.19 $18.00 $25.64
Transportation
53-6099 Workers, All Other 3,830 $22.54 $46,887 $20.14 $22.66 $26.55
19

22. 53-1031 First-Line
Supervisors/Managers
of Transportation and
Material-Moving
Machine and Vehicle 7,290 $28.16 $58,570 $20.65 $27.67 $35.49
Source: Department of Labor, Occupational Employment Statistics
Table 6 shows average employment projections for SOC codes relevant to LGMTA
graduates that have an anticipated growth rate of more than 25% and low barriers to
entry. This data is projected based on statewide averages.
Table 6: Selected Occupations within Transportation and Material Moving
Occupations (SOC 53:000) with Projected Growth Rages over 25%
Projected
Average Average
Employment Employment BLS Training
2006 2016 Percent Level
Short-Term On-the-
Driver/Sales Workers 800 900 50.0% Job Training
Moderate-Term
On-the-Job
Truck Drivers, Heavy and Tractor-Trailer 5,100 6,300 33.3% Training
Short-Term On-the-
Truck Drivers, Light or Delivery Services 1,800 2,200 33.3% Job Training
Short-Term On-the-
Conveyor Operators and Tenders 400 500 30.0% Job Training
Short-Term On-the-
Laborers and Freight, Stock, and Material Movers, Hand 13,900 15,300 28.6% Job Training
Moderate-Term
On-the-Job
Tank Car, Truck, and Ship Loaders 200 300 26.7% Training
Source: Employment Development Department Labor Market Division
Data Inadequacies. NAICS category 48-49 does not capture all logistics activities. One
of the most egregious discrepancies in this data is the fact that the self-reported
numbers do not catch large retail distribution centers in the correct sector. Even though
these facilities are amongst the largest in warehousing and storage, they are most often
categorized under their retailer umbrella. In addition, NAICS does not yet have a clear
category for third-party logistics firms and some of the other newer types of logistics
firms that are emerging.
20

23. Industry Snapshot: Field Interviews
The foregoing data are useful in providing a bird’s eye view of the industry as a whole.
EDD and BLS data in particular give a sense of proportion and allow us to see the
regional significance of the logistics industry in Los Angeles County when compared to
nearby counties. It is also helpful to note that the historical trend is toward growth, a rare
assurance as of this writing, as we receive news of goods movement firms nationwide
closing up a substantial
portion of their
operations, and local
companies have
dramatically reduced
hiring.
However, the data also
have the limitations
discussed above. In
particular, the data
draw arbitrary lines
between categories of
firms and occupations,
and offer little on-the-
ground guidance to
workforce development
practitioners concerned
employing customers
at individual firms rather than analyzing the entire industry’s economic impact.
The following synopsis of interviews with dozens of industry representatives is an
attempt to characterize what will be most useful to CCD in continuing to implement the
LGMTA and place participants in goods movement firms.
METHODOLOGY
This report culls information from 45 interviews with representatives from goods
movement firms and other industry representatives. It represents the perspective
of a range of company sizes and types throughout the industry.
Throughout our research, our goal was to capture an accurate snapshot of the industry
by soliciting input from the widest variety of companies involved in the logistics sector,
with a special focus on warehouses and third party logistics firms (3PLs), as CCD
targets such companies in its placement efforts. We attempted to survey public storage
warehouses as well as large private and retail distribution centers, employing from 1 to
25 people, 26 to 75 people, 76 to 150 people, and over 150 people. Many of the
21

24. individuals we interviewed represented just one of several company facilities in the
Southern California region.
We turned to the California Employment Development Department (EDD) as our
starting point for research, downloading relevant Los Angeles County employer lists
from their website. 5 We also used a similar list of employers provided by the EDD per
CCD’s earlier request. (These two lists overlapped significantly.) It is important to stress,
however, that these lists served only as a foundation for our research. The majority of
our sources came either from other industry contacts, or from searches for specific
facilities or types of facilities. For example, many large retail distribution centers are not
counted in the Transportation and Warehousing NAICS category, as their umbrella
companies are categorized elsewhere. Such companies are major logistics employers,
but must be individually targeted for contact, as they are hard to locate in EDD Labor
Market Info reports.
Having secured sources for our research, we set out to make contacts in the industry.
Every week, we cold-called companies that we targeted from the EDD lists and web
searches, with the intention of setting up at least three meeting with company
representatives for the following week. We asked each contact for a face-to-face
interview where we would discuss their company, the logistics industry in Los Angeles
County, and the skills workers need to succeed in the industry. The main factor that
determined which companies we visited was whether or not an individual was willing to
meet with us, but we attempted to maintain a balance between different industry sub-
sectors and company sizes, as noted above. We secured 45 meetings total, out of
approximately 200 phone requests. These meetings took place from September 20 to
October 31, 2008.
We made an effort to set up as many meetings as possible before the height of the
industry’s peak season of September through December. However, it is not clear
whether the peak season affected companies’ willingness to speak with us, as we were
able to schedule nearly 25 interviews for the mid-peak month of October, 17 of which
we kept (we cancelled the rest due to other commitments at CCD). We also made no
attempt to schedule interviews during the months of November and December, aside
from those we cancelled.
In general, we met with company representative in three types of settings: typically in
face-to-face interviews with one to three representatives; three times by phone; and
twice as members of a larger “meet and greet” event organized by the company.
Whenever possible, we asked for site visits and photo opportunities, though companies
declined photographs almost without exception.
Face-to-face interviews and “meet and greet” events have significant benefits over
phone conversations, as well as any other methods of finding qualitative or anecdotal
5
“Employers by Industry.” California Employment Development Department. 7 December 2008.
<http://www.edd.ca.gov>. Path: Labor Market Info>Data Library>Industries>Find Employers>Employers by
Industry.
22

