Executive Summary COMPARATIVE DISTRIBUTION WAREHOUSING COSTS IN 25 WESTERN AND MIDWEST U.S. CITIES. Location Consultants Princeton, NJ

Transcription

1 Executive Summary COMPARATIVE COSTS IN 25 WESTERN AND MIDWEST U.S. CITIES

2 TABLE OF CONTENTS EXECUTIVE SUMMARY AND NOTES... 2 INTRODUCTION... 2 COMPARATIVE WAREHOUSE LOCATIONS... 2 COMPARATIVE NONEXEMPT LABOR COSTS... 4 COMPARATIVE ELECTRIC POWER COSTS... 4 COMPARATIVE LAND ACQUISITION AND CONSTRUCTION COSTS... 4 COMPARATIVE AD VALOREM AND SALES TAX COSTS... 4 TOTAL ANNUAL OPERATING COST RANKING... 5 ABOUT BOYD

3 EXECUTIVE SUMMARY AND NOTES Introduction In the full Boyd Report, major operating costs scaled to a representative 200- worker distribution warehouse are presented for a series of 25 comparative sites in the Western and Midwestern U.S. Annual operating cost totals are ranked in the Report s summary Exhibit I and range from a high of $21.9 million in Chicago, IL, to a low of $13.7 million in Mesquite, NV. Annual operating costs were projected solely for comparative purposes, with only major geographically-variable factors being considered. Those costs not varying significantly with geography, including relocation and start-up expenses, were not considered. The Boyd analysis focuses on those key geographically-variable cost elements considered to be most pivotal within the warehouse site selection process. Warehouse operating costs are scaled to a hypothetical 500,000 sq. ft. facility employing 200 nonexempt workers and shipping over-the-road to a Western U.S. market. The full Boyd analysis provides an independent and authoritative point of reference for the assessment of comparative operating cost levels in each of the surveyed sites. The format of the cost exhibits will allow a further tailoring of warehouse specifications, shipping patterns and staffing levels to reflect alternate scales of operation and market reach of the hypothetical warehouse facility. Comparative Warehouse Location In the full Boyd Report, major geographically-variable operating costs have been projected for a series of 25 locations. Locations represent current and emerging centers of distribution warehousing activity designed to serve growing consumer and industrial markets in the Western States and California. 2

4 California Region I Bakersfield, CA Freemont, CA Fresno, CA Los Angeles, CA Oakland, CA California Region II Ontario, CA Riverside/San Bernardino, CA San Diego, CA Stockton, CA Tracy, CA Western Region I Phoenix, AZ Tucson, AZ Denver, CO Albuquerque, NM Santa Teresa, NM Western Region II Mesquite, NV North Las Vegas, NV Reno/Sparks, NV Ogden/Clearfield, UT Salt Lake City, UT Central Region Chicago, IL Kansas City, MO Oklahoma City, OK Memphis, TN Dallas, TX Comparative Warehouse Locations Comparative Nonexempt Labor Costs Annual costs for nonexempt labor, including material handling, order filling, clerical, maintenance and selected other warehouse functions, are presented in the full Report s Exhibit II. Costs are based on a representative mix of job descriptions for the model 200-worker distribution warehouse. 3

5 Comparative labor costs for management were not included as these costs would tend not to vary as significantly by geography, but rather by individual company compensation practices. Fringe benefit costs are included as a percent of annual base payroll costs and are assumed to include all statutory benefits, pay for time not worked, and company-sponsored benefits. Comparative Electric Power Costs Comparative annual electric power costs are presented in the full Report s Exhibit III. Annual costs reflect industrial rate schedules of the respective utilities serving each of the surveyed areas. Comparative Land Acquisition and Construction Costs The full Report s Exhibit IV presents comparative costs for the purchase of industrially-zoned land and the construction of new warehousing space in each of the 25 surveyed locations. Comparative Ad Valorem and Sales Tax Costs Exhibit V in the full Boyd Report presents comparative ad valorem (property) tax costs in each of the 25 surveyed sites scaled to the land and building specifications of the model warehouse. Also presented in this exhibit are comparative local and state sales tax costs based on a fixed annual purchase of warehouse supplies, furnishings, equipment and other taxable goods. Comparative Shipping Costs Transportation costs from each of the 25 surveyed warehouse sites to regional market destinations in the West are detailed in the full Report s Exhibit VI. Comparative costs reflect over-the-road shipments in truckload lots. 4

6 Total Annual Operating Cost Ranking Taken from the full Boyd Report s summary Exhibit I is an overall cost ranking of the 25 surveyed distribution warehouse locations. TOTAL ANNUAL GEOGRAPHICALLY-VARIABLE OPERATING COST RANKING Distribution Warehouse Location Total Annual Operating Costs Chicago, IL $21,866,059 Memphis, TN $18,805,882 Kansas City, MO $18,515,913 Dallas, TX $17,625,602 Freemont, CA $17,468,230 Oakland, CA $17,404,749 Stockton, CA $16,738,428 Tracy, CA $16,603,277 Riverside/San Bernardino, CA $16,531,025 Los Angeles, CA $16,495,108 Oklahoma City, OK $16,369,181 Denver, CO $16,332,151 San Diego, CA $16,002,671 Fresno, CA $15,878,405 Ontario, CA $15,804,181 Bakersfield, CA $15,649,898 Reno/Sparks, NV $15,386,363 Tucson, AZ $15,271,659 Phoenix, AZ $15,252,504 Santa Teresa, NM $14,747,421 North Las Vegas, NV $14,600,153 Albuquerque, NM $14,562,655 Salt Lake City, UT $14,364,605 Ogden/Clearfield, UT $14,184,265 Mesquite, NV $13,677,086 5

7 About Boyd Founded in 1975,, provides independent location counsel to leading U.S. and overseas corporations. Devoted exclusively to corporate mobility, Boyd is a recognized authority in the field of comparative business cost analysis. Its proprietary BizCosts data base is developed from five decades of corporate site selection case studies and is considered an authoritative benchmark by corporations worldwide. 6