Log i s ti c s a n d Distribution in Sampson County
L o g i s ti c s an d Distribution in Sam pson County
Contents
3 EXECUTIVE SUMMARY
12 costs
4 LOCATION: The 360° View
14 sites
8 labor
18 conclusion
Special report prepared in support of the Sampson County Economic Development Commission,
based on a comprehensive analysis by Bruce Facility Planning Consultants, LLC and Leak-Goforth Company
Executive Summary
The movement of finished goods from manufacturer to end-user
involves a vast array of variables and cost factors. Among the most
important are geographic conditions, infrastructural assets, financial
considerations and human resources that enable companies to ship,
receive, inventory and route their product reliably and economically.
As structural and cyclical changes add uncertainty to the domestic
and global business communities, it is nonetheless predictable that
intense competitive pressures will continue to place a heavy onus on
companies to think carefully and creatively when selecting locations
from which to base distribution strategies.
With its mid-Atlantic geography, excellent multi-modal transportation
assets, business-oriented government and workforce renowned for its
diligence and trainability, North Carolina has long welcomed distribution
operations of all sizes. Yet, as the state’s economy and demography
undergo rapid and positive shifts (driven to some degree by larger
national and international trends), communities that may not have
been considered serious contenders only a generation ago are emerging
as viable destinations for distribution operations.
Sampson County, North Carolina—juxtaposed between fast-growing
metro areas to the east, northeast and south—is one community
poised to benefit as companies weigh the advantages and disadvantages of potential destinations for distribution and logistics operations.
In 2009, the County engaged the services of Bruce Facility Planning
Consultants, LLC (BFPC), a Georgia-based business location advisory
firm, to perform a comprehensive appraisal of Sampson County’s
potential as a backdrop for distribution centers and related support
ventures. BFPC partnered with Leak-Goforth Company in conducting
this appraisal. The analysis sought to gauge the complementarity
of the County’s economic assets with the distribution strategies of
today’s industry. BFPC’s study concentrated on Sector 42 of the North
American Industry Classification System (NAICS), mindful of the critical
role of human factors—i.e., ready and qualified workers—in the
decision-making calculus of distribution center location.
Over the course of several months, BFPC made numerous visits to
Sampson County and completed an exhaustive schedule of confidential
interviews with business leaders, plant managers, company HR
representatives and others. The BFPC team viewed industrial properties
that have been set aside for consideration as potential distribution
center sites and reviewed a host of training and business support
programs that could be relevant to the needs of distribution operations.
Consultants thoroughly considered previous studies performed by
County officials that could have relevance in the BFPC study. The final
report of the BFPC team found, in summary, “Sampson County to
be a highly promising location for Distribution Centers and related
businesses, with appropriate preparation and marketing.”
This Special Report highlights key findings of the BFPC analysis and
other data collected by local leadership regarding Sampson County’s
unique suitability as a location for modern distribution centers and
related businesses. Included is a detailed breakdown of four key
competitive assets: location, labor, costs and site availability.
Sampson County is a highly promising
location for Distribution Centers and
related businesses, with appropriate
preparation and marketing.
Bruce Facility Planning Consultants
Summary of 2009 SCEDC Report
executive summary
3
LOCATION: The 360° View
Agricultural activities through the decades have built a web of highways
throughout the County—facilitating the rapid, reliable movement of
farm products to markets both inside and outside the county limits.
As important, the County’s agribusiness interests have been served and
supported by a host of warehousing and transportation vendors. As
agricultural production becomes more technology oriented and efficient,
it has opened up development possibilities for large swaths of flat,
accessible lands that were until recently utilized in farming.
Sampson County, with its 945-square-mile land area, is one of North
Carolina’s largest counties. Its size, terrain, climate and fertile soils
have also made it the state’s most agriculturally diverse and productive.
The most recent (2007) surveys by the U.S. Department of Agriculture
estimated that there are some 1,200 farms in Sampson County, each
producing average annual sales of nearly $1 million. Its huge and
historic agribusiness industry is not inconsequential to the County’s
emerging appeal to distribution businesses.
Sampson County is within a two-day drive of more than 200 million
people and over 70% of the U.S. industrial base.
Within a Two Day Drive
Within a One Day Drive
Albany
Minneapolis
Chicago
Omaha
Detroit
Cleveland
Cincinnati
Boston
New York
Washington D.C.
Louisville
Kansas City
Raleigh
Charlotte
Oklahoma City
Memphis
Clinton
Atlanta
Dallas
Houston
Shreveport
Birmingham
Jacksonville
New Orleans
Tampa
Miami
4
Logistics and Distribution in Sampson County
• In Raleigh-Durham, less than an hour northwest of Sampson County,
arriving residents of all ages are shaping one of the South’s most
innovative and eclectic metro areas. Home to state government,
several colleges and universities, and a host of technology-driven
companies, Raleigh-Durham has a diverse, growing population of
highly educated professionals, with per capita income levels that
sharply exceed state and national averages. In recent years, the
area has gathered numerous high-profile accolades for its economy
and quality-of-life, from publications as diverse as Fast Company,
Men’s Health and Forbes. The U.S. Census Bureau, in fact, recently
ranked Raleigh as the nation’s fastest-growing city.