25. information about this
industry. Face-to-face
interviews offer the
opportunity to build
rapport over a meeting
that typically
approaches or exceeds
an hour in length. Most
industry
representatives
seemed to genuinely
enjoy our interviews,
and their enthusiasm
encouraged them to
explain the issues with
greater detail than we
received by phone. On
more than one
occasion, face-to-face
interviewees introduced
us to new contacts either in person or by phone. (One interview even led to an
impromptu visit to a trucking yard, where the owner of a 3PL was tending to some
damaged cargo - a Bentley headed for Ghana. His longtime friend in the industry asked
for resumes from the LGMTA, and we forwarded him five of them.) One final benefit of
face-to-face meetings is that we were able to leave promotional material about CCD
with each interview, and answer questions about the LGMTA.
Meet and greet events with multiple participants offer a unique opportunity to engage
with representatives when their guard is down. In a face-to-face meeting, a rapid-fire
succession of questions about a company’s practices can send off a red flag.
Sometimes it is easier to get this information when a company has already put together
a presentation that answers many questions and makes other questions seem more
appropriate and less threatening.
It is worth noting that we intended to do a series of interviews with representatives from
industry associations and temporary staffing agencies (often referred to hereafter as
“temps agencies” that place “temps” in jobs.) Industry associations such as the Foreign
Trade Association, the Council of Supply Chain Management Professionals, the Los
Angeles Customs Broker Association, Warehousing Education and Research Council,
the Los Angeles Transportation Club, and the Harbor Transportation Club are important
in disseminating information and networking, and as such they are a potentially valuable
resource for the LGMTA Advisory Board.
Temporary staffing agencies, as we will discuss in this report, are one of the primary
doors into the goods movement industry today. We hoped to find out whether it is
possible to identify temporary staffing agencies that provide higher wages or are more
likely to lead to permanent hire. However, other demands at CCD prevented us from
23

26. keeping several of these interviews, and consequently, only two industry associations
and one temporary staffing agency are represented in this report. It would be a good
idea to continue outreach to both types of organization. (Keep in mind that temporary
staffing agencies take more convincing before they will meet, as the industry is not only
competitive, but also aware of the stigma associated with temporary staffing.)
COMPANY TYPES AND OCCUPATIONS DEFINED
It is hard to make across-the-board generalizations about firms and functions in
the goods movement industry. We divide goods movement firms into three broad
types: third party logistics companies (3PLs), public storage warehouses, and
retail distribution centers. Each type of company provides a wide variety of
services, carried out by workers in several different occupations, mostly in the
office or on the warehouse floor.
We have already mentioned how government datasets make arbitrary distinctions
between the companies and occupations in the industry, making the accuracy of some
statistics less useful for workforce development practitioners. Our sources described a
web of industry relationships, occupations, and specialties that similarly defies easy
categorization, and requires some generalization. It became clear very quickly that
industry representatives define their own businesses by the work that their own
employees do, and by their relationships with customers and contractors.
After the first few interviews, it was clear that employers require their workers to also
think in these terms. As CCD’s goal is job training and placement, we have also chosen
to define the industry in broad categories: major services offered, which determine
employee tasks; generic types of firms, which sum up a company’s relationship to
others in the supply chain; and employee occupations, which are determined by the
other two areas.
These definitions are important to understand if CCD intends to gain credibility in the
industry as a whole, and to have a more intuitive understanding of the components that
must go into training.
Major Services Offered
While we visited a wide variety of companies representing several industry niches, all
companies offered some variety of the following services.
Break-bulk. Break bulk cargo traditionally refers to non-containerized cargo moved in
individual units such as crates, drums, and barrels. We find that many companies use
the term more generally, referring to any non-containerized or even containerized cargo
that must be repacked for separate destinations. Examples of such cargo include
chemical pellets, liquids, grains, even conventionally packaged freight heading for
several different endpoints.
24

