Easy Access to Major Markets, Cargo Efficiency, and Prime Location
The heart of the East Coast – This location has catapulted Greater Baltimore’s logistics industry into one of the strongest among the top 25 largest metropolitan statistical areas (MSAs) nationwide, pumping billions of dollars into the local economy and generating thousands of jobs.
The Region’s significant rail and port assets and access to major highway networks underpin multiple modes of transport to the sector and foster significant jobs and economic development. With easy access to CSX and Norfolk Southern rail lines and outstanding highway access, the Port of Baltimore has become the 10th busiest US port and one of only four East Coast ports with the 50-foot deep channel necessary to accommodate post-Panamax ships. As the eastern port closest to the Midwest with on-dock rail, cargo from the Port can reach two-thirds of the nation’s population and 35% of the U.S. manufacturing base overnight, and is the #1 US port for the handling of cars, light trucks, heavy farm and construction machinery.
Greater Baltimore’s easy access to major retail markets in Baltimore, Washington DC, and the mid-Atlantic region has fueled growth of logistics management – aka distribution – hubs throughout the Region, including significant expansion in Cecil, Harford and Baltimore Counties.
Fast forward to today, over four months into the COVID-19 pandemic. The logistics industry has felt the impact of the almost overnight “flipping of the switch” of the Nation’s economy with commercial activity – retail, office, services – grinding to a stop. The crushing demands for consumer goods only available on-line challenged even the largest e-commerce providers to deliver within a reasonable period of time. Those retailers deemed “essential,” including grocers, pharmacies and building supply stores, quickly ran out of product, increasing the reliance on e-commerce to provide basic necessities.
Retailers with an e-commerce platform in place who had to severely limit access or completely shutter stores found themselves challenged to secure inventory and provide the near-immediate delivery that online shoppers had come to expect pre-pandemic. The suddenness of Covid-19’s descent on the nation shined a spotlight on weaknesses in supply chain networks. With the shut down of nearly all brick-and-mortar retail forcing an exponential increase in on-line shopping, the ability to quickly move product into and out of distribution and fulfillment centers became critical.
The ability to adjust to severe supply-chain disruptions, including those caused by natural disasters such as earthquakes and hurricanes, is largely dependent on a company’s understanding of its supply chain structure, the assessment of which suppliers of parts and/or products are most at risk, and the identification of backup options to secure limited inventory.
Technology will also be a major factor in supporting a company’s ability to deal with local and global shocks that impact the supply chain. The linear supply chain model is moving into digital supply networks that break down silos and enable A-to-Z visibility, flexibility and optimization. As with other “traditional” industries such as manufacturing, the use of artificial intelligence, the Internet of Things, and robotics are being applied to the ability to anticipate, prepare for and survive major supply-chain challenges.
Across the country, COVID-19 restrictions are easing and brick-and-mortar stores are opening. However, e-commerce – already seeing significant growth over the past few years – will continue to be a major source for consumer goods. With growing customer expectations and demand for near immediate delivery, the importance of strategic locations for receiving, storing and distributing these goods will only increase and the strength of the supply-chain network will become central to a resilient economy.
For the most part Greater Baltimore’s logistics industry has not seen the level of disruption experienced in other areas of the country. It has, in fact, benefitted from the Region’s excellent highway, rail and port infrastructure in handling the significant increase in demand due to the reliance on e-commerce to supply goods to retailers and manufacturers alike.
In Cecil County, many of the logistics management companies in the Principio Business Park are not only weathering the pandemic storm but are also thriving. Companies such as Lidl, Amazon and KeHE are hiring staff needed to meet the increased demand. The 1,200 acre former Bainbridge Naval Training Center, now ready for redevelopment into a mixed use complex, is seeing a significant uptick in interest from industrial uses that will benefit from its location right off of I95. Many of the logistics management centers located at Harford County’s Perryman Peninsula have also experienced increased demand and have not reported issues with the supply chain network, including Clorox, Rite Aid and Kuehne & Nagel.
The pipeline of strong interest for logistics management/fulfillment centers and manufacturing has been steady at Tradepoint Atlantic in Baltimore County with its rail and highway access, and private deep-water berth. Construction of new facilities also continues with the partnership between government and the private sector ensuring that facilities will be delivered on schedule. Companies such as Amazon, Home Depot, and Floor Décor are all experiencing significant growth to address the demand from online customers.
The Port of Baltimore, however – along with most major ports in the U.S. – has experienced a drop in cargo volume directly attributed to the global pandemic and the shutdown of business from major suppliers in Europe and Asia. Ranked 11th among major U.S. ports for cargo handling, last year the Port handled a record 43.6 million tons of cargo, including more than 11 million tons of general cargo at its public marine terminals. As of April at the State-owned marine terminals, general cargo was down 7%, containers were down 6%, and cars and light trucks were down 22%. All those categories had record years in 2019.
On July 22nd, William P. Doyle will take over as the Executive Director of the Maryland Port Administration after the Port’s long time Director, Jim White, stepped down after 18 years at the Port’s helm. Bill Doyle shared the following up-to-the minute information for this month’s edition of Region On Point:
Greater Baltimore is proud of its position as the heart of the East Coast. The entire Region boasts a host of assets that attract logistics management, fulfillment, warehousing and manufacturing interests due to the strategic benefits of its multi-modal transportation network and location along the mid-Atlantic seaboard. These unique attributes fuel what industry experts agree will be continued growth in e-commerce and a renewed focus on domestic manufacturing and suppliers.
Access the full EAGB June 2020 Region On Point newsletter here.
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