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Central PA, a Distribution Hotspot

Central PA, a Distribution Hotspot
June 2015
Category: Industrial

The news of new distribution centers making their way into Central Pennsylvania is not new news. In fact, Central Pennsylvania has been known as a strong area for distribution for quite some time. The question is, why? What makes this area so special and unique that large companies such as Amazon, Federal-Mogul, Target, Nordstrom and others would want to locate their distribution centers here? There are several factors actually, some that may be very obvious, and some that may surprise you.
 
WHAT IS THE KEY FACTOR IN PICKING A SITE FOR A DISTRIBUTION CENTER?
This is probably the most obvious answer - transportation networks. Transportation networks play a huge role in the location of distribution centers, especially in today's day and age of fulfilling the consumer's need of instant gratification. Distribution centers will want to be within a reasonable driving distance to major highways and interstates, rail, airports, and seaports. Strong transportation networks that not only reach the farthest distances, but those that reach large amounts of businesses and population will help to drive down the cost of distributing the product.
 
Most notable, Central Pennsylvania has a strong transportation network. The highway system especially, that is accessible in the area is in-part what makes Central Pennsylvania so attractive for distribution centers. Major roadways such as I-83, I-81, the Pennsylvania Turnpike (I-76), Route 30, Route 15, Route 222, and Route 322 are all connection points that become gateways into some of the north eastern United States's most populated places. In a four hour drive-time from most points in Central Pennsylvania, you can reach areas such as Baltimore, Washington, DC, Richmond, Pittsburgh, Philadelphia, Delaware, New Jersey, and New York. Access to these markets, gains you access to a number of major airports and seaports.
 
WHERE ARE THE "DISTRIBUTION HOTSPOTS" IN CENTRAL PENNSYLVANIA?
If you were asked to look at the map below and guess from which of these 23 points along Central Pennsylvania highways you could reach the most population within a 1 hour drive-time, which would you choose?
 
 

The correct answer isShrewsbury, York County

 
Within a 1 hour drive-time of Shrewsbury, you can reach just under 3.5 million people and 138,000 businesses (that's 83.5% more population than the average for this data set). Shrewsbury ranks so high because within the drive-time, you can reach all of York, Harrisburg, and into Baltimore.
 
 
 
In fact, you could consider the southern portion of I-83 in York County to be a "distribution hotspot" based solely on these findings. The second highest point in terms of total population reached within a 1 hour drive-time is located about 12 miles north in South York at the intersection of I-83 and Route 74 (South Queen Street). Although it's about 400,000 people less than Shrewsbury's drive-time, you are still able to reach over 3 million people within a 1 hour drive-time of this point.
 
HOW DOES SHREWSBURY STACK UP TO OTHER U.S. MARKETS?
As previously discussed, the most notable factor of the Central Pennsylvania market is the roadway connectivity, but also its link to other major markets. Central Pennsylvania is literally sandwiched between Philadelphia, Pittsburgh, and Baltimore with access to markets such as Washington, DC, Virginia, New York, New Jersey, Delaware, etc. Taking these factors into consideration, we wanted to know how strong Shrewsbury is exactly when compared with other markets across the United States.
 
To test this question, we picked 20 markets across the United States for comparison (NOTE: these markets were chosen based off of current distribution activity as well as their location to other major markets):
 
 
 
In this exercise, we took each of these points and applied a 4 hour drive-time (a 4 hour drive-time measures the amount of distance that can be covered in a one day time period - 4 hours to drive to a destination; 4 hours to drive back home) and calculated the total population within each of the drive-times for comparison to the same drive-time around Shrewsbury. Overall out of these markets, Shrewsbury ranked #2 behind Albany, New York. Within a 4 hour drive-time of Shrewsbury, you can reach just under 42 million people (81.1% higher than the average for this data set). Albany only outranks Shrewsbury by less than 500,000 people.  
 
The following map displays the 4 hour drive-time around Shrewsbury, Pennsylvania:
 
 
MARKET AND EMPLOYMENT BASE
Another key-factor for distribution centers is the strength of the current market and the available employment base. Not only does Shrewsbury dominate the Central Pennsylvania markets by the total population and businesses reached within a 1 hour drive-time, but it also leads the others in total Warehouse and Transportation businesses and employees reached within the same area. In the 1 hour drive-time from Shrewsbury, there are 3,059 Warehouse and Transportation businesses (82.2% higher than the average for the data set) and 48,613 Warehouse and Transportation employees (52.6% higher than the average for this set).
 
 
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