27. Case picking. Companies with any storage component require workers able to operate
a variety of forklifts for case picking. This is simply taking a crated, boxed, or otherwise
contained product and moving it to a staging area for assembly into a larger package.
Cross-docking. Cross-docking is simply the act of moving goods from one vehicle to
another, often vehicles of the same type. For example, most large ground transportation
companies have a hub where goods come in through one truck dock, and leave for a
distribution center or other facility on another truck.
Customs Clearance. Many companies offer significant customs services, processing
necessary import and export documents, calculating duties and taxes, and abiding by a
web of regulations from different government agencies. Typically customs clearance is
one part of a larger freight forwarding function, and goods awaiting clearance sit in a
sequestered container freight station (CFS) on site. In most customs operations, all
customs employees work under one supervisor’s customs broker license.
Drayage. This is simply the act of picking up a shipment from the port and bringing it to
its next destination, typically a transloading facility or warehouse.
Freight consolidation. Most of the individuals who referred to “freight consolidation”
used this as an umbrella term for any warehouse activity that involved taking goods out
of a shipping container and reassembling them into unique shipments to be sent to the
customer, usually by palletizing them. Freight consolidation includes both pick and pack
and case picking functions.
Freight forwarding. Freight forwarders are non-asset based companies that make
shipping arrangements for other companies. Such arrangements can include arranging
drayage, booking space on an oceanliner, an airline, a freight train, or a freight truck,
arranging storage, processing customs clearance, and tracking freight. Typically, a
company that refers to itself as a 3PL provides some or all of these functions, including
- at minimum – arranging ground transportation.
Pick-and-pack. All storage companies of any size offer pick-and-pack services.
Essentially a more detailed version of case picking, pick-and-pack requires workers to
locate containers, disassemble the goods inside, and reassemble and label them for
their next destination.
Public Storage Warehousing. On its own this refers to a more traditional conception of
“warehousing.” Public storage companies sell space in their warehouse for their
customers’ goods. A very limited public storage operation will usually offer both racked
storage, “high-pile” storage, or both, pick and pack freight assembly, and freight
consolidation. some Sub-groups of public storage include general dry storage, cold
storage, and chemical storage.
25

28. “Your average freight forwarder is a warehouse, three cubicle,
and forklift type of operation. Dirty, nothing special. ”
– President, small South Bay 3PL
Transloading. This service is similar to cross-docking, but most references to
transloading specify moving goods from one mode of transportation to another; for
example, unloading a shipment from a rail car onto a freight truck.
Value-added. Value-added services are usually services that were once provided at the
point of manufacture – for example, labeling, tagging, hanging clothing, or assembling
store displays.
Types of Companies
An individual company in the goods movement industry can provide any number of the
services described above, and presumably others. Some companies that we contacted
provide all of these services, and some provide just one or two. Further complicating
things, companies that provide identical services often use different terms to identify
themselves. For example, many asset-based public storage warehouses that arrange
refer to themselves as 3PLs, as long as they arrange rail or truck transportation for their
customers. Similar warehouses use the term “3PL” only when referring to the trucking
companies they contract with. In addition, industry representatives often refer to other
companies by the more famous function of a parent company. For example, while all
the ocean shipping lines have separate 3PL divisions, a trucking company may still refer
to this 3PL division as “an oceanliner from China,” or a similarly generic term.
Given this lack of uniformity in describing the industry, any system of classification is
bound to have problems. While some of our own sources may disagree with the broad
categories presented below, we think that they are useful for a workforce development
program in conceptualizing the industry.
3PLs. Third party logistic firms are companies that provide any of the services
mentioned above on a contract basis, for other companies. These companies fall into a
wide spectrum, from small transportation companies to multi-national companies with a
global presence.
Companies that perform third party logistics services often refer to themselves simply as
3PLs. However, companies that provide an identical range of services may also identify
as “just a freight forwarder,” or “a transportation company,” or “a logistics company.”
They may also object to being characterized as any of these, though our sources used
all of those terms interchangeably at times. As mentioned, most international shippers
have a logistics arm that provides third-party logistics service, including running entire
distribution centers for individual customers. While we refer to DHL, FedEx, and UPS as
“package delivery” firms elsewhere in this report, we also count them as 3PLs because
26