Richmond
Roanoke
Norfolk
Winston-Salem
40
Greensboro
Raleigh
85
Charlotte
95
21
3m
i.
85
i.
188 mi.
Clinton
Fayetteville
Morehead City
85
77
i.
6m
19
20
Columbia
40
i.
• In Fayetteville, adjacent Sampson County to the east, major
population and business growth is taking shape in and around Fort
Bragg. Already one of the U.S. Army’s largest installations, Fort
Bragg is currently undergoing a major wave of new growth as the
U.S. Army Reserve Command and the U.S. Army Forces Command
begin their headquarters relocation to newly constructed facilities
there. The move, taking place in the wake of the most recent round
of Base Realignment and Closure Commission (BRAC) measures,
involves the net increase of 7,445 military and civilian personnel,
along with more than 16,000 dependents. Complementing the
expansion of Fort Bragg’s mission and headcount are business
creation, expansion and relocation opportunities rising to meet new
defense contracting, purchasing and supply needs.
81
77
m
63
Closer to home, and encompassing 10 million people, Sampson
County’s four-hour radius includes dynamic New South cities of North
Carolina and South Carolina: Greater Charlotte, Columbia, Greensboro/
High Point/Winston-Salem, and the Research Triangle (discussed
below). Nearer by, several of North Carolina’s fastest-growing
metropolitan areas are just minutes away:
Reach 10 Million People
Within a 4-Hour Drive of Clinton, NC
Wilmington
9m
Like North Carolina in general, Sampson County’s economy benefits
from convenient access to East Coast population centers. Trucks
departing from any point in the county are able to reach destinations
from Maine to Miami, Dallas to Detroit­—some 70 percent of the U.S.
industrial base within two days. In nearer proximity—less than one
day’s drive time—are growing business and population centers such
as Washington, DC-Northern Virginia, Atlanta and Jacksonville, FL.
24
Proximity to Consumers
20
26
95
Charleston
A T L A N T I C
O C E A N
• About an hour southeast of Sampson County is Greater Wilmington.
Once North Carolina’s largest city, the Colonial era port community
remains one of its most popular—for businesses of all sizes and
residents at all stages of life. Recent years have witnessed not only
the arrival of global industrial names in manufacturing, bio-pharma
and business services, but also an influx of high-end retirees and
second-home buyers, drawn to the city’s sought-after coastal real
estate and engaging culture. Of the nation’s top 360 metropolitan
areas, Wilmington ranked #26 in terms of population growth,
according to the U.S. Census Bureau. Wilmington also boasts a
container port, making the city “the world’s gateway to North Carolina.”
location: the 360° View
5
Natural and Man-Made Assets
is about 60 miles from the Port of Wilmington, a container-ready port
facility that serves a key commercial and strategic role for North Carolina
and the mid-Atlantic U.S. The complex conducts bulk, breakbulk and
containerized cargo for users inside and outside North Carolina,
connecting businesses to buyers and suppliers in Europe, Asia, Central
America and the Caribbean Basin. Sampson County’s economy is linked
to the Port of Wilmington—as well as other industrial and commercial
assets—via I-40, whose 20-mile corridor through the County offers
access in 15-40 minutes to an I-95 interchange. Other East Coast port
complexes such as Charleston, Morehead City, Norfolk and Savannah
are also within convenient proximity to Sampson County.
Internationally, Sampson County possesses another geographic asset. It
is located in the Eastern Time Zone of the United States, which allows
globally oriented companies operating in the County to share parts
of their standard business day with partners, suppliers, vendors and
corporate counterparts in Central and Western Europe, as well as with
those on the West Coast of the United States.
Sampson County’s location also yields climatic advantages. Modest
winters there rarely yield snow and ice-related road hazards. And,
situated about an hour inland, the County does not suffer the degree of
business disruption resulting from tropical storms and hurricanes seen
by communities nearer the coast.
Sampson County’s economic and social organization is influenced to
a significant extent by its access to several large U.S. military bases.
The most immediate of these, Fort Bragg, lies just 45 miles west of the
Man-made amenities complement Sampson County’s natural geographic
Town of Clinton, the seat of Sampson County government and hub of
assets. Along with I-40, several U.S. highways—including 421 and
its commerce. Seymour Johnson Air Force Base, with its growing head701—facilitate commerce in and across Sampson County. The County
count and inventory of advanced aviation assets,
sit less than 40 miles north. The U.S. Marine Corps
sprawling complex at Camp Lejeune, which is also
undergoing major expansion, is about 72 miles to
the east. Just beyond Lejeune, along the coast,
U.S. Coast Guard Air Station
are Marine Corps Naval Air Stations at New River
85
Elizabeth City
95
13
and Cherry Point.
17
85
64
Raleigh
401
421
795
Seymour Johnson
Air Force Base
Fort Bragg
Sampson
County
95
264
17
Goldsboro
13
401
70
Marine Corps Air Station
Cherry Point
40
Marine Corps Air Station
New River
Jacksonville
421
74
17
74
Defense installations, along with private suppliers
and contractors that support them, comprise an
important regional economic driver, one that is
largely impervious to the cycles of the private
economy. Their presence also assures continued
attention by state and federal policymakers of
abundant multi-modal transportation assets
needed to assure efficient, reliable operation of
the bases through times of war or peace. Trailing
spouses in and around these bases, along with
hundreds of uniformed personnel regularly
“mustering out” or retiring from them, constitute a
unique and enviable source of high-quality workers
into the region’s private economy.
