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August 7, 2012

Metropolitan Chicago’s Freight Cluster Part 3, Workforce

Note:This is the third in a three-part Policy Updates series onMetropolitan Chicago's Freight Cluster: A Drill-Down Report on Infrastructure, Innovation, and Workforce:

Metropolitan Chicago's Freight Cluster Part 1, Infrastructure

Metropolitan Chicago's Freight Cluser Part 2, Innovation

Metropolitan Chicago's Freight Cluster Part 3, Workforce

In 2011 the freight cluster employed over 200,000 people, approximately four percent of the metropolitan Chicago's workers. Rail and trucking carriers and the industries that support the cluster, like distribution and logistics, wholesale trade, and transportation equipment manufacturers, have long been a cornerstone of the region's economy. Northeastern Illinois is home to workers that have developed some of the most innovative freight technologies in the world, technologies that have done nothing short of change the way and speed good move around the globe. An adaptable and skilled workforce will be necessary for the region's freight cluster to continue to grow and thrive. Yet while the demand for freight is growing and overall unemployment remains high, employers within the cluster are struggling to find and retain qualified employees.

Metropolitan Chicago's Freight Cluster: A Drill-Down Report on Infrastructure, Innovation, and Workforce,recently released by CMAP, analyzes major issues affecting the regional freight cluster in the 21stCentury. This Policy Updateis the third in a series discussing major findings of the report in infrastructure, innovation and workforce. The infrastructureupdate examined the challenges in the region and concluded with implementation action areas to address system coordination, innovative financing, and coordinated land use. The innovationpost looked at the role of innovation in the freight cluster and concluded with implementation action areas aiming to harness the innovative potential of regional firms that will best position the cluster for sustained growth. This final post in the series considers the cluster's workforce needs and opportunities for addressing workforce challenges.

In the past decade, employment in the freight cluster grew faster than the overall regional economy. The figure below indicates that during the recession the freight cluster experienced employment losses similar to the overall regional economy. However, since 2009, freight's recovery has been much more steady and strong. The cluster's employment has had a net increase of more (7 percent) than the overall economy (less than 1 percent).

As the cluster grows and evolves, some acute needs are emerging. To fill growing demand for freight, employers are opening and creating positions. However, despite high unemployment, freight cluster employers interviewed for CMAP's analysis reported difficulties finding and retaining employees for jobs that require only a high school diploma due to lack of English proficiency, punctuality, and the inability to remain drug-free and follow instructions and rules. On its face, this is a tremendous challenge for the cluster. Yet this is also an opportunity for the cluster to form strong linkages with successful job-readiness training providers to connect low-skilled job seekers with careers where they can grow. Because of some of the specialized technologies in freight and the importance of developing institutional knowledge, many industries in the freight cluster, like rail or couriers, provide ongoing and rigorous training for their employees to acquire news skills and to advance in their respective firms.

Industries in the cluster can and are partnering with existing institutions in the region like community colleges and job-readiness programs to better-prepare entry-level employees. The City Colleges of Chicago's Transportation, Distribution, and Logistics Centerat Olive-Harvey College is an example of such a partnership. Private freight firms, such as American Airlines, CN Railway, and Coyote Logistics, partnered with the Center in developing programs to prepare workers for a variety of freight occupations. The drill-down report's findings on innovation demonstrate that freight technology is advancing rapidly and that these kinds of public private-partnerships help tap the knowledge of the private sector to ensure that training is relevant and best-preparing people to successfully enter the workforce.

Along with improvements to the region's infrastructure, the freight cluster's ability to innovate is critical to the health and success of the cluster. Cluster firms will require more employees that can develop new innovations and apply the rapidly changing technologies in the field. The cluster will have to attract and cultivate a high-skilled workforce to develop new technologies. Again, there is room for the private sector to collaborate with the public sector, in particular through K-12 education and universities. The private sector can share on-the-ground knowledge about innovations and the competencies needed in science, mathematics, engineering, and technology to further transform freight technologies and processes.

The freight cluster's workforce challenges are not unique to the region. For instance, the nation's rail carriers expect large segments of their graying workforce to retire in a relatively short period of time. These retirements will come at a time when the rail demand is on the rise. Since metropolitan Chicago is the nation's rail capitol, retirements in the rail industry will result in many well-paying openings for workers in the region willing and able to commit to a demanding job. Several other industries, like trucking and warehousing, present similarly unique opportunities and challenges for employment. In addition to CMAP's drill-down report, a recent in-depthoccupational analysislead by the Chicago Workforce Investment Council, a CMAP partner, profiles the cluster's major occupations.

The freight cluster is sizable and presents many policy challenges for the region. More robust information on the cluster could provide critical insight for industry leaders and policy makers alike on how to better support the cluster. For instance, data on education outcomes, employment growth, and related training can help education providers, economic development organizations, and industry plan strategically to help meet the cluster's workforce needs. Later this year, CMAP will release MetroPulse Jobs, an on-line portal to support workforce development planning. At its launch, the portal will feature freight cluster industry, employment, and training data. In the future, the portal will add data related to upcoming cluster drill-downs on advanced manufacturing and biotech/biomed.

CMAP's freight cluster report concludes with for workforce implementation action areas, emphasizing the need for public-private partnerships to upgrade the freight workforce's skills to keep pace with growth and innovation in the cluster. The four action areas call for:

  • Fostering public-private collaborations for education and workforce trainingto reduce the skills mismatch that has emerged as innovations change workforce needs.
  • Addressing "soft-skills" training needsto prepare low-skilled workers and under-employed adults for jobs in the freight cluster.
  • Retraining the workforceto upgrade freight workers' skills.
  • Using and refining data systems that inform freight workforce support.

For more on infrastructure and the region's freight cluster, as well as opportunities moving forward for coordinated action, check out CMAP's freight cluster reportand companion technical document.