29. they have sophisticated logistics divisions. Many industry representatives also call them
“freight integrators,” though this term seems to refer to any one-stop shop for freight
forwarding.
Public Storage Warehouse. This is a company, typically asset based, which focuses
on short- or long-term storage of customers’ goods. While very little remains of what
could be called “pure storage,” there are still companies whose main source of revenue
is floor space dedicated to other people’s freight. Case picking and pick-and-pack is
central to their operations, and they may or may not also offer drayage, provide or
arrange ground transportation, or operate a CFS. Public storage warehouses are further
divided into dry storage and cold or refrigerated storage facilities.
(Public storage warehousing is not to be confused with personal “public storage” or
“mini-storage” spaces that people use for their personal belongings, though such
businesses are classified as “transportation and warehousing” under the NAICS
system.)
Retail Distribution Centers. These distribution centers are typically non-asset based,
meaning that they lease all or most of their facilities, including building, trucks, and even
forklifts. They are owned by retail chains, grocery chains, automotive companies, and
other large businesses focused on distributing their goods to their own outlets or to
other companies’ retail shelves. They work with either 3PLs or different company
divisions to arrange pick-and-pack, freight assembly, shipping, transportation, and
value-added services. (In some instances a 3PL will take over the entire operation of a
company’s distribution center. We define this as a 3PL function.)
Occupation Types
There are a variety of specific entry-level jobs in goods movement, and each firm differs
in the variety and requirements of the occupations required by its own operations. In
general, most entry level jobs can be grouped into two types: warehouse jobs and office
jobs. Both types of entry-level jobs are typically open to individuals who do not have a
bachelor’s degree. Typically warehouse jobs require little skilled work, and often they
require some familiarity with Microsoft Word and Microsoft Excel. Office jobs require a
higher level of computer proficiency, including typing skills.
Warehouse/Material Mover Jobs
Pick-and-pack and/or “lumper”. This is the most general and least skilled of all the
occupations, and one that many LGMTA participants have performed in the past.
Material movers perform pick-and-pack duties, sort packages, and load and unload
packages weighing up to 50 pounds. The term “lumper” connotes more truck unloading
than pick-and-pack duties, but many view the terms as synonymous.
Forklift Driver. Forklift drivers load and unload pallets into containers and trucks, and
do case picking and assembly of orders to be shipped. Many LMGTA participants have
performed these duties in the past.
27

30. Value-added. Typically the domain of women by industry custom, value-added services
such as tagging, hanging clothes, and other last-minute minor alterations are often the
lowest paying jobs.
Office Jobs
Sales. Sales representatives solicit new customers and maintain relationships with
existing customers. Many companies have entry-level sales representative positions,
while others require some experience before hiring.
Customer Service. Customer service representatives often work with sales
departments and accounting departments, and can perform a wide range of
miscellaneous duties. Typically these include answering customer calls, tracking orders,
filing, and handling overflow from other departments.
Import or Export Agent. Import and export agents sometimes make up the bulk of a
logistics company’s workforce. Agents negotiate payment, book ocean, air, rail, and
ground transportation within the company or from other companies, and prepare many
of the documents required in customer transactions.
Customs Agent. Customs agents classify goods, prepare documents that must be
submitted to customs officials, and see shipments through the customs process.
Accounts. All logistics firms require some kind of in-house team that deals with
arranging and receiving payments. The Los Angeles locations of large companies often
handle accounts nationwide.
Dispatcher. Dispatchers are central to the operations of any company that does some
kind of ground transportation, including drayage. They route trucks, respond to any
issues that come up in the transportation of goods, and fit each day’s orders into the
tight schedule of the workday. In Los Angeles County, dispatchers must be able to
adjust and coordinate multiple pick-ups and drop-offs for every driver in the fleet.
Dispatch is not actually an entry-level job, as most companies require at least a year or
two of experience in a related position. Commonly, dispatchers started as drivers or in a
clerical warehouse job. Still, some LGMTA participants have done dispatch in past job,
and others may qualify for dispatch positions as well.
Other Types of Jobs
Driver. This is an entry-level position in the sense that the only educational or
professional requirement is a Class A Commercial Driver’s License (CDL).
Courier. Due to the rigors of the job, drivers are always in demand, and several of our
sources stress that a CDL gives an individual more options in the industry.
28