64
Greenville
70
Pope Air Force Base
Fayetteville
Rocky Mount
70
Port of Morehead City
Marine Corps Base
Camp Lejeune
76
Wilmington
76
Military Ocean Terminal
Sunny Point
Port of Wilmington
North Carolina International
Terminal (planned)
A T L A N T I C
O C E A N
17
Exceptional Access. Situated between three of the fastest growing metropolitan areas in the
country, and only minutes from the intersection of two major interstates, Sampson County represents
an excellent opportunity for distribution companies looking to serve businesses and consumers in
North Carolina and the entire eastern half of the United States.
6
Logistics and Distribution in Sampson County
The Port of Wilmington: Ready Partners
for Sampson County Distribution
Distribution operations in Sampson County, as well as businesses in
other industry segments, have a convenient connection to the global
economy via the Port of Wilmington. The port has been a key
commercial amenity in the North Carolina’s economy for several
centuries. In 2009, the complex facilitated the passage of over 1.3
million tons of containerized cargo, more than twice the volume just
five years earlier. Owned and operated since the 1940s by the North
Carolina State Ports Authority, it has in recent years undergone
extensive upgrades, including the deepening of the Cape Fear River
channel to 42-feet. In 2007, the port completed its $33.2 million
installation of four state-of-the-art container cranes. The 100-footgauge cranes can load 18 containers across a ship. The port also
features modern transit facilities, advanced security systems and the
latest cargo management technologies. Operations there have been
unaffected by the union-related disruptions that have plagued West
Coast ports.
The Ports Authority is committed to investing aggressively in container
shipping capacity in southeastern North Carolina as global trade
continues to surge in the coming years. In 2006, the Authority unveiled
a plan for developing the North Carolina International Terminal (NCIT), a
container-only terminal on the west bank of the Cape Fear River only four
miles from the Atlantic Ocean. The plan calls for the $1.6 billion facility
to be constructed on a 600-acre property owned by the State of North
Carolina. The site represents one of few East Coast locations suitable
for development of a new deepwater terminal, according to Authority
sources. In early 2010, the property was undergoing an extensive
environmental impact analysis. Authority officials say NCIT may be
operational as early as 2017.
Ten shipping lines currently operate out of the Port of Wilmington,
which has a total of 6,768 feet of continuous wharf. Only 26 miles from
open sea, the complex offers not just less congestion and faster turnaround times than its larger competitors, but also lower rates and more
flexible customer contracts. Additionally, the North Carolina General
Assembly encourages in-state businesses to utilize the port—offering
tax credits that enable shippers to save up to 50 percent off their total
state tax liability. The credit is earned on cargo wharfage and handling
fees paid to the Ports Authority which exceed the three-year average
for those fees (unused credit may be carried forward for as many as five
years and a total credit of $2 million).
location: the 360° View
7
labor
Interviews conducted by BFPC and Leak-Goforth Company of Sampson
County employers found high levels of overall satisfaction with the
local workforce. Whether due to the global economic slowdown or
more localized factors, employers—e.g., plant managers, business
owners, human resource officers and others—reported in 2009 that
large supplies of qualified workers were available to staff open
positions. Surveys of companies in the County undertaking their own
employee recruitment “in house” found that some 70 percent of those
applying for “industrial job openings” meet the employer’s basic
qualifications. BFPC and Leak-Goforth describe the result as “a very
favorable figure” when viewed in comparison to surveys they have
recently undertaken elsewhere, wherein some communities suffered
a rating as low as 18 percent. Regarding levels of satisfaction by
Sampson County companies with their existing employees, the
consultants found fewer than average complaints regarding “behavioral”
issues among Sampson County workers compared to data gathered in
other national business destinations.
The consulting team “believes that disciplinary problems and personal
behavior shortcomings are less of a problem in Sampson County than
in many other U.S. locations.” They found further that “employers were
firm in their positive assessment of the Sampson County labor market
over the longer term and made it clear that they were pleased without
regard to any temporary improvements related to current economic
conditions.” An overwhelming majority of employers reported being very
pleased with the quality, reliability and trainability of their workers.
Commuting in Context
Labor force analyses have found that Sampson County employers draw
workers from inside the County, as well as from neighboring Bladen,
Cumberland, Duplin, Harnett, Johnston, Pender and Wayne counties.
The region enjoys population and workforce growth that is a positive
indicator of future economic success. U.S. Census Bureau projections
for the eight-county region estimate that its population will near
962,000 residents by 2013. Many are drawn to the region’s affordable
cost of living and pleasant pace. Among its livability assets are close
proximity to Atlantic beaches and recreational waterways inland. The
region’s moderate climate enables outdoor recreation on a year-round
basis. Access to high-quality medical care and educational opportunities
are other key factors behind the region’s rapid population growth.
More important, the number of those engaged in the workforce is also
growing. In March 2009, there were nearly 406,000 participants in the
region’s workforce, an increase of 12.8 percent since 2000.
