Advantages of Basing Your Distribution Center in North Carolina

North Carolina has long been a strategic hub for distribution and logistics, offering businesses a cost-effective and well-connected location for their supply chain operations. With ongoing infrastructure investments, business-friendly policies, and a robust labor force, North Carolina remains one of the best states for companies looking to establish or expand a distribution center.

North Carolina at a Glance

In 2024, CNBC ranked North Carolina as the No. 2 state for business. The state's consistent top 3 ranking is attributed to several key factors:

• Strong Economy: North Carolina boasts a robust and diverse economy, with significant contributions from sectors such as technology, biotechnology, and finance.
• Workforce Quality: The state is recognized for its highly skilled labor force, supported by renowned educational institutions and comprehensive workforce development programs.
• Infrastructure and Connectivity: With well-developed transportation networks, including major highways, airports, and ports, North Carolina offers excellent connectivity for businesses.
• Cost of Doing Business: Competitive business costs, including favorable tax rates and affordable real estate, make North Carolina an attractive destination for companies.
• Quality of Life: The state provides a high quality of life with a reasonable cost of living, diverse cultural offerings, and abundant recreational opportunities, making it appealing to both employers and employees.

These factors contribute to North Carolina's reputation as a leading state for business, attracting companies seeking a favorable environment for growth and success.

North Carolina industries

Major industries in the state include agriculture, automotive, aviation/aerospace, banking, defense, energy, pharmaceuticals, and textiles.

The state is also ranked #5 in GlobalTrade Magazine’s “Best States for Manufacturing.” Here’s why:

• In terms of output, North Carolina is the second-largest food and beverage manufacturer in the U.S., and the fifth-largest overall
• Total manufacturing output was over $103 billion in 2018
• North Carolina is home to the Southeast’s largest manufacturing workforce (manufacturing workers make up almost 11 percent of the state’s total workforce)
• Exports of goods produced in the state have increased by nearly 35% between 2010 and 2018

Manufacturing operations in the state are supported in no small part by the capabilities of third-party logistics (3PL) providers – specifically, 3PLs within the state that can provide food logistics services, pharmaceutical logistics services, and inbound logistics services. These specialized inbound services include JIT delivery, kitting, packaging, VMI and other services that are essential to keeping manufacturing supply chains in motion.

Key Advantages of North Carolina for Distribution

1. Lower Logistics Costs

A major advantage of North Carolina distribution is the lower cost of doing business in the state. So, whether you will own and operate your logistics operations yourself, or outsource logistics services to a North Carolina 3PL like Kanban Logistics, you will pay significantly less than you would in other East Coast markets.

• Lower industrial space costs: As there is plenty of space for industrial construction and expansion throughout North Carolina, there is less competition for that space and thus lower costs. More rural locations such as in the Eastern part of the state have even lower costs – despite their ideal logistics footprints – than Raleigh and other metropolitan areas.
• Lower labor costs: North Carolina’s labor costs are among the lowest in the country, which helps to further drive down the costs of warehousing and logistics services. The state’s labor pool is also loaded with young talent, especially in the manufacturing and logistics industries.
• Lower transportation costs: The recent addition of rail capacity to the state allows more companies to take advantage of lower-cost rail transportation than ever before.

2. Strategic East Coast Location

North Carolina provides direct access to major consumer markets along the East Coast, making it an ideal location for companies looking to optimize shipping times and reduce transportation costs. The state is within a one-day drive of more than 50% of the U.S. population, allowing businesses to efficiently serve customers in key metropolitan areas such as New York, Atlanta, and Washington, D.C.

3. Expanding Infrastructure and Logistics Connectivity

• Port Access: The Port of Wilmington continues to expand its capabilities, with deeper channels and improved intermodal connections to enhance cargo flow.
• Air Cargo Hubs: North Carolina is home to several key airports, including Charlotte Douglas International Airport, one of the nation’s largest air cargo hubs, and Raleigh-Durham International Airport.
• Highway Network: The state’s extensive interstate system, including I-95, I-85, and I-40, facilitates seamless ground transportation to major U.S. markets

North Carolina offers one of the lowest corporate tax rates in the U.S. at 2.5%, making it an attractive destination for businesses seeking cost savings. The state also provides numerous incentives, including tax credits for job creation and infrastructure investment, helping companies reduce operational costs when setting up distribution centers.

5. Skilled and Available Workforce

With a workforce of over 4.9 million people, North Carolina offers an ample labor pool for logistics and distribution operations. The state has invested heavily in workforce development programs through community colleges and initiatives such as NCWorks, ensuring a steady pipeline of skilled workers for warehouse and supply chain jobs.

6. Thriving Industrial and Logistics Market

Industrial real estate development has surged in North Carolina, with millions of square feet of new warehouse and distribution space being developed annually. The Rocky Mount region is particularly attractive for companies looking to establish distribution centers, offering modern facilities, competitive lease rates, and access to key logistics corridors.

7. Commitment to Sustainability and Innovation

North Carolina is at the forefront of sustainable logistics initiatives, with an increasing number of companies adopting green warehousing practices, such as energy-efficient buildings, solar power integration, and sustainable packaging solutions. The state’s commitment to renewable energy and environmentally friendly business practices can help companies meet ESG (Environmental, Social, and Governance) goals.

North Carolina: A Prime Choice for Logistics and Distribution

Now that you know what makes North Carolina a great distribution hub, partner with a 3PL that can give your operations a proper home in the state. Whether it’s your first DC or your tenth, there are warehousing and distribution service providers that can help you take advantage of all that North Carolina has to offer. Kanban Logistics is one such 3PL and offers over one-million square feet of Eastern North Carolina warehouse space to support the distribution of imports to manufacturers and retailers. To learn more about Kanban’s services for East Coast freight companies, contact us today.