31. Courier. Courier and messenger services typically perform many of the package
delivery services that DHL, FedEx, and UPS do. However, they tend to operate only on
a regional or local scale. These companies are not necessarily what LGMTA
participants think of when they apply for a logistics training program, but according to
the EDD, couriers make up a larger industry subsector than companies specifically
designated as warehouses. 6 They also have a number of driver jobs that often do not
require a CDL.
IS LOGISTICS A LOS ANGELES GROWTH INDUSTRY?
Industry representatives shared a unanimous opinion that Los Angeles will be the
center of the Southern California goods movement industry for the foreseeable
future. Los Angeles County locations are close to the ports, allow for lower
transportation costs, and are more suited to serving varied (and often smaller)
customers.
One of CCD’s major goals for this report was to determine whether logistics is a growth
industry in Los Angeles County. We take the term “growth industry” to mean several
things: opportunities for individual career growth, wage increases, and perhaps most
obviously, growing or at least stable opportunities for entry-level employment for the
foreseeable future.
The short answer is yes, logistics is a growth industry in Los Angeles County. According
to the industry representatives we spoke with, we can count on goods movement to be
a major source of entry-level jobs in the long-term. Our survey interviews yielded a
unanimous belief that goods movement is in Los Angeles County to stay, regardless of
the remarkable growth of the industry in the Inland Empire counties of San Bernardino
and Riverside, and the current recession.
At first glance, the Inland Empire seems like it should be more attractive to companies
across the board – land, labor, and city taxes are generally all cheaper there, while
weight restrictions on individual freight trailers are less stringent than in Los Angeles
County. However, employers cited a number of reasons that Los Angeles County
remains central to the goods movement industry in the Southern California region.
(Much of what follows compares Los Angeles County and the Inland Empire, but leaves
out discussion of Orange and Ventura Counties, which also have substantial logistics
industry presence. This is due in large part to the fact that the Inland Empire continually
came up in our interviews, since many companies have locations in both Los Angeles
County and the Inland Empire.)
Proximity to the port. As one interviewee put it, “San Pedro is beachfront property. I
look out my office window and I see the gantry cranes.” Eighteen of our sources offered
6
“California Regional Economies Employment Series, Los Angeles.” California Employment Development
Department. 23 December 2008. <http://www.edd.ca.gov> Path>Labor Market Info>Data Library>California
Regional Economies Employment Series>Los Angeles County.
29

32. detailed comparisons of the logistics industry in Los Angeles County and the Inland
Empire. Eleven of those 18 mentioned the Ports of Los Angeles and Long Beach as the
primary reason for the long-term significance of goods movement firms in Los Angeles
County. Goods that come into either port are just a mile or two from warehouse hubs
like Wilmington or Long Beach, just 20 miles from major inland distribution hubs such as
Vernon and Commerce, and 20 miles from Los Angeles International Airport (LAX) and
countless air freight operations clustered near there. By contrast, Inland Empire logistics
hubs like Ontario are 50 miles from the ports.
The fact that many companies prefer real estate closer to the ports may seem obvious,
but companies cited a surprising number of unique reasons that close proximity to the
port makes good business sense.
• Ability to make up to three trips to and from the ports per day, versus one trip per
day in the Inland Empire.
• Lower fuel and labor costs due to less time spent on the road and in heavy traffic.
This translates to a lower drayage cost from the port to the warehouse or
distribution center.
• Drayage from the port to a Los Angeles facility takes considerably less time than
drayage from the port to an Inland Empire facility.
• Los Angeles has a larger workforce, “and labor in the Inland Empire is not
necessarily cheaper in every instance.”
• More temporary staffing agencies.
• Facilities of a size and configuration that allow public distribution companies to be
more flexible, in response to the needs of multiple small vendors.
• Proximity to customers.
Other reasons for companies to locate in Los Angeles County all connect in one way or
another to these benefits.
Transportation costs. Transportation is at the root of all activities in the logistics
industry. Indeed, several of our interview subjects do not even count non-transportation
functions such as materials handling in their own definitions of the word “logistics.” The
cost of transportation, particularly ground transportation, is something of an obsession
among warehouse and transportation managers. There is little wonder why: one
warehouse manager told us that by saving one-tenth of a mile per gallon in truck fuel
costs, he saved his company $1.2 million in one year.
Even in the best of times, the cost of getting goods from the ports to the Inland Empire
is much higher than it is to most Los Angeles County locations. As the Operations
Manager of a large shipping company’s logistics arm described:
You have all these costs to get things out from the port, and they go up if you’re
going to the Inland Empire. There’s fuel, and the time it takes to get there.
Riverside [a major freight destination] is off of Highway 60, which is the worst
road in Southern California between 3:00 PM and 8:00 PM, with all the
30

