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LVEDC Discusses ‘The Art of the Deal’ at Transportation Professionals Event

By Colin McEvoy on May 4, 2015

LVEDC CEO and President Don Cunningham speaking at the I-95 Corridor Coalition 2015 Freight Academy Program.

LVEDC CEO and President Don Cunningham speaking at the I-95 Corridor Coalition 2015 Freight Academy Program.

For a second consecutive year, Lehigh Valley Economic Development Corporation (LVEDC) President and CEO Don Cunningham was invited to speak at a prestigious program for public sector transportation professionals.

Cunningham spoke as an instructor at the I-95 Corridor Coalition 2015 Freight Academy Program, an immersion program designed to train public sector agency staff whose planning, operational or management work impact goods movement decisions, investments, and interactions.

Speaking on April 30 at Rutgers University, Cunningham spoke at a session called “The Art of the Deal,” discussing growth in the e-commerce industry and why the Lehigh Valley has proven attractive to several major companies that have established facilities here in recent years.

“Decisions like these are driven by such factors as availability of land, well-established infrastructure and access to markets,” Cunningham said. “These are some of the core economic assets we have in the Lehigh Valley, which is within a day’s drive of about one-third of all consumers in the United States.”

The academy program included such topics as international, national, regional and local freight movements; recent and future freight trends impacting the transportation system; and the role ports play in the freight system. Attendees included DOT officials from such states as Delaware, Florida, Georgia, Maryland, Massachusetts, Nevada, North Carolina and Virginia.

Cunningham outlined some of the major industrial distribution users in the Lehigh Valley, including Walmart (2.4 million square feet) and others with 1 million square feet of space or more, including C&S Wholesale Grocers, Kellogg, Nestle USA and Mack Trucks.

He also discussed recent Lehigh Valley projects like Fuling Plastic USA and zulily, as well as the Fedex Ground megahub planned for 260 acres in Allen Township. The 1.1 million square foot facility, a $335 million project, would employ 800 full-time employees and process 75,000 packages per hour upon full build-out. Construction is expected to begin this summer.

Fuling is China’s largest manufacturer of plastic tableware and kitchenware, supplying plastic utensils and products for such fast food giants as McDonald’s, Burger King, Wendy’s and Subway. It is constructing a $21.3 million facility in Upper Macungie Township, creating 75 new jobs and becoming the first Chinese manufacturing company to establish a facility in the state of Pennsylvania.

A national online retailer, zulily is establishing its first East Coast location on former Bethlehem Steep Corp. land, a $43.6 million project that will result in 1,200 new positions. That will make it the 16th Lehigh Valley business with 1,000 or more employees, and bolsters the Lehigh Valley’s rapidly growing e-commerce business community.

E-commerce means selling products or services online rather than through retail stores. The industry employs more than 20,000 people in the Lehigh Valley, and has added about 6,000 local jobs in the last four years, Cunningham said during his presentation. Globally, e-commerce grew 22 percent over 2013 sales, compared to only 6.8 percent in brick and mortar retail growth.

The Lehigh Valley’s economic assets, including its easy access to highways and proximity to New York and Philadelphia, have proven a perfect fit for the e-commerce market. Cunningham said e-commerce accounted for 5.9 percent of total retail market worldwide in 2014, or $1.3 trillion. By 2018, it is expected to increase to 8.8 percent, or $2.5 trillion.

The I-95 Corridor Coalition developed the Freight Academy with input from Coalition Members as a result of a number of trends that have emerged through their work on freight projects. They include large increases in freight movements; dynamic changes in the goods movement industry; and an increasing need to integrate freight facilities and operations with community goals.

In a column earlier this year, Cunningham wrote about opportunities to expand freight rail access in the Lehigh Valley, including through existing rail services from Norfolk Southern and the intermodal rail terminal in south Bethlehem. Today, 90 percent of goods moving to market through the Lehigh Valley move by truck and 10 percent by rail. The national average is 85-15, truck to rail.

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