Trade, logistics support many of Southern California’s good paying jobs but automation is coming – The Pasadena Star-News

Trade and logistics is big business in Southern California and automation is playing an increasingly bigger role as the industry seeks to remain competitive.

Thats the takeaway of a new report from the Los Angeles County Economic Development Corp. The study reveals that 598.3 million tons of freight valued at $1.7 trillion moved throughout the region in 2015. That equated to a daily average of 1.6 million tons valued at $4.7 billion.

Needless to say, all of that activity fueled lots of jobs.

The LAEDC report shows that the regions trade and logistics sector employed 580,450 direct payroll workers in 2015, a 9.7 percent increase since 2005. An additional 273,840 jobs were supported through indirect effects and another 310,490 were supported by induced effects, creating a total employment impact of nearly 1.2 million jobs.

Indirect jobs include workers who dont directly produce goods or services but make their production possible or more efficient. Induced jobs take into account employees who work at local restaurants, gas stations, supermarkets and other businesses where trade and logistics workers spend their money.

The Inland Empire supported about half of those jobs and Los Angeles County supported another 40 percent.

The pay isnt bad. The average annual wage in the trade and logistics industry in 2015 was $63,130, about 14 percent higher than the $55,310 average annual wage for all industries in Southern California.

Wages were much higher in certain segments of the industry. Those involved in support activities for water transportation earned an average of $111,120 a year, for example, and others who work in air transportation earned an average of $75,710 a year.

Trade and logistics in Southern California generates $224.6 billion in economic output annually, sustained by direct spending of $131.9 billion, which includes $43.5 billion in labor income paid to its employees, according to the report. Industry-related expenditures indirectly generate $47.2 billion in spending at supplier businesses in the region, and compensation paid to employees fueled additional spending of $45.6 billion.

But while wages are good, the ports of Los Angeles and Long Beach are increasingly integrating automation in their operations and thats displacing workers. Trade and logistics industries are looking to become more capital-intensive versus labor-intensive through the use of new technologies.

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The Port of Los Angeles has been transforming its TraPac terminal over the last several years by outfitting it with massive robots. Some are tasked with moving shipping containers from ships and stacking them nearby, and others load the stacked containers onto trucks for the next leg of their journey.

We have eight terminals here and one is TraPac, port spokesman Phillip Sanfield said. Its the only automated terminal and it was very expensive. The Port of L.A.s investment in TraPac was more than $400 million. Well get that back and more over the course of their lease, but its very expensive to do this. And it takes years for a company to plan and get the environmental approvals to build an automated terminal.

The Port of Long Beach has also been outfitting its Middle Harbor terminal with automated equipment, which is expected to be operative by 2020.

Self-driving trucks are also being used in warehouses in the form of autonomous forklifts. More recently, the truck transportation and drayage (short-haul) industries are looking at self-driving trucks as ways to reduce costs and boost their profit margins. But thats not going to happen right away.

Regulations have to catch up with the technology, said Shannon Sedgwick, the LAEDC economist who authored the report. That kind of technology wont be widespread until that issue is resolved.

The federal government has yet to establish laws that deal specifically with autonomous vehicles. But several states have opted to enact their own statewide laws. Another major hurdle to widespread adoption is the publics innate fear of seeing self-driving trucks on the road.

Automation is also widespread in warehouse operations. Amazon is known for its orange Kiva robots, which transport shelving and bins to workers who then pick the products. Several new startups are also poised to enter and transform the warehouse robot space. San Jose-based company Fetch Robotics has created industrial robots that simplify warehouse product handling by following pickers to catch their selected items.

Fetch Robotics spokesman Tim Smith explains it this way:

Our robots are almost like moving pallets, he said. They dont necessarily replace jobs, but they can do the worst part of a job.

A Fetch device can autonomously deliver items to wherever they need to go in the building. That eliminates the need for an employee to walk miles and miles throughout the day to deliver the products.

A map of the environment is created when a robot is installed. That takes a few hours and it takes two to three days to get the system up and running, Smith said. We have about 15 customers all over the world. One of our U.S. locations is in Livermore and others are in Asia and Europe.

The LAEDC report also notes that delivery drones are being readied by several companies, including Amazon, Google and UPS to make deliveries to remote areas or areas with heavy traffic congestion more efficient.

But drones without direct supervision of a person are not currently legal in the U.S. Until they are, delivery drones will still require a human component.

Technology isnt the only game changer in the trade and logistics sector. Labor issues, including disruptions and domestic outsourcing, have the potential to negatively affect the Southern California-based industry in terms of growth for trade volumes and wages, the report said.

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Trade, logistics support many of Southern California's good paying jobs but automation is coming - The Pasadena Star-News