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.
By Lorie King Rogers, Associate Editor
December 28, 2010 - MMH Editorial

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.

To request a free copy of the 84-page 2011 Comparative Distribution Warehousing Industry Operating Costs study, email .(JavaScript must be enabled to view this email address).



About the Author

image
Lorie King Rogers
Associate Editor

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!

Recent Entries

FTR says both spot rates and contract rates are heading up in a full capacity environment and with the fall shipping season rapidly approaching, it explained conditions for shippers could further deteriorate.

Read how others are using Business Process Management to achieve ERP success with Microsoft Dynamics AX. Download the free white paper now.

Now that Congress has issued another highway funding Band-Aid – a $10.9 billion highway bill through next May that former Transportation Secretary Ray LaHood blasted as “totally inadequate” – what can we expect as the infamously do-nothing 113th Congress winds down in the next month before taking yet another recess to prep for the mid-term elections?

Seasonally-adjusted (SA) for-hire truck tonnage in July headed up 1.3 percent on the heels of a 0.8 percent increase in June. The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 133.3 in July, which outpaced June’s 132.3 by 0.8 percent, and was up 2.8 percent annually.

Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.

About the Author

Bob Heaney is a seasoned professional with over 25 years of distinguished leadership experience in research, analysis, and advisory roles in Supply Chain Engineering. Heaney’s coverage area within Aberdeen includes various elements of Supply Chain Execution (Transportation Management, Warehouse Management, Distributed Order Management and Supply Chain Visibility). Contact Bob Heaney

Comments

Post a comment
Commenting is not available in this channel entry.