Where Should I Locate My East Coast DC?

Finding an efficient and cost-effective location for a distribution center (DC) or fulfillment center is an extremely important decision. In the Eastern U.S., there are many different options available for an East Coast DC—including centralized distribution from Eastern North Carolina, which is exactly halfway between Miami and Boston.

Some of the questions you’ll want to answer during the selection process include:

• Where do we want to physically locate our inventory?
• How far (via truck, rail, etc.) is this inventory going to be from our customers?
• What main transportation hubs and highways are nearby to make freight transportation faster and cheaper.
• How will labor and real estate costs impact our bottom line? (Space and labor costs may be more expensive near major hubs versus more remote locations)
• What local or state regulations will impact my selection of an East Coast DC and how will they impact my business?

In Site Selection Decisions: A Matter of Data, Inbound Logistics’ Perry A. Trunick points out that, while the supply chain itself may be global, regional factors such as population density and facility costs determine where and how businesses store and distribute inventory.

“Manufacturing consumes considerable resources, including raw materials, energy, and labor,” he writes. “As a result, companies locate manufacturing and fabrication operations near those resources.”

The distribution side of the supply chain, on the other hand, is driven by the location of high-value customers, not low-cost manufacturers.

Most Distribution Center Development is in Population-Dense Markets

According to CBRE’s Transportation Cost Equivalence Line: East Coast vs. West Coast Ports, choosing the location of its regional distribution centers is one of the key decisions a business will make. Demographics will continue to be the most important factor in this choice, as they have been for many years, CBRE reports.

“As the goal of the global supply chain is to deliver products to customers quickly and efficiently, population-dense markets will dominate industrial real estate activity in the coming years,” according to the commercial real estate firm. “Expansion within highly populated areas will afford companies greater flexibility and diversity in their supply chains.”

For Your East Coast DC: North Carolina Offers Compelling Advantages

If your company is seeking an East Coast warehouse, cost is obviously a major consideration. And cost, as it relates to warehousing, comes down to two things: land and people. Where land is less expensive, the cost to build or lease warehousing and distribution space will be, as well. Wage rates for warehouse labor tend to be lower outside of major cities or port locations.

Here are some of the key advantages of distributing from Eastern North Carolina:

• Lower labor costs. Rocky Mount, NC region has one of the lowest wage rates in the Mid-Atlantic region for warehouse workers, compared to markets like Hampton Roads, Raleigh-Durham, Atlanta, Charlotte, and Greenville, SC.
• Lower space costs. Average net rental rates in the Rocky Mount/Tarboro NC area are less than those reported by Cushman & Wakefield in 2015 for the same markets noted above.
• Access value-added services. Kanban’s distribution centers are temperature-controlled, rail-sided, and include North Carolina FTZ capabilities.
• Reach every major East Coast market via ground in one day. Kanban’s five-DC campus is located minutes from interstate 95.

Kanban’s logistics campus in Eastern North Carolina combines a centralized Eastern U.S. location with a low cost structure to make it an ideal location for your East Coast DC. Contact us today to learn more.