The central Washington town of Quincy offers the lowest operating costs for distribution centers in a site-selection consultant’s survey of 29 western U.S. and Canadian locations with intermodal connections to regional markets.
The most expensive sites in the survey were in California and Vancouver, British Columbia, according to The Boyd Company, based in Princeton, N.J.
Boyd’s survey compared costs for a hypothetical 500,000-square-foot distribution center employing 175 workers and shipping to western regional markets. The analysis included cost factors such as labor, real estate, construction, taxes, utilities and shipping.
Annual operating costs among western U.S. cities in the survey ranged from $21.6 million in the northern San FranciscoBay area to $14.1 million in Quincy, in central Washington.
Canadian cities’ costs ranged from $23.6 million in Vancouver, British Columbia, to $18.7 million in Calgary, Alberta. Canadian costs were calculated in U.S. dollars at parity.
All of the 29 locations surveyed have intermodal terminals of at least one of the major railroads serving western North America: BNSF, Union Pacific, Canadian National or Canadian Pacific.
“We’re not recommending that our clients make any investments without intermodal rail facilities,” said John Boyd Jr., principal at the firm that produced the report.
Boyd said intermodal rail helps blunt the impact of rising fuel costs. The company projects over-the-road trucking costs will rise 5.6 percent this year and by a much higher rate in California, where a new low-carbon fuel standard is expected to push diesel retail prices to $6.69 a gallon by 2020.
The report also cited the importance of electricity costs in distribution center site selection. One reason for low costs of DCs in central Washington is inexpensive hydroelectric power.
The Boyd report is available on request at email@example.com.