Excellent surface transportation in the region facilitates the free flow
of workers in and out of Sampson County. Recent upgrades include
Commuting Patterns
From Sampson County
Johnston
Harnett
1
26 53
61
773
2339
Cumberland
70% of applicants in Sampson County were
found to meet employer’s basic qualifications.
A number that reached as low as 18% in
other communities.
Bruce Facility Planning Consultants
Summary of 2009 SCEDC Report
Into Sampson County
200
851
One irony of the post-industrial economic era is that, as machines and
equipment take on tasks formerly delineated to human hands, workforce
skills have nonetheless assumed a greater-than-ever priority. With
modern distribution operations increasingly driven by computers,
specialty software systems and wireless telecommunications devices,
there is little doubt that access to quality, trainable, tech-ready workers
is a key consideration in distribution center location choices.
Sampson
Wayne
9
30 7
43
1042
1322
Duplin
6
48 6
27
Bladen
9
17 7
1
Pender
Sampson County’s daily net outflow of 5,000 workers represents an excellent
opportunity for potential employers seeking an available pool of qualified labor.
8
Logistics and Distribution in Sampson County
the completion of key Interstate extensions in Cumberland and Wayne
counties; efforts are also underway to make NC 24 a four-lane divided
highway, a move that will provide safer, speedier passage across
central Sampson County and between I-40 and I-95.
Wage levels vary widely across these counties due to local economic
and geographic factors, variances which account for the highly porous
flow of workers across county lines: a net total of more than 4,000
Sampson County workers, for instance, commute to jobs in Cumberland
and Harnett counties alone. Overall, a net of approximately 5,000 workers
out-commute from their homes in Sampson County to employment in
a neighboring county, presumably in pursuit of better-suited positions
and healthier wages.
Competing in the National Talent Pool
What of Sampson County’s capacity to provide specialty-class and
management-level professionals needed for modern distribution
operations? Given the County’s rich legacy of agriculture and industrial
manufacturing, consultants from BFPC and Leak-Goforth considered
the question. Professionals and managers are typically recruited from
a national labor market. Thus, the challenge is one of luring top talent
from outside the County.
In face-to-face interviews, HR professionals and other company
officials responded encouragingly on the subject. Though the
predominantly rural county has worked vigorously to boost public
school performance and expand its housing stock, it struggles to
compete with its urban neighbors in regards to popular amenities
such as fine dining, nightlife and high-end retail. But such deficiencies,
interviewees said, are offset by Sampson County’s affordable, relaxed
quality-of-life and the web of uncongested highways that provide easy
access to cities such as Fayetteville, Raleigh and Wilmington, where
such amenities are readily found. “[Sampson County’s] association
with Raleigh, the nation’s fastest-growing metro area, is highly
attractive to candidates being sought from a national job market,” the
consultants reported. The dynamic also works in reverse: it is possible
for amenity-seeking professionals to work in Sampson County while
residing in one of the three adjacent metropolitan communities.
Sampson
Johnston
Wayne
Duplin
Pender
Bladen
Cumberland
Harnett
2000 Census
60,161
162,381
115,654
53,533
41,082
32,278
302,963
91,025
2013 Estimate
67,456
192,878
117,047
56,292
61,501
33,862
309,963
122,888
Growth Number
7,295
30,497
1,393
2,759
20,419
1,584
7,000
31,863
Growth Percentage
12.1%
18.8%
1.2%
5.2%
49.7%
4.9%
2.3%
35.0%
January 2000
27,958
62,727
50,392
22,865
19,444
14,670
119,209
42,271
March 2009
32,688
76,968
52,637
24,632
23,905
15,554
130,558
48,891
Growth Number
4,730
14,241
2,245
1,767
4,461
884
11,349
6,620
Growth Percentage
16.9%
22.7%
4.5%
7.7%
22.9%
6.0%
9.5%
15.7%
Population
Labor Force Growth
Analysis by the Sampson County EDC reveals that four counties—Sampson, Johnston, Wayne and Duplin—comprise the most likely labor draw area for sites at exits
348 and 355 along Interstate 40. Overall population and labor force growth in these counties have exceeded the national average, and demographers suggest this above
average growth will continue.
LABOR
9
Local and Statewide Growth
in Distribution Operations
Significantly, Sampson County is top among North Carolina’s 85 rural
counties in terms of the high percentage of its workforce engaged in
distribution and related employment.
Consultants also focused their workforce analysis more closely—
looking specifically at human factors in the field of “Wholesale Trades”
(NAICS Sector 42). The state as a whole has shown impressive growth
in this sector, adding more than 9,000 jobs and 125 new facilities
during the most recent five-year period. Trends in Sampson County
reflect the state’s overall success. In 2007, Sector 42 accounted for
808 positions across 54 companies in the County. Average annual
compensation in the sector that year was $38,830—a nearly 15
percent cumulative increase over five years.
Another key workforce classification, “Transportation and Warehousing”
(NAICS Sector 48), is worthy of examination. In 2007, 40 Sampson
County businesses employed 200 Sector 48 workers, a 41 percent
increase from 2002 levels. Both Sectors 42 and 48 offer compensation
that exceeds Sampson County’s overall averages.
