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Transportation, Distribution and Logistics in Indiana

Transportation, Distribution and Logistics in Indiana. Reha Uzsoy, Ph.D., P.E. Director, Laboratory for Extended Enterprises at Purdue Professor of Industrial Engineering (765) 494-0829 uzsoy@ecn.purdue.edu Supported by the Central Indiana Corporate Partnership. Strengths in Indiana.

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Transportation, Distribution and Logistics in Indiana

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  1. Transportation, Distribution and Logistics in Indiana Reha Uzsoy, Ph.D., P.E. Director, Laboratory for Extended Enterprises at Purdue Professor of Industrial Engineering (765) 494-0829 uzsoy@ecn.purdue.edu Supported by the Central Indiana Corporate Partnership

  2. Strengths in Indiana • Location and infrastructure • Major interstates, crossroads of America • Extensive industrial base that is used to operating in demanding TDL environments • JIT logistics for the auto companies • Strong universities • Extensive network of regional campuses and community colleges

  3. Indiana State Product • Manufacturing dominates in Indiana’s economy • Up 27% to 32% • Vs. US 16% to 17% • TDL also major • Up 8.2% to 10.3% • Comparable to US • Only growing IN share except manufacture • Probably much more internal to companies

  4. Indiana Employment • Productivity increase makes jobs grow more slowly • Mfg 26% to 22% 605K to 688K • TDL still major • Up 7.8% to 8.3% 181K to 258K jobs (without internal)

  5. TDL Sectors • TDL has two parts • Transportation 33-37% of product, 38-42% of jobs • Wholesale/distribution nearly twice as big

  6. Indiana Wages per Job • TDL wage growth (real + inflation) keeping pace with Average and Mfg • TDL in 2000 is 13% below Mfg but 22% above Average and 130% above Retail

  7. TDL Effects on Other Industries • Input-Output multipliers try to estimate the impact of economic activity in one sector on the whole economy • For purposes of this study we used Regional Input-Output Multipliers (RIMS II) information purchased from the U.S. Bureau of Economic Analysis (BEA) • Based on 1997 national benchmark data, in combination with 2000 regional and national output and employment estimates • Separate values for Indiana alone, and whole United States

  8. Two Directions • We considered multiplier effects in two directions • First, what is the full economic impact of TDL activity within different categories? • On total demand, wages, and employment • Second, what would be the impact on TDL demand of expanded manufacturing activity, especially in high tech “Battelle” categories? • Both done for all U.S. and for Indiana alone

  9. TDL Impact in U.S. • Each $ of US TDL activity yields an average $2.75 in the all demand, and $0.83 in earnings • Each $M of US TDL activity yields an average 23.20 jobs • Some sectors like Freight Forwarders have higher yield (Source: U.S. BEA - RIMS II Multipliers. Averages unweighted)

  10. TDL Impact in Indiana • Each $ of IN TDL activity yields an average $1.89 in the all demand, and $0.54 in earnings within IN • Each $M of IN TDL activity yields an average 18.01 jobs within IN • Smaller values vs. US due to some inputs and indirect activity being realized outside IN (Source: U.S. BEA - RIMS II Multipliers. Averages unweighted)

  11. Mfg Impact on TDL in U.S. • Each $ of US high tech mfg yields about $.14 in the Wholesale Trade and $.09 in Transportation, or total $0.23 • Wholesale values are similar for Other Mfg, but Transportation is higher, probably due to heavy volumes of bulk material in low tech mfg (Source: U.S. BEA - RIMS II Multipliers. Group values unweighted averages)

  12. Mfg Impact on TDL in IN • Each $ of high tech IN mfg yields about $.09 in the Wholesale Trade and $.05 in Transportation within IN, or total $0.14 • Like US, Wholesale values are similar for Other Mfg, but Transportation higher • Smaller values vs. US due to some inputs and indirect activity being realized outside IN (Source: U.S. BEA - RIMS II Multipliers. Group values unweighted averages)

  13. And So… • Case for TDL as an important part of the Indiana economy appears pretty solid • Potential for significant growth in the future • Significant effects on other industries in the state as well as employment • Many advantages in Indiana! • Even the competition says so!

  14. Vision • Indiana as the home of an innovative, world-class TDL sector supported by creative public-private partnerships, innovative technology firms and enlightened, informed economic policies developed with the participation of all stakeholders

  15. Role of Higher Education • Provide intellectual capital through federal and industrial research • Work with stakeholders to support economic policy decisions • Significant role in workforce development • We are all in this together!!

  16. Current Status • TDL initiative located in Purdue’s Center for Advanced Manufacturing • 21st century proposal submitted with significant industrial, academic support • Not successful • Currently reworking concepts, seeking industrial and academic partners

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