The rise of online shopping has been a major driver of the logistics industry’s growth in New Jersey over the past decade. With American consumers spending nearly $1.154 trillion online in 2022, up 10.3% year-over-year, the demand for efficient warehousing and distribution has surged. Projections indicate that online shopping will continue to grow, with the number of global online shoppers expected to exceed 2.95 billion by 2027.
Economic Impact
The logistics industry has responded to this increased demand and rising consumer expectations of fast overnight and same day delivery of products to their doorstep. In 2020, the transportation, distribution, and logistics (TDL) sector employed an average of 401,005 workers, accounting for 12.5% of the state’s private sector employment. The annual average wage for TDL workers in New Jersey was $75,244, contributing to 12.7% of private sector wages statewide. The industry’s contribution to the state’s GDP has been substantial, with TDL accounting for $66.9 billion in 2019.
Strategic Location and Infrastructure
New Jersey’s strategic location at the heart of the Northeast Corridor has been a key factor in its logistics industry’s growth. The state is within a one-day drive of 40% of the U.S. population, making it an ideal location for distribution and transportation. The Port of New York and New Jersey, the largest maritime center on the East Coast and the second busiest port in North America, has been a major asset. Additionally, New Jersey boasts the densest rail network in the country and a comprehensive road network, facilitating efficient movement of goods.
Investment and Innovation
Significant investments in infrastructure and technology have further propelled the logistics industry in New Jersey. The state received $13 billion from the Infrastructure Investment and Jobs Act in 2021, which has been instrumental in upgrading transportation infrastructure. Moreover, the New York/New Jersey region attracted $2.6 billion in venture capital investment for transportation technology over the past five years. These investments have spurred innovation, making New Jersey a hub for tech-enabled logistics solutions.
Workforce Development
The growth of the logistics industry in New Jersey has been supported by a dynamic and skilled workforce. The state is home to over 420,000 transportation and logistics workers, with access to a talent pool of 490,000 tech workers. Initiatives like the NJ Pathways to Career Opportunities, launched in 2021, have been crucial in building industry-driven education and training pathways. These programs have equipped individuals with the skills needed for local jobs in warehouse operations, supply chain management, and inventory cycle counting.
Challenges and Future Outlook
Despite its growth, the logistics industry in New Jersey faces challenges. The demand for warehouse space has been strong, but the very same communities demanding overnight delivery fight the construction of distribution centers there, leading to longer drives and increased stress upon delivery workers. Additionally, the industry must navigate issues related to sustainability and environmental impact.
Conclusion
The logistics industry in New Jersey has experienced remarkable growth over the past decade, responding to the ongoing cultural shift towards online shopping. A strategic location, robust infrastructure, and a skilled workforce has helped New Jersey become a regional and national leader. The industry’s economic impact has been significant, contributing to job creation and economic development. As New Jersey continues to invest in infrastructure and innovation, the logistics industry is poised to remain a vital component of the state’s economy, ensuring efficient and seamless operations on a global scale.
Sources
- E-commerce worldwide – statistics & facts – https://capitaloneshopping.com/research/online-shopping-growth-statistics/
- 35 E-Commerce Statistics of 2024 – https://capitaloneshopping.com/research/online-shopping-statistics
- Online Shopping Statistics (2024) – https://www.statista.com/topics/871/online-shopping/
- Online Shopping Trends (2024) – https://www.forbes.com/advisor/business/ecommerce-statistics/
- Online Shopping Growth Statistics (2024) – https://capitaloneshopping.com/research/online-shopping-trends/
- New Jersey’s Transportation Distribution & Logistics – https://www.digitalcommerce360.com/article/us-ecommerce-sales/
- New Jersey’s Guide to the LOGISTICS INDUSTRY – https://www.nber.org/digest/202208/effect-e-commerce-expansion-local-retail
- NEW JERSEY TRANSPORTATION & LOGISTICS – NJEDA – https://www.njeda.gov/wp-content/uploads/2021/12/Transportation-pitch-pack_Update_Feb2022.pdf
- Warehouses growing, but pace may slow, industry says – https://www.njspotlightnews.org/2023/04/demand-for-warehouse-space-still-strong-in-nj-may-slow-in-future/
