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The Best Places in the United States for Printing Companies to be Located Are...

June 2014
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Professional printing is easily compared with professional baseball. Teams and ballparks, similar to printing plants, are built or acquired most anywhere with little economic rationality and no marketing plan. Sooner than later, the “field of dreams” turns into a nightmare due to “unanticipated negative downturns.” Executive incompetence and facilities mismanagement are never cited, just as the community investment bonds and tax credits are almost never paid back.

It seems we are all in the wrong places, and we can’t blame the Internet, smart tablets or Benjamin Franklin. The cause is our relatives three generations ago. So-called family photo-lithography businesses sprouted up in the “old neighborhoods” of the then booming 1940s Great Lakes and Northeast.

Click on the PDF to the left to view a chart of the 2014 underserved/overserved print markets by demand-to-supply in the United States.

So did the Cleveland Browns, Wilmington Blue Rocks and Lancaster Red Roses. The difference was that when the fans moved away, the teams also walked (or struck out.) Our stubborn families, who exalted the “craft” above commerce, stayed put, increasingly employing relatives and friends who by then couldn’t find real jobs for the same reasons of local economic decline and irrelevance.

The effect is that we grossly over-serve 249 of the nation’s 381 metropolitan areas, while ignoring the remaining extremely underserved 132. The financial consequences are worse than a rained out series. The average pitch to a customer is hurled 354 miles and, when it hopefully connects, flies or “grounds” 757 miles “out of the park” in an opposite direction! Sales costs pop up by 4 percent more than if in a perfect game, which is mounds more than the average PIA Ratios bottom-line score and, for that matter, tolerable dot-gain. There’s another 5 percent in long-haul freight for which we pay, directly or indirectly, with a full-count opportunity cost: Shipping dissuades buyers from future orders unless we care to take the hit in the next inning.

Home Plate-Changes
The U.S. geographical center for print supply (see the green pin in the map in the photo tab to the right) is Blue Island IL, an old industrial area on the south side of Cook County. “It” traveled here mathematically during the past 65 years from Bethel Park, PA, an old industrial area on the south side of Pittsburgh. Both places look and even smell alike as if our industry never migrated. But it did, and once-big printing towns from Bangor to Buffalo, Danbury to Sharon and Secaucus to Medina have shared the irreparable shut-downs.

This “pull” westward, however, did, and continues to, shift supply away from the MVP “most valuable player” metros such as New York and Washington, DC, which are today in the Underserved League. The abandoned printer’s rows are historical curiosities now populated by creative agencies, museums, condo lofts, sidewalk cafes, nightspots and faded signage on buildings with names long forgotten. San Francisco’s Mission District is a prime example, going from printers to brokers to no one there.

The other underserved markets are principally hubs of post-industrial technology, finance, energy and entertainment, notably Seattle-Tacoma, San Jose and Austin.

The center for print demand (blue pin in the map in the photo tab to the right) from where equal proportions of our customers are north, south, east and west, is Columbus OH. That’s the 354-mile trip our statistical salesperson takes from Blue Island IL. Supply is off-course 17°, moving farther away from our customers. By 2019 the demand center will pass through South Vienna (Ohio!).

During this same 65 years, print consumption (the same thing as the U.S. population) migrated at a pace of 10.8 miles per year from Attica, IN, to Perry, OK. That places it (brown pin in the map in photo tab to the right) 757 miles (or 1,218 km) SSW of our collective shipping dock, and on a more alarming heading difference of 21°. If we calibrated our presses so carelessly we’d all go out of business, and so we may if the supply trajectory is not course corrected.

Inside or Outside the Strike Zone

If your business is concentrated, it’s best to be nearer the customers than to their customers. Co-location is the home run strategy here. No traveling back and forth, and no sales offices to set up. The latter are always disasters with issues of taxation, law, rents and personnel.

Going further, co-location of production—digital, offset-analog and converting/distribution—have long been a practice in the “just-in-time” packaging segment where customers like Kelloggs have partner printing/converting plants literally attached to theirs. Other segments of print will follow in this new version of distribute-to-print.

If your business is not concentrated, the double-play is locating in an underserved market that’s close to the U.S. population center. Of the 100 most seriously underserved markets, the most ideal place to locate a physical plant in this decade is along the 200 mile (320 km) Interstate 44 corridor between Springfield, MO, and Tulsa, OK. Tornados love this area, but so does Wal-Mart, O’Reilly Automotive and Tyson Foods, among hundreds of multimillion-dollar print demanders. Best of all there are no Hot Markets Top 1,000 print suppliers there—yet. The Fayetteville-Springdale-Rogers metopolitan standard area (MSA) is the most underserved in the U.S. and the several other MSAs are in the minors with Tulsa ranked #20. A tell-tale sign of all underserved markets is the number of locations, and share of print shipments, of Fed-Ex Office, UPS Stores, Staples and Office Depot. These are notable new competitors who pick up where we don’t. 

Oppositely, in the Overserved League, some 8,282 printing plants, or 27 percent, are located in the declining “rust-belt” metropolitan standard areas where few, if any, will ever make money again. The LVP “least valuable player” is Chicago, where there’s more printing capacity than in Germany. At 2.6 percent of gross metropolitan product (GMP), more than one-third is excess capacity and in a place where the demand base is shrinking by over 2 percent per year! Some companies have been or are moving away, but preposterously to other wrong places, like Wisconsin, where printing is 1.5 percent of the economy and triple what is demanded!

Yes, there are great places for our medium to be if we make our moves before we no longer can. Quoting Doc Moonlight Graham from the period-baseball fantasy Field of Dreams, “Back then I thought, well, there’ll be other days. I didn’t realize that was the only day.” PI

About the Author
Vincent Mallardi, C.M.C., is a preeminent printing industry forecaster and an adjunct professor in international economics. His Hot Markets subscription and database, used for this article, are available to industry professionals and university students. E-mail vince@pbba.org.

 

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