CERRITOS, Calif. -- The next 20 years will see a boom for warehouse operators in Southern California as the square footage of warehouse and distribution space is projected to increase 315 percent.
But this potential, however, will only be realized if regional planners develop an efficient inland distribution system that reduces transportation costs and significantly mitigates air pollution, said Jim Goswell, deputy executive director of the Southern California Association of Governments. SCAG is the metropolitan planning organization for the region.
Goswell told a meeting of the International Warehouse Logistics Association Wednesday that efficient, low-polluting transportation will be the key to growth of the distribution industry as warehouse development takes place farther from Los Angeles.
With more than 1 billion square-feet of industrial real estate, Southern California is the nation's largest hub for warehouses and distribution facilities. Projections indicate that the inventory over the next 20 years will triple, with 3.2 billion square-feet of warehouse space coming on line. This will produce an additional $2 billion a year in lease revenues and will add 1 million logistics jobs.
Much of the warehouse development so far has taken place close to the ports of Los Angeles and Long Beach and in the Inland Empire about 50 miles east of Los Angeles. Those areas are mostly built out, however, and community groups oppose further warehouse developments on what little space is left.
As a result, logistics centers are beginning to emerge 75 miles or more from the ports in the eastern Inland Empire and near Victorville in the high desert.
The planning group is considering several possible infrastructure developments to serve these emerging regions. One proposal calls for truck lanes, with tolls, on an 18-mile corridor along the I-710 freeway that serves the ports; a 38-mile east-west corridor that would connect with the I-710, and an 86-mile corridor along I-15.
The tolls needed to fund these projects would be as much as $70 per trip. However, SCAG calculated the cash value of time savings in an efficient truck corridor at $73 per hour and determined that the projects would save shippers $103 on a trip to downtown Los Angeles, $232 to Ontario in the Inland Empire and $305 to Victorville. New trucks burning ultra-low sulfur diesel fuel would significantly reduce diesel pollution.
A more exotic solution would be to develop a magnetic levitation transport system for freight. The 90-mile long maglev system would cost $19 billion to construct and $296 million a year to operate and maintain. Since it would produce zero pollution, it would be more acceptable to local residents. The technology is already being used in some countries for passenger transportation.