Minutes from July 15, 2014 Open Meeting-Logistics panel

Tuesday, July 15, 2014

Open Board of Directors Meeting

San Bernardino Community College District

114 S. Del Rosa Drive

San Bernardino, CA   92408


Present: Deborah Barmack, Carole Beswick, Ann Bryan, Mike Burrows, LaDonna DiCamillo, Bill Easley, Ron Fremont, Ron Griffin, Scott Hofferber, Matthew Isaac, Mark Kaenel, Lowell King, Bill Lemann, Temetry Lindsey, John Magness, John Mirau, John Prentice, Kristine Scott, Paul Shimoff, Steve von Rajcs, Phil Waller, Janet Weder, and Ray Wolfe. 


Guest: Barbara Riordan


Announcements:  1) Loma Linda University Health will roll out their “Vision 2020 Revealed” today Tuesday, July, 15, at 10:00 a.m.   2)  The orientation lunches hosted by John Mirau were enjoyed by all that participated. 


M/S/P:  Minutes from July 8, 2014. 


John Mirau introduced the logistics panel participants: LaDonna DiCamillo, Government Affairs Director for BNSF; John Magness, Vice President of Hillwood Investment Properties and B.J. Patterson, CEO/Founder of Pacific Mountain Logistics and President of PML Freight. 


The panel discussed logistics in the Inland Empire. 
BNSF Railway, a Berkshire Hathaway owned company, serves all major ports on the west coast and the Gulf of Mexico.  They lead the rail industry in technological innovation and have one of the largest computer systems in the world to manage their network operations 24 hours a day.  BNSF employs some 40,000 people (4,000 in Southern California) and operates an average of 1,400 freight trains per day that move ¼ of the nation’s rail freight.  They are the largest intermodal carrier in the U.S. serving 31 facilities. Rail transit is economical for loads of 700 miles or more.  Intermodal transit reduces costs over road trucking and is a key benefit for intercontinental use, as well as reduced greenhouse gas emissions.   BNSF has reduced emissions by 67% from line haul locomotives since agreements with ARB and EPA that began in 1998.  They have increased their reduction of PM by 20% in and around rail yards and have the most up to date/efficient locomotives available.  Much of BNSF employment is entry level and provides on the job training.  They have put in place double tracking from LA to Chicago to accommodate rail volume, but right of way concerns inhibit much of their growth.  Crude oil transportation from fracking in North Dakota has tripled their hauls to Huston in the last few years and has compelled them to purchase new tank cars with improved safety features for such cargo. From environmental, economic, congestion and safety perspective, rail is the best way to move goods. 


Hillwood Investment Properties indicated that in the next ten years the fastest growing segment in our Southern California economy will be the logistics/warehouse industry.  Heavy growth was seen in Ontario in the 80’s and in the 90’s and beyond it is San Bernardino and Redlands.  There is a “land rush” currently in Moreno Valley and Perris, as land is plentiful and inexpensive, however they do not have the dense employee base that is needed to sustain the growth.  Every one million square feet of warehouse space equates to 1,000 jobs (construction and warehouse employees combined).  These jobs are critical to our area, which has over 25% of the population living under the federal poverty level and are attainable as they are predominately entry level with much on-the-job training.  The ports are critical to the Inland Empire’s growth.  Consolidation in the future will create even larger facilities and although a great deal of automation will be experienced, more employees will be needed for programming and repairing equipment.  Hillwood is already seeing a need at new facilities for increased car parking.  Smart planning in the future would be to keep warehouses close to the highways and to use consistent curb heights.  Traffic continues to be an ongoing concern.  Some thought should be given to dedicated truck lanes and truck use of unused capacity on toll lanes/roads.  The logistics industry has expanded over the last decade and significantly enhanced the cities where located, as well as their surrounding areas.


Pacific Mountain Logistics, located in Ontario, CA, is a logistics service provider that offers third party distribution, freight brokerage, intermodal transportation and consulting services.  The ports of LA and Long Beach handle 42% of the imports for the nation and are the most active of the 16 ports major ports in the U.S.  These ports have the advantage of the Southern California infrastructure (highways, airports, railways) that cannot be matched anywhere else.  The ports provide and will continue to provide a stable future in the logistics area here in the Inland Empire.  Logistics are all about the math and companies will leave if other options are more affordable.  California must stay competitive and be cautious of increasing regulations, fees and permitting. 

The jobs in logistics are attractive and individuals without a college education can still find employment and climb the ladder of success in this field.  A majority of facilities prefer to do in-house training and with the increase in automation and robotics good math skills are needed in the work force.  Currently there is an estimated need for more trucks and some 55,000 drivers.  Driver pay rates are still low but the economy has not yet recovered and wages will likely increase in the future.  The industry is currently focusing on military veterans to find experienced drivers to fill the void.  Night gates at the ports have been added and are of great benefit in goods movement.  Much has been done to reduce improve air quality and the Inland Empire is now an “idle free” area. 


A Q & A period followed.

The meeting adjourned at 8:35 a.m.