As wage levels and job opportunities continue to grow in Sectors 42
and 48, skilled labor from both inside and outside Sampson County
can and will easily fill new positions in the distribution industry and
facilitate the success of arriving firms.
Sampson County leads North Carolina’s 85 rural counties in percentage
of workforce engaged in distribution and related employment.
Facility Growth By Industry Sector in Sampson County, NC
Industry
NAICS Code
Number of Companies 2002
Number of Companies 2007
5-Year % Change
Agriculture, Forestry, Fishing and Hunting
11
13
9
-30.77%
Construction
23
131
133
1.53%
Manufacturing
31
53
54
1.89%
Wholesale Trade
42
49
54
10.20%
Retail Trade
44
231
226
-2.16%
Transportation and Warehousing
48
34
40
17.65%
Information
51
12
11
-8.20%
0.00%
Finance and Insurance
52
59
59
Real Estate and Rental and Leasing
53
22
33
50%
Professional, Scientific and Technical Services
54
54
52
-3.70%
Management of Companies, Enterprises
55
2
5
150%
Administrative and Waste Services
56
40
49
22.50%
Educational Services
61
1
3
200%
Health Care and Social Assistance
62
90
116
28.89%
Arts, Entertainment and Recreation
71
11
16
45.45%
Accommodation and Food Services
72
72
81
12.50%
Other Services, Ex. Public Admin.
81
135
141
4.44%
1018
1087
6.78%
Total
Source: US Census Bureau, County Business Patterns
10
Logistics and Distribution in Sampson County
Employment Growth By Industry Sector in Sampson County, NC
Industry
NAICS Code
Number of Employees 2002
Agriculture, Forestry, Fishing and Hunting
11
Construction
23
Manufacturing
31
Wholesale Trade
42
785
808
2.93%
Retail Trade
44
2,550
2,410
-5.49%
Transportation and Warehousing
48
142
200
40.84%
Information
51
*
*
*
Number of Employees 2007
5-Year % Change
139
39
-71.94%
603
774
28.36%
3,428
3,995
16.54%
Finance and Insurance
52
309
258
-16.50%
Real Estate and Rental and Leasing
53
77
106
37.66%
Professional, Scientific and Technical Services
54
212
194
-8.49%
Management of Companies, Enterprises
55
*
*
*
Administrative and Waste Services
56
533
1,135
112.95%
Educational Services
61
*
*
*
Health Care and Social Assistance
62
2,113
2,665
26.12%
Arts, Entertainment and Recreation
71
81
69
-14.81%
Accommodation and Food Services
72
1,061
1,071
0.94%
Other Services, Ex. Public Admin.
81
Total
764
802
4.97%
13,140
15,011
14.24%
Source: US Census Bureau, County Business Patterns
* Insufficient Data
Wage Growth By Industry Sector in Sampson County, NC
Industry
NAICS Code
Average Annual Pay 2002
Average Annual Pay 2007
5-Year % Change
Agriculture, Forestry, Fishing and Hunting
11
20,863
29,641
42..07%
Construction
23
22,511
27,243
21.02%
Manufacturing
31
28,237
30,243
7.11%
Wholesale Trade
42
33,797
38,830
14.89%
Retail Trade
44
16,373
19,665
20.10%
Transportation and Warehousing
48
26,444
28,015
5.94%
Information
51
*
*
*
Finance and Insurance
52
26,155
30,442
16.39%
Real Estate and Rental and Leasing
53
20,052
23,028
14.84%
Professional, Scientific and Technical Services
54
25,476
29,505
15.81%
Management of Companies, Enterprises
55
*
*
*
Administrative and Waste Services
56
24,244
16,847
-30.51%
Educational Services
61
*
*
*
Health Care and Social Assistance
62
26,812
29,244
9.07%
Arts, Entertainment and Recreation
71
13,642
15,348
12.50%
Accommodation and Food Services
72
9,456
10,596
12.05%
Other Services, Ex. Public Admin.
81
Total
Source: US Census Bureau, County Business Patterns
17,537
20,219
15.30%
23,309
27,116
16.33%
* Insufficient Data
labor
11
costs
Sampson County is an economical destination for distribution operations,
offering companies a highly competitive capital and operating cost
environment when measured against national averages.
As the most relevant and accurate means for depicting Sampson
County’s cost competitiveness, BFPC constructed a hypothetical
model of a “Sector 42” facility. Assum ptions are based on a modern
300,000-sq.-ft. distribution and materials handling site sitting on 20
acres. 100 workers staff the complex, known as “Sampson Logistics.”
Personnel
Average cash compensation at Sampson Logistics is $38,830. That
compares to a national average of $54,988. These figures are based
on actual reports filed by employers with the U.S. Department of
Commerce—not estimates or samplings. Annual payroll at Sampson
Logistics totals $3,883,000 versus the $5,498,800 paid out to workers
at a “typical” facility of this nature elsewhere. Sampson Logistics also
enjoys an advantage in non-salary employment costs, paying out
$1,320,200 each year for employee benefits, related taxes, governmentmandated programs and miscellaneous human resource expenses.
