Perspective on Real Estate

April 24, 2003

April 30, 2003

May 7, 2003

Without planning, logistics brings crisis

Logistics is the science of supplying armies with all they need for sustainability. The world of real estate also needs to learn about logistics: the science of marketing and distributing goods and commodities on a global scale. The first courses are appearing at community colleges and trade schools in an attempt to elevate workers into this field.

As I have personally researched and analyzed this sector for the past eight years, I have especially studied the new Alameda Transportation Corridor, which connects the L.A./Long Beach ports with downtown Los Angeles, as logistical connectivity eventually spreads eastward through the Inland Empire and much further east.

The purpose is to service the gigantic needs of Wal-Mart to the just-in-time necessities of the local merchants. This is the highest manifestation of the true meaning of globalization.

China is an important example. In my younger, professional days I did 3 1/2 years of research on Communist China for the founder of the Bank of China, whom I was retained to tutor -- a highlight of my younger, smarter days. Since those years when Henry Luce, the publisher of Time, Life and Fortune, would not allow any positive news to be published about this adolescent giant, and the antagonism of the Korean War bloodied the potential between China and the United States, China has assumed the proportions of an economic empire worthy of being called a major competitor.

China's economy grew by an impressive 9.9 percent the first quarter of this year -- its fastest growth in six years, although 2003's rate may eventually be inhibited by the SARS contagion. This year is following 2002's huge 8 percent growth and 2001's excellent 7.3 percent expansion.

I use China as an illustration of my theme on logistics, for change is both a curse and a blessing to those who take note of it, change or freeze their ways, or improve or ignore their organizations and businesses. Improvement should be especially sought when you are most successful, most complacent and when arrogance corrupts your vision.

As this jobless "recovery" contends for our attention, global change evolves locally. The Inland Empire has the greatest possibilities concerning logistical change, for it has more of a healthy growth attitude that appears to be not intimidated by the selfishness of the NIMBY.

However there is also an evolving revolt building against long commutes and the traffic generated by trade. Trucks are growing as large as steamships, though they can weave and turn and crush much faster. As my son and I, along with my team from my Horizon Strategic Fund, drive from Long Beach to the Inland Empire, we note the traffic problems and conclude that it is already at crisis intensity. Crisis is the ultimate "squeaky wheel", usually attracting the attention and "grease" of politicians.

In the case of the purveyors of logistics, such as railroads, truckers, cargo carrying ships and air cargo, until there is ingenuity to solve the traffic problem, there are a growing cadre of cities that will be crying, "Enough! No more warehouses for they are the nourishment of this contagion."

This is no weak movement. The cities of the Alameda Corridor are very short on land anyway, and more warehousing will require the redevelopment of existing structures, as well as revitalized "brown fields".

As we get into the Inland Empire, formed by Riverside and San Bernardino counties, we will encounter more antigrowth than ever before. Much of this will be catalyzed by the battle between trucks and cars and it will inhibit the spread of logistical support until common sense and excellent planning occur -- easier written than done.

Goodkin has been a business ethicist and housing analyst since 1956. He may be reached at

April 24, 2003

April 30, 2003

May 7, 2003