Economic Development News September 2, 2020

How the Charlotte region's transportation sector is finding the road back to growth

Charlotte’s transportation and logistics industry has already seen short-term damage caused by the Covid-19 pandemic. It is likely going to see long-term changes as a result. And, possibly, that could be a good thing.

The industry saw the loss of 7,533 jobs in the second quarter, a decline of about 11%, according to the Charlotte Regional Business Alliance. 

“I think transportation and warehousing is an area that provides a lot of mid-wage jobs, and a lot of consumer spending that comes from that supports a lot of other industries in the economy,” said Chuck McShane, senior vice president of economic research at the Alliance. “It’s a crucial part of the economy, a crucial piece in the economic ripple effects.”

Overall, the region lost about 156,000 jobs in the second quarter as the pandemic stalled the local and national economy, McShane’s analysis shows.

Among the transportation industries hit hardest: airlines and Charlotte Douglas International Airport. Jobs in air transportation across North Carolina declined 26% from March to July, McShane said. 

Many of those jobs are unlikely to return soon as air travel remains sluggish; several airlines are still cutting flights and employees. American Airlines Group Inc. (NASDAQ: AAL), based in Fort Worth, Texas, keeps its second-largest hub at Charlotte Douglas, where it operates some 90% of flights.

American said in July it could furlough more than 1,450 employees in Charlotte this fall. Its regional subsidiary, PSA Airlines, also notified the state last month that nearly 250 workers at CLT could be furloughed in the fall. American Airlines received $5.8 billion through the Coronavirus Aid, Relief and Economic Security Act’s Payroll Support Program. The company and other airlines are looking for further federal intervention.

Mike Walden, an economist and professor at N.C. State University, said the transportation sector was hit hard between March and May but began to see improvements in employment after that, with a 3% increase in jobs in the Charlotte area in June. That momentum will continue, he said, as the economy adjusts to the challenges presented by Covid-19. “I expect there to be more opportunities in this sector as the economy reconfigures in a post-pandemic world.”

One example: Restaurants and supermarkets may eventually need to hire professional transportation firms for their deliveries. 

Other potential future gains? The spike in online shopping caused by widespread economic shutdowns and the general continued growth of e-commerce have already played a significant role in the growth of warehousing and distribution in Charlotte. The region is home to several Amazon.com Inc. (NASDAQ: AMZN) distribution centers with more in the works. Amazon plans to fully occupy the 566,800-square-foot industrial building at WestPark 85 near CLT, for instance, and will lease a 200,533-square-foot building in Concord for a new delivery station.

In June, Ross Stores announced a $68 million, 700-job expansion for its distribution presence in York County. 

The Silverman Group’s Charlotte Intermodal Logistics Center, a 421,00-square-foot industrial building near Charlotte Douglas, has been fully leased for distribution and logistics uses between May and July before its expected delivery in the third quarter.

“I think we’ve seen a lot of continued activity in the industrial warehouse real estate space as that whole supply chain and industry try to realign around e-commerce and that last-mile service,” McShane said.

 


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Collin Huguley  – Staff Writer, Charlotte Business Journal