The national average for such costs at an identical facility would be
$1,869,600. Thus, Sampson Logistics saves more than $2 million in
total employment costs alone.
Facility
Another area companies will see significant costs savings is in the
acquisition of land and construction of a facility. Based on construction
cost estimates provided by Bruce Facility Planning Consultants, building
a 300,000-sq.-ft. distribution center in the County would likely cost
$21,450,000 (not including land, discussed below). Construction
costs for such a facility, based on the national average derived from
sources including RS Means Building Construction Cost Data, would
total $30,000,000. Sampson Logistics thus benefits from a capital-cost
savings of more than $8.5 million courtesy of the County’s modest
construction costs.
Data gathered by the Sampson County Economic Development
Commission indicate the costs for high-quality, “serviced” industrial
land in the County to be $10,000 per acre. Sampson Logistics might
reasonably expect to pay $200,000 in acquiring its 20-acre industrial
property. Nationally, costs for comparable industrial land averages
approximately $38,000 per acre, setting the price of an identical parcel
elsewhere in the nation at an average of $760,000. Sampson Logistics
therefore pockets a savings of $560,000 in the acquisition of its land.
12
Logistics and Distribution in Sampson County
In combined land and construction costs, Sampson Logistics spends a
total of $21,650,000. The figure compares to $30,760,000 in costs that
would be paid out on average at comparable national locations. The
company’s savings of $9.1 million in start-up facility costs are magnified
when measured as annual expenses amortized across several years,
even with modest interest rate assumptions.
Electric Utilities
BFPC estimates that a 300,000-sq.-ft. distribution center would
consume an average of 10 million kilowatt-hours each year. As of
August 2009, the average rate for electric power for industrial users
in North Carolina is $0.0639 per kilowatt-hour, according to the U.S.
Department of Energy’s Energy Information Administration (EIA).
Sampson Logistics could reasonably expect to incur approximately
$639,000 in power costs each year. In comparison, EIA reported for
August 2009 an average national cost for industrial electricity of
$0.0699 per kilowatt-hour. Competing facilities paying the average
national rate would pay $699,000 in annual power costs. Thus, Sampson
Logistics enjoys a savings of $60,000 per year in utility expenses.
Transportation
Shipping costs are the most geographically dependent of all expenses
incurred by major distribution centers. Such costs are often linked to
logistics patterns that are unique to individual distribution sites and
strategies. Volume and distance to delivery points are obvious key
cost factors, as are modes and frequency of shipment. With its close
proximity to large, growing and diverse consumer population centers
(discussed earlier), it is not unreasonable to suggest that Sampson
Logistics would likely benefit from competitive transportation costs.
Still, the wide array of conceivable assumptions regarding the movement
of goods to possible destinations makes credible calculations difficult.
Thus, BFPC declined to offer cost savings estimates for transportation.
Summary of Cost Competitiveness
In terms of both capital and operating costs, Sampson Logistics enjoys
considerable advantages over an average hypothetical distribution
center elsewhere in the United States. Summing the company’s
wages, employee benefit expenses, annualized land and building
costs, electric utilities and state tax (shown on page 13) yields a cost
estimate of approximately $10.25 million each year. In contrast, an
identical building on 20 acres at an “average cost” destination would
cost closer to $13.9 million annually. Sampson Logistics is therefore
able to operate at a savings of more than $3.6 million annually, or 73.6
percent of the costs faced by its typical competitor.
Annual Capital and Operating Cost Comparisons
Sampson
County
NC Average
US Average
Hinesville/
Liberty County,
GA
Johnson City/
Sullivan &
Washington
Counties, TN
Independent
City of Suffolk,
VA
Summerville/
Dorchester
County, SC
$ 38,830
$ 51,504
$ 54,988
$ 41,705
$ 49,203
$ 53,723
$ 44,294
Benefits
13,202
17,511
18,696
14,180
16,729
18,266
15,060
Total Cost per Employee
52,032
69,015
73,684
55,885
65,932
71,989
59,354
Cost for 100 Employees
5,203,200
6,901,500
7,368,400
5,588,500
6,593,200
7,198,900
5,935,400
Land Cost per Acre
10,000
24,000
38,000
35,000
26,000
40,000
15,000
Cost for 20 Acres
200,000
480,000
760,000
700,000
520,000
800,000
300,000
Construction of 300,000-SF
Distribution Building
21,450,000
22,440,000
30,000,000
23,700,000
23,580,000
25,920,000
24,360,000
Cost of Land and Building
21,650,000
22,920,000
30,760,000
24,400,000
24,100,000
26,720,000
24,660,000
Amortization
3,414,136
3,614,411
4,850,754
3,847,802
3,800,493
4,213,658
3,888,803
Electric
Cost per Kilowatt-Hour
0.0639
0.0639
0.0699
0.0600
0.6410
0.0692
0.0582
Cost for 10 MM KWH
639,000
639,000
699,000
600,000
641,000
692,000
582,000
Tax
State Tax Burden
992,000
992,000
1,000,000
845,000
865,000
791,000
855,000
Total
Based on a 300,000 square foot distribution facility with 100 employees on 20 acres.
