The Distribution Centers of America, Team DCA, is a nationwide network of ‘regional best’ 3PLs, which together serve every major metropolitan market in the USA. Throughout 2022, we will look at trends, challenges and important happenings in each of the regional geographic (geo) markets served by Team DCA. Following are highlights of logistics in Northern California.
Northern California is a hub of some of the best logistics infrastructure in the United States. Logically, it’s also a center of business and supply chain activity, directly or indirectly employing millions of people throughout California in supply chain management. And Northern California is a more important regional logistics hub than ever.
It’s no secret that the pandemic has had an immense effect on commerce, including in some unexpected ways. There was an incredible e-commerce boom during the COVID pandemic that has wide-ranging implications for logistics and supply chain management. As customers demand more and more e-commerce products, e-commerce companies must adapt, and supply chain logistics will follow suit.
One of the measures these companies must take to deal with the increased demand is to maintain (or secure) greater warehousing space. It makes sense, then, that the number of warehouses in the United States has been rising since 2010, a trend that looks likely to continue. Northern California has benefited greatly from this, making use of its available real estate for third party logistics (3PL) uses.
Companies are looking for local warehousing beyond just the classic core markets. Even previously underutilized regions are seeing growth in infrastructure and warehousing. That’s good news for Northern California.
Vast quantities of materials and goods are manufactured, managed, and delivered in Northern California. When companies need a place to store those goods, there’s no better place than the many warehouses strategically placed throughout the Northern CA region. At a time when many have struggled to find storage space in warehouses, the warehouses in Northern California are capable of accommodating storage needs.
The growth in logistics and distribution opportunities in Northern California is made perfectly clear by the concentration of transportation and logistics jobs in the area. The Stockton-Lodi metropolitan area, for example, has the “second-highest concentration of transportation and logistics jobs in the country.” It’s behind only Laredo, Texas, according to the Bureau of Economic Analysis.
A boom in e-commerce isn’t the only force driving this growth, however. Other factors like the strong transportation infrastructure in the area, the strategic location, and the well-prepared workforce also make Northern California an increasingly attractive hub for logistics and transportation.
A major challenge in the supply chain industry these days (and probably for the foreseeable future) is finding, attracting, and retaining top talent. The community colleges and other educational opportunities available to current and future supply chain workers in Northern California go a long way toward developing a strong workforce of qualified logistics professionals. The supply chain workforce in this area is likely to grow with the industry and support vital logistics operations.
While the ports of Los Angeles and Long Beach are more often on the front page of nationwide media, Northern California’s major Port of Oakland remains consistently in the top 10 most important US ports of entry is for importers into the United States. It’s fair to say that it is now a cornerstone of logistics for California and the US.
The port of Oakland is 1,300 acres with two intermodal rail terminals and three container terminals. From those terminals, the port serves more than half the United States population by rail. Things are only getting busier for the port, too. In 2021, Oakland was the ninth largest port in the United States based on the total cargo handled in TEU. That’s up from the previous two years when it was the tenth largest in the US.
Even more impressively, the Port of Oakland is responsible for loading and discharging over 99 percent of the containerized goods moving through Northern California.
Many companies recognize the varied supply chain advantages of operating through the Oakland port. Perhaps the greatest benefit of going through Oakland in Northern California is the speedier supply chain cycle times. Companies receiving goods over the Port of Oakland, can reach up to 34 million consumers within a 7 hour drive time. That’s a lot of people in a very short period of time.
Given its ideal location in Northern California, the Oakland port allows companies to get their products up to the Pacific Northwest or down to the Los Angeles area in a single day ‘turn time.’
The Oakland port has developed a digital platform for supply chain stakeholders to share incoming shipment information, that is second to none. The platform helps everyone from truckers, ocean carriers, terminal operators, and importers get on the same page about shipments before they arrive.
Warehousing – A Shift to Central Valley
As warehouse capacity has become more and more scarce throughout pandemic times, with consumers continuing to order at record volume, there has been an interesting growth trend in warehousing. Witness the rise of Central Valley capacity dedicated to warehousing in both single client and multi-client formats. As businesses seek storage and handling locations for materials and goods moving over the port of Oakland, the Stockton region is thriving, as innovative 3PLs (such as DCA’s member company for Northern California, PRISM Logistics), invest in capacity there to ensure a flowing chain between manufacturing, storage, and delivery.
One of the fastest growing regions, by far, in terms of warehousing and third party logistics activity in Northern California, is the regional logistics hub of Stockton, CA. Northern California’s Stockton area is receiving growing recognition for its value as a cost-effective geographic location area for growing consumer goods company logistics needs. Especially when compared to the more expensive San Francisco Bay Area, Stockton stands out as a location that presents an attractive supply chain opportunity.
Real estate is comparatively more cost-effective, essential to warehousing service providers and consumer goods product (CPG) companies operating on thin margins — which makes it perfect for many companies’ logistics needs. The Stockton port itself is very small and deals primarily with bulk and break-bulk shipping of items like animal feed, steel, cement, food grade oils, fertilizers, and more, which are not containerized.
Faced with delays and traffic at larger ports, companies were willing to move their products from shipping containers onto bulk carriers to utilize smaller ports like the Port of Stockton. This was is especially relevant during the pandemic.
Port of Stockton Port Director Kirk DeJesus said the Port of Stockton played a key role in alleviating the “traffic jam” problem of container ships stuck as a result of pandemic complications in 2021. He continued, “Some suppliers began changing their shipping methods to bypass the ports in southern California and Oakland at that time. There were non-container ships that were able to come up to our port, unload, and get back out to sea before the container ships waiting offshore were even docked.”
Now, the port is looking to make this change in operations permanent.
In 2020, almost 4 million tons of cargo passed through the Port of Stockton, a number that’s growing almost every year. The port currently works with more than fifty countries and has a variety of goods flowing in both directions.
DCA Member Company: Northern California Warehouse Logistics
In Northern California, the Distribution Centers of America (DCA) is represented by the region’s top third-party logistics provider (3PL), PRISM Logistics.
PRISM operates a network of 2.3 million square feet of warehousing capacity, strategically located throughout Northern California and has marked substantial growth in warehouse capacity in recent years with multiple facilities in the Lathrop / Stockton region, plus long-standing operations in both Sacramento and Hayward, CA. From these facilities, PRISM manages inventory, e-commerce fulfillment and distribution throughout the SF Bay Area, west coast and nationwide. Those are the kinds of partners you want on your team.
If you need a 3PL partner in Northern California, click below for a spotlight profile of the region’s ‘best in market’ DCA member company below.