33. congestion. You’re not only paying for the fuel to sit in traffic, but you’re also
paying a lot more for the labor to sit there in the truck.
It is important to note that we conducted our survey during a period of serious volatility
in diesel costs. The cost of a gallon of diesel fuel on the west coast typically varies by
several cents at most from month to month, and never varied by more than $0.25 month
to month from January 1994 to August 2005. 7 (Comprehensive pre-1994 diesel rates
are not available.)
By contrast, diesel costs in 2008 were erratic, changing by over $0.25 in 8 months of
the year, and as much as $0.70 from on month to the next. West coast diesel costs
topped out at a record-setting $4.85 per gallon in June and July 2008, up $1.47 from the
beginning of the year, and marking an increase of $3.22 from the beginning of 2004,
when costs began to increase dramatically.
Figure 14: West Coast Price of Diesel Fuel Cost per Gallon
Diesel Fuel, West Coast
Cost per Gallon (Dollars)
$6.00
$5.00
$4.00
Dollars
$3.00
$2.00
$1.00
$0.00
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Date
Cost per Gallon (Dollars)
Noting the volatility of diesel prices, one interview subject went past the frustration of
dealing with freeway congestion and suggested that industry insiders now see fuel costs
in a fundamentally different light. “What we have to look at now is, land may be more
expensive in L.A., but land cost is a fixed cost. Fuel used to be sort of a fixed cost, but
now we have to look at it as a variable cost. So it can make fuel [to the Inland Empire]
and labor [in Los Angeles County] almost equal in cost.”
7
“Weekly Retail Gasoline and Diesel Prices.” Energy Information Administration. 20 December 2008.
<http://eia.doe.gov>. Path: Petroleum>U.S. Data>Prices>Weekly Retail Gasoline and Diesel Prices.
31