Index (US
Average=100%)
73.6%
87.3%
100.0%
78.2%
85.5%
92.7%
80.9%
10,248,336
12,146,911
13,918,154
10,881,302
11,899,693
12,895,558
11,261,203
Facility
Personnel
Average Annual
Direct Pay
Total of
Above Costs
This exhibit illustrates comparative annualized costs for selected capital and operating expenses for a Distribution Center employing 100 staff in a typical structure of 300,000 square feet. It is assumed that the national average cost for
construction of the building is $100/square foot. The exhibit is an initial draft by Bruce Facility Planning Consultants (BEPC) to illustrate certain typical industrial capital and operating costs which vary by location. The choice of other locations
was made by BFPC to provide a reasonable set of comparisons relative to Sampson County. All figures shown above are highly conceptual and preliminary estimates by BFPC and subject to substantial adjustment upon further study. No
warranty is given or implied of their accuracy. This methodology is one of several ways in which locationally variable costs can be expressed. All figures are expressed as an annualized cost to the company owning and operating the
hypothetical distribution facility.
Direct Pay is the employer's cost of direct wages and salaries. Based on average Sector 42 pay cited in US Commerce Department's County Business Patterns series, http://www.census.gov/econ/cbp/ Benefits are estimated at 34% of
base pay, based on surveys by the US Chamber of Commerce and BFPC experience.
Land costs are BFPC estimates of typical commercial asking prices for prepared and serviced industrial land in each location based on a casual scan of websites of economic development agencies, real estate brokerage firms, and
other sources. A site of 20 acres is assumed in each location. Construction Costs are BFPC estimates for the basic structure of a typical distribution building in each location, extrapolated from sources including RS Means Building
Construction Cost Data. A size of 300,000 square feet is assumed for which a national average cost of $100/square foot is assumed. Local costs are adjusted based on that figure.
Amortization is a way of expressing building and land costs on an annualized basis similar to those of staffing, energy, etc. The figures represent the total cost in each location amortized over 8 years at an interest rate of 6%.
Electric energy is based on consumption of 10 million kilowatt-hours per year under typical industrial conditions. Figures are based on state average costs per kilowatt-hour from the US Energy Information Administration,
http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html
State Tax Burdens are BFPC estimates based on the assumption of a national average cost of $1 million, adjusted for each state. Bases for the estimates include the "2010 State Business Tax Climate Index" by the Tax Foundation,
http://www.taxfoundation.org/files/bp59.pdf
costs
13
sites
Recognizing the potential of the distribution and logistics sector in
the County’s overall vision for job creation and industrial investment,
Sampson County leaders have identified specific sites that underscore
the geographic, labor and cost advantages discussed previously. More
than 2,100 acres sit available at exits 348 and 355 of Interstate 40
positioning future distribution centers within one hour of the rapidly
growing Raleigh-Durham market to the northwest, and one hour to
the deepwater port facilities in Wilmington to the south. In addition to
offering critical interstate access to expedite product disbursement,
these sites sit near several US Highways and state roads to entice
future employees with an easy commute.
Some standard due diligence and site planning has already occurred on
both sites and more work is scheduled to ensure rapid development for
new and expanding businesses. Forestry and Agriculture are the only
former uses of these greenfield sites.
Industrial Park Locations—Exits 348 and 355
95
40
Exit 348 Site
50
13
421
701
Exit 348
Totaling just less than 1,000 acres, the sites at exit 348 are just 20
miles from the Interstate 40 and Interstate 95 interchange. Initial
investigation shows that these sites contain very little wetland areas
and can be configured to accommodate distribution facilities of all
sizes. Situated between an Interstate (I-40) and a US Highway (US
701) companies that choose to locate here will enjoy easy access to
the region.
403
Clinton
24
Room to grow. Over 2,100 acres sit available at exits 348 and 355 along the I-40
corridor in northeastern Sampson County.
Exit 355
Arguably some of the best distribution sites in North Carolina sit in
Sampson County at exit 355. Sites here combine to create more than
1,100 available acres and can be configured in any number of ways to
support even the very largest distribution centers. If visibility is important
to your business, these sites offer opportunities to have signage directly
on Interstate 40. Just 27 miles to the I-40 / I-95 interchange, your
customers—no matter where they are—will be within easy reach.
Sites at exits 348 and 355 along I-40 are an hour from the Raleigh-Durham
International Airport to the northwest, and an hour from the deepwater port
of Wilmington to the south.
14
Logistics and Distribution in Sampson County
Exit 355 Site
I-40 Exit 348 Industrial Park Site
TO
IG
LE
RA
H
Exit 348
40
TO
B
H
I
N
O
R
S
GT
ON
COMMERCIAL
OUT-PARCEL
D
C
ILM
IN
E
A
W
J
K
P
L
M
Q
T
701
Industrial Park Acreage Information*
A
B
C
D
E
50 AC Upland, 10 AC Wetland
54 AC Upland, 6 AC Wetland
45 AC Upland, 3 AC Wetland
67 AC Upland, 3 AC Wetland
60 AC Upland, 0.1 Wetland
*All Acreage is Approximate.
