Warehousing, logistics the future, OCEDC says

The Orange County Economic Development Corporation has its eye on a collaborative approach to logistics, distribution and warehousing that includes recruiting companies specializing in the storage and movement of consumer and manufacturing goods.

“Orange County has seen tremendous opportunity in recent years,” said Jessica Hill, OCEDC executive director.

“This strategy will allow us to continue in a growth trajectory, capitalize on existing developments and create opportunity for sustainable success.”

The OCEDC issued its Industry Growth Strategy in partnership with VisionFirst Advisors and Foremost Quality Logistics earlier this spring.

The strategy targets the recruitment and expansion of the logistics distribution and warehouse industries but also provides valuable resources to promote all sectors of Orange County.

The report takes a look at the county’s demographics, highlighting the positive and calling out the negatives.

For instance, only 80.1% of OC’s 25-54 prime labor force is employed, lower than the rate for the state (80.7%) and nation (82.1%). But OC has a higher rate of high school grads (89.7%) than the state (84.7%) or nation (89.1%).

And the fact that only 2.8% of OC’s workers are union members is listed as “attractive to manufacturing, transportation and warehousing expansion.”

Of course, the Sabine River provides access to the sea and the county’s railroads and interstate highway system make this a perfect logistics hub.

However, traffic jams caused by the ongoing repair of Interstate 10 bridges between Orange and Lake Charles is a problem to be concerned about.

The 2020-21 pandemic saw homebound consumers feed a 33% increase in e-commerce but the unpredictability of the coronavirus showed supply chains optimized for cost and efficiency proved to be fragile and lacked resiliency.

Good news: The pandemic forced businesses to embrace digitization, which should lead to improved service levels.

The e-commerce boom created high demand for warehousing space and a tightened labor market is leading to more automation.

The 108-page Industry Growth Strategy available on the website (orangecountyedc.com) recommended the OCEDC:

-- improve internal and external messaging;

-- increase business development outreach;

-- align industry and educational partners, and;

-- develop key performance indicators.

Aligning industry with educational partners is a major need everywhere.

Already, matching demand for workers with skilled workers is important. It’s expected to increase in importance as industries develop new technologies, the report says.

Current figures show 29.3% of jobs in OC require a two-year certificate or degree or higher and 33.7% of the population has a two-year degree or certificate or higher.

The county’s residents with some college or higher is 54.8% compared to employers only requiring 44.4% of similar education and training.

Some workers in Orange County commute from more than 100 miles away, in Harris County, and vice versa for Orange County residents going to work in Harris County.

But within a 45-mile range of Orange, the area that would be the home base for most working in a new warehouse with 150 or 250 jobs, employers would require 41.8% of those jobs would require some form of long-term training, compared to 34.9% of the regional workforce having had the long-term training.

So local high schools and higher ed institutions need to guide more students to train for warehouse work.

Orange County has a lot to like from a potential warehousing and logistics expansion:

n Interstate 10 and five major highways.

n Burlington Northern Santa Fe, Kansas City Southern and Union Pacific rail lines.

n Orange County Airport, Jack Brooks Regional Airport and Lake Charles Regional Airport.

n Sabine-Neches Waterway, the Port of Orange and access to the Port of Beaumont and the Port of Port Arthur.

n Strong pipeline logistics.

The study said manufacturing is Orange County’s largest industry sector, both in terms of employment and GDP. Per covered employment establishment counts, there were 77 manufacturing establishments in Orange County, Texas, in 2020, unchanged from 2010. Manufacturing produced $1.8 billion in GDP in 2020, representing 53.6 percent of Orange County’s total GDP.

Over the 2010–2020 period, Orange County has seen a 2.6 percent average annual increase in manufacturing contributions to GDP.

The output per worker is $1,269,000, more than twice the national average ($514,000). A higher output per worker leads to increases in wealth and higher average standards of living in the region, the study said.

As of mid-2021, manufacturing establishments in Orange County were estimated to make $3.9 billion in annual purchases from suppliers across the United States, with about $1.1 billion (29%) of those purchases being made from businesses located within Orange County.