34. “Los Angeles County has great infrastructure, and it’s
central, which means you’re closer to your customer.” –
Warehouse Manager, South Bay freight forwarder
The owner of a Vernon 3PL struck a similar note when he compared the costs and
benefits of Los Angeles County and the Inland Empire. quot;We've looked at the Inland
Empire, but transportation costs outweigh the lower land cost now. Transportation to the
Inland Empire would add $100 to each container we send out.”
If the extreme unpredictability of fuel costs in 2008 does have the long-term effect of
redefining fuel as a serious variable cost instead of “sort of a fixed cost,” then this will
resonate throughout the industry for some time. The consensus seems to be that
logistics firms will think twice before locating further from the ports, causing
retrenchment of the industry in Los Angeles County.
It seems unlikely that major distribution centers would relocate to Los Angeles County
from elsewhere, given their need for more land and newer buildings than much of Los
Angeles County has to offer. (We deal with this at length below.) But industry
representatives are in agreement that transloading facilities, cold storage facilities, “mid-
sized companies,” and companies with a client base in Los Angeles County or a large
number of customers will all prefer Los Angeles County in large part because
transportation from the port to Los Angeles County is so much cheaper than the
alternatives.
Needs of individual companies. There are clear differences between the types of
goods movement companies that cluster in Los Angeles County and those that tend to
locate in the Inland Empire. In general, the Inland Empire’s larger facilities serve few
companies, and often just one company, reducing the complexity of packaging activities
and benefiting from automation of facilities. By contrast, Los Angeles County facilities
are smaller, but they also have the flexibility to serve a wide variety of customers.
The real estate market is perhaps the single greatest factor determining these
differences. The goods movement industry in Los Angeles County stretches back to the
19th century. Only a relative few buildings in Los Angeles County are this old, but most
are significantly older than those in the Inland Empire, and there is very little land
available for newer facilities. Industrial land in Los Angeles County is expensive – one
interviewee put it at a monthly lease cost of $1.60 per square foot, compared to $0.52
per square foot in the Inland Empire -- which makes it nearly impossible to acquire and
redevelop enough land for a modern distribution facility. 8
This means that the Inland Empire is now the domain of the large distribution centers,
essentially stopover and processing facilities for one company’s products. A drive
8
Give the whole thing about land downtown being more valuable as residential as an interesting side note. FIX
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35. through the area makes this clear, as buildings occupied solely by Toyota, Wal-Mart, K-
Mart, Target, Nordstrom’s, Ford, Staples, Mattel, and companies of comparable size dot
the landscape of cities in Riverside and San Bernardino Counties. These buildings are
typically between 200,000 and 500,000 square feet, though it is not unheard of for one
company’s distribution facilities in the Inland Empire to surpass 1 million square feet.
(There are, of course, public storage warehouses, transloading facilities, and other
logistics functions in the Inland Empire. Still, our contacts emphasized that the overall
trend is toward large distribution centers.)
This is not to say that there are no large distribution centers in Los Angeles County.
Grocery chains with stores in Los Angeles County also require distribution centers
there, and Anheuser-Busch’s Van Nuys production and distribution facility is just one
example of a massive local distribution center. Several of the people we met with
described Gardena, Torrance, and Carson as rich with distribution centers, and
companies such as Huffy, Kubota Tractor, Frito-Lay, Honda, Toyota, and Smart & Final
do have facilities in those cities. But by and large, Los Angeles County is home to a
wider variety of goods movement companies that can work with the land and facilities
that are available here. Such companies include the following:
• Air freight forwarders. These companies locate near (LAX), and often use
warehouses as small as 10,000 square feet.
• Transloading and cross-docking facilities for 3PL’s. Large 3PLs locate these
facilities in Los Angeles County for their ground transportation divisions. Typically
such facilities have no storage and focus only on moving freight from inbound
vehicles to outbound vehicles.
• Package delivery services. Companies such as DHL, UPS, and FedEx do the
work of 3PLs as well as traditional package delivery. FedEx and UPS in
particular are decentralized operations with a variety of truck yards and
processing facilities throughout the Southern California region. The combined
freight of the ports and LAX lead these companies to locate some of their largest
cities between the two, in South Bay cities like Torrance and Redondo Beach.
• Public dry storage facilities. The more traditional asset-based warehouses are
found wherever there is even a small goods movement presence. They thrive in
the older warehouse of up to 200,000 square feet.
• Public cold storage facilities. Refrigerated cargo is more expensive to
transport and store, which makes Los Angeles County more attractive for several
reasons. Representatives from cold storage companies agree that most
refrigerated freight is not worth the additional cost of draying it to the Inland
Empire. Refrigerated storage companies that we spoke with pay from $20,000 to
$50,000 per month on electricity, and would pay up to 5 percent more if they
moved further inland. The City of Vernon owns its own electric utility, and offers
cheaper rates that have attracted an agglomeration of cold storage firms for
years.
• Courier services. These companies perform many of the package delivery
services that UPS, FedEx, and DHL perform, but often with more specialized
goods such as medical supplies or supplies for local businesses.
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36. “There are over 40 [goods distribution facilities] empty in the
Inland Empire. If you go to San Pedro, there is only 1 or 2.”
– Operations Manager, 3PL branch of international shipping line
Local economic development officials worry about the age and obsolescence of Los
Angeles County industrial buildings, and as we did not consider this question a part of
our research, we cannot disagree with their concern. However, it seems to be the case
that for the type of business noted above, Los Angeles County and its “obsolete”
buildings have some real benefits over newer, more state of the art buildings in the
Inland Empire. As the owner of a textile-distributer-turned-3PL said:
The Inland Empire was attractive 10 years ago because of cheaper rates, new
infrastructure, and an educated labor force – you have colleges with Logistics
A.A. degrees there.
They have these larger warehouses of 200,000 to 500,000 square feet, but
with a facility that size, every customer needs to bring in $60,000 per month in
revenue to keep it running. Customers who pay $2,000 to $5,000 per month
prefer Los Angeles County. Transportation to the building is cheaper here. Also,
larger warehouses are not equipped for the different procedures required by
smaller companies. [Such differences include: freight shipped in a variety of
sizes, different labeling positions required by different companies, and different
handling procedures.]
This individual’s assertions imply something beneficial for the labor market as well.
While automation in the logistics industry as a whole threatens to reduce the labor force,
Los Angeles County is home to the type of firms that will continue to need employees.
Their customers require flexibility, which means that their operations are more labor
intensive – and as automation is not suitable for such flexibility, this is not likely to
change soon.
An overwhelming majority of our sources see Los Angeles County as the long-term
center of the Southern California goods movement industry. This is consistent with
CCD’s understanding of the industry as a large long-term employer for county residents.
However, the question of whether the industry meets some of CCD’s other job
placement needs is a more complicated one.
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37. ENTRY LEVEL EMPLOYMENT AND CCD STANDARDS
The logistics industry provides limited entry-level opportunities for CCD wage
targets, but good long-term career prospects. Entry-level wages across the
industry average approximately $9.00 per hour. By targeting placement efforts to
certain industry sub-sectors, CCD can expect to make some placements at $10.00
to $15.00 per hour.
Wages
While we kept an eye on a variety of factors in evaluating jobs in the goods movement
industry, wages remained our point of departure throughout our research. This is for two
reasons: first, the obvious fact that a paycheck is the individual’s first reason for taking a
job, but also because CCD has specific income targets required by Workforce
Investment Act (WIA) and other contracts that fund the organization’s work. These
contracts require CCD to place customers in employment at a starting wage between
$11.00 and $14.00 per hour.
We have wage rates at individual companies for more warehouse jobs than office jobs,
as our understanding early in the research was that LGMTA participants were likely to
seek employment on the warehouse floor. However, several of our early interview
subjects mentioned that starting office wages were higher than those on the warehouse
floor, so we began to track those wages as well. While the following focuses primarily
on warehouse wages, interviewees indicated that entry-level office jobs often pay from
$10.00 to $15.00 per hour, and as high as $25.00 per hour. (This is probably due in part
to the fact that such jobs are seen as skilled work. As noted in the “Occupation Types”
section, office employees must be very good with computers.)
Figure 15
35