H
I
J
K
L
13 AC Upland
13 AC Upland
13 AC Upland
12 AC Upland
13 AC Upland
M
N
O
P
Q
92 AC Upland, 18 AC Wetland
18 AC Upland
26 AC Upland
31 AC Upland, 11 AC Wetland
84 AC Upland, 2 AC Wetland
R 113 AC Upland, 10 AC Wetland
S 123 AC Upland
T 93 AC Upland, 9 AC Upland
All Site plans prepared by Thomas & Hutton Engineering Co.
sites
15
I-40 Exit 355 Industrial Park Site
TO
H
IG
LE
RA
1779
O
40
N
P
FIBROWATT
OUT-PARCEL
R
M
CO
X
IA
C
ER
M
L
M
S
V
L
A
U
B
J
C
BB
I
D
ING
ILM
G
403
TO W
F
AA
Exit 355
H
E
Z
W
CE
AR
-P
UT
LO
K
Y
Q
TON
403
Industrial Park Acreage Information*
A
B
C
D
E
F
G
16
59 AC Upland, 7 AC Wetland
54 AC Upland
44 AC Upland
38 AC Upland
28 AC Upland
11 AC Upland
35 AC Upland, 7 AC Wetland
H
I
J
K
L
M
N
*All Acreage is Approximate.
17 AC Upland, 3 AC Wetland
17 AC Upland, 18 AC Wetland
16 AC Upland, 10 AC Wetland
100 AC Upland, 18 AC Wetland
100 AC Upland, 2 AC Wetland
34 AC Upland, 6 AC Wetland
44 AC Upland, 12 AC Wetland
Logistics and Distribution in Sampson County
O
P
Q
R
S
U
V
73 AC Upland, 10 AC Wetland
20 AC Upland, 1 AC Wetland
8 AC Upland, 5 AC Wetland
34 AC Upland, 10 AC Wetland
29 AC Upland, 4 AC Wetland
14 AC Upland
11 AC Upland, 7 AC Wetland
W
X
Y
Z
AA
BB
9 AC Upland, 2 AC Wetland
10 AC Upland, 6 AC Wetland
82 AC Upland
61 AC Upland
53 AC Upland
12 AC Upland
Exit 355 Conceptual Master Plan A
Pond
Fibrowatt Out-Parcel
Wetlands
1779
TO
st Pr
r
1,2 ib u o p o
00 tio se d
,00 n C
0 S en
.F. ter
H
IG
LE
RA
Di
40
Concept A: Combining several parcels at
the northeast corner of I-40 and US 117
creates a site large enough to accommodate a massive 1.2 million square foot
distribution center. The position of the
building on this site is intended to provide
a company with maximum visibility for
signage on I-40.
Exit 355
403
403
Exit 355 Conceptual Master Plan B
Pond
Fibrowatt Out-Parcel
Wetlands
1779
TO
LE
RA
Concept B: Using the same combination
of sites as Concept A, this option shows
how a 1.2 million square foot distribution
facility would work if a more square-like
configuration was preferred. This footprint
might be more conducive to an operation
wishing to combine manufacturing or
assembly with their distribution operations.
IG
H
er
ed nt
os n Ce .F.
p
o
Pr utio 00 S
rib 00,0
t
s
Di 1,2
40
re
tu
Fu
nt
me
p
elo
v
De
Exit 355
403
403
Sites
17
conclusion
Unique geographic assets, modest business costs and strong local
leadership have come together to shape Sampson County into a highly
competitive destination for today’s distribution and logistics operations.
Ingrained in these advantages—which include convenient proximity
to several container ports and large, growing consumer markets—is
the flexibility that enables the County’s industrial residents to navigate
the fast-shifting currents that propel today’s global economy. The
County’s fluid, trainable workforce, access to redundant, multi-modal
transportation systems, proximity to a diverse array of consumers and
recession-protected military buyers help reduce the risks common to
modern distribution operations and strategies.
Affordability is central to Sampson County’s potential to grow its
distribution and logistics sector. Thorough analyses performed by
outside consultants found that land, labor, construction and utility
costs as they related to distribution operations are significantly lower
than national averages calculated by independent research sources.
Unique geography accounts for other elements of the County’s cost
competitiveness: convenient global access to arriving product and
close proximity to consumers and institutional buyers aide distribution
operations in constraining transportation costs. Moreover, businessoriented local and state government leaders are proactive in providing
value-added services and support to arriving and expanding industries,
including free, customized workforce training and technology-transfer
programs by university-based specialists.
Eager to embrace sustainable job growth opportunities and diversify
its local economy, economic development officials in Sampson County
secured outside assistance from two highly regarded national experts:
Bruce Facility Planning Consultants in Norcross, Ga., and the LeakGoforth Company of Jacksonville, Fla., and Raleigh, N.C. Through
several visits to the County, confidential interviews with its business
and community leaders, and exhaustive research and data-gathering,
the consultants have woven together a credible, viable vision for how
the County can harness the full potential of its distribution and
logistics sector.
Additional details on the consultants’ findings are available from the
Sampson County Economic Development Commission, which invites
inquiries from distribution, logistics and related enterprises via email
([email protected]) or telephone (910-592-8921). A full
complement of information about Sampson County’s economy, workforce, geography and business environment also can be found online
at www.sampsonedc.com.
18
Logistics and Distribution in Sampson County
(910) 592-8921 www.sampsonedc.com