New study details the cost of operating a distribution center
The Boyd Company 2011 Comparative Distribution Warehousing Industry Operating Costs study compares the cost of operations in a 50 U.S. and Canadian cities.
Latest NewsMajor changes in air cargo freighter market driven by e-commerce, reports consultancy Maersk Line’s acquisition of Hamburg Süd gets sales and purchase agreement approval AAR reports mixed carload and intermodal volumes for week ending April 22 BTS reports February gain in U.S.-NAFTA trade U.S. ports may face difficult financing decisions, says Fitch Ratings More News
Latest ResourcePrivate Fleet vs. Dedicated: Which one is right for you? Having the right fleet for your business can give you an advantage over the competition and lower transportation costs.
The Boyd Company, an independent site selection consulting service headquartered in Princeton, N.J., has just released its 2011 Comparative Distribution Warehousing Industry Operating Costs study that compares the cost of operating distribution centers in a series of 50 U.S. and Canadian cities, which all house major or emerging concentrations of warehousing activity.
The analysis provides an independent point of reference for the corporate planner’s assessment of operating costs in each of the surveyed sites. In addition to shipping cost considerations, the report covers other major geographically-variable factors like nonexempt labor costs for warehouse, materials handling, packing, light assembly and administrative support workers; industrially-zoned land costs; new warehouse construction costs; electric power costs; natural gas costs; real estate property taxes; as well as transportation costs.
Warehouse operating costs are scaled to a hypothetical 175,000-square-foot facility employing 75 nonexempt workers and shipping over-the-road to a national U.S.
market. The format of the exhibits in the report can help corporate planners tailor the cost data, warehouse specifications, shipping patterns and staffing levels to reflect alternate scales of operation and market expectations.
The report is designed to help companies stay on top of the shifting trends and choose sites that are most advantageous to their overall operation. “Every project has unique drivers,” John Boyd, Jr., principal at The Boyd Company told Modern, “But this study is a benchmark and a platform for discussion.”
The locations in the study include major U.S. and Canadian distribution gateways such as Boston, Meadowlands/Northern New Jersey, Atlanta, Memphis, Orlando, Dallas/Ft. Worth, Chicago, Kansas City, Riverside/San Bernardino, Toronto and a series of other regional distribution hubs. Among the findings: Annual operating cost totals range from a high of $12.6 million in San Jose/Sunnyvale, Calif., to a low of $7.4 million in Sioux Falls, S.D.
“This study is great news for cash strapped municipalities,” Boyd added. Since one trend is for consolidation, distribution centers are getting larger and paying significant property taxes to the communities in which they are located. In addition, Boyd said, the consolidation trend is turning the tide on outsourcing certain functions overseas. While outsourcing will continue because overseas costs are less for certain jobs like manufacturing, the consolidation trend means that companies are able to offer blue and white collar jobs, as quality jobs and projects wash back ashore.
About the AuthorLorie King Rogers Lorie King Rogers, associate editor, joined Modern in 2009 after working as a freelance writer for the Casebook issue and show daily at tradeshows. A graduate of Emerson College, she has also worked as an editor on Stock Car Racing Magazine.
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
Information Management: Wearables come in for a refit 2017 Air Cargo Roundtable: Positive Outlook Driven by New Demand View More From this Issue