38. “If a guy has a forklift certificate, it makes my life easier. I’ll
pay him $12.00 instead of $8.00”
– President, Gardena public warehouse and distribution center
With CCD’s target wage range as a starting point, the results of our research are mixed.
Of the 45 interviews that we conducted, we have wage data for at 31 companies. Three
companies declined to discuss wage data. Several other industry representatives were
from trade organizations instead of companies, and a few conversations with employers
were similarly focused on the entire industry instead of their individual company, and so
we have no wage data for those companies. In general, starting wages among the
companies we interviewed are well below CCD’s $11.00 to $14.00 target. For jobs on
the warehouse floor, the median starting wage among all companies that provided wage
data is $9.00 per hour.
Some of our sources weighed in on their own justification for low entry-level wages.
Generally, employers cited the competitive nature of the industry, due to the
proliferation of companies and an industry-wide lack of consolidation. Potential
customers have a number of options for storage and distribution, which allows them to
require low rates. Because payroll costs more than energy or other overhead,
companies offer low rates by lowering wages or reducing hiring when possible.
This is not to say that CCD’s entry-level wage targets are impossible to reach, or even
that workers will not eventually exceed CCD’s targets. The mean starting warehouse
wage in our pool of interviews is $10.42 per hour, so while half of the companies we
spoke offer entry-level wages of $9.00 or less, seven companies balance out the
average with entry-level wages of $12.00 to $18.00 per hour for warehouse work. (Most
of these are unionized companies or in heavily unionized subsectors, as discussed
below.) In addition, the highest hourly wage earners at most companies take home
between $15.00 and $25.00 per hour. Even among companies that start employees out
at minimum wage, the typical hourly wage ceiling is nearly $15.00. (The lowest hourly
wage ceiling we recorded was $12.25 per hour, though it bears mentioning that this was
at the retail outlet of an outdoor goods chain, the only retail establishment that we
interviewed.)
The distinction between office work and warehouse work was perhaps most obvious in
the way people referenced each. After discussing wages, one employer said in
reference to office jobs, “Oh, they get taken care of.” Similar comments were not
uncommon, with another responding, “Oh, those positions are salaried, so you’re talking
$30,000 to start.” By contrast, one freight forwarder had the following to say about the
warehouse floor: “You had good wages in the 1970’s, but not really now.” Two others
36

39. mentioned that wages on the warehouse floor have stagnated or gone down during their
careers. 9
Another interview subject mentioned that this decline has also affected drivers, saying,
“[At a specific major grocery chain] 10 years ago, you could make $18.00 to $20.00
dollars an hour, but you can’t make that kind of money now.” We interviewed a
unionized branch of the grocery chain he mentioned, and their contract does give them
from $18.00 to $20.00 per hour. However, this interviewee’s comment may still be true.
The company has split in the last several years, and he may have been referring to
drivers employed by either of the new companies, or a 3PL that works for one of them.
Either way, this wage marks a decline in real terms during the time period he mentioned
– among earners in the Los Angeles region, $18.00 to $20.00 today is equivalent to
$13.49 to $14.99 in 1998. 10
Our discussions with industry employers represent a survey of a wide range of
companies, but the wage situation is very similar across the board. CCD is unlikely to
place many participants in entry-level warehouse jobs that pay $11.00 or more per hour.
However, by targeting job placement efforts, CCD can find such jobs. In particular,
forklift jobs and office jobs offer wages at $10.00 and often above. Such jobs require
relatively little training, and they are available to people who do not have college
degrees.
9
Of all of the employers we spoke with, only one admitted to ever paying less than minimum wage. His company, a
small air freight forwarder, used to employ primarily undocumented workers for $7.00 per hour, until the
government cracked down on such behavior in recent years.
10
“Consumer Price Index, All Urban Customers” (Los Angeles-Riverside-Orange County, CA). Bureau of Labor
Statistics. 23 December 2008. <http://www.bls.gov > Path: Subject Areas>Inflation>Inflation &
Prices>Databases>All Urban Consumers>Multi-Screen Data Search.
37