The Beacon Group utilizes real load cost data and the 4SYTE ™ Centroid Transportation Modelling tool to meticulously track transportation costs. The analysis focuses exclusively on transportation expenditure, excluding additional supply chain costs like real estate, taxes, and utilities. It's essential to consider all factors, including these overheads, when making well-informed decisions on site selection.
This week, let's delve into full truckload shipping from every Southeastern US state to every other Southeastern state. If your company shipped a full truckload from a SE-based distribution center to all other states within the SE region, which state would result in the lowest cost to serve?
The answer is FLORIDA!! Did you know that the average full truckload cost from Florida to all states is about $1,065.23? Georgia comes in as the second lowest state at $1,175.55, approximately 9.4% higher than Florida. Florida also boasts the lowest average cost per mile in the region at $1.72.
In a surprising twist, Tennessee ranks third to last in average cost per load at $1,723.33 and second to last in cost per mile at $3.03, which is 43.3% higher than Florida! Tennessee, known for its low taxes and strategic location, is becoming a hub for distribution. Memphis offers some of the lowest industrial rent rates in the US, making it an attractive market. Nashville has also emerged as a key distribution center in recent years.
What is causing the low cost per mile out of Florida? It all boils down to the state being a consumer state with limited local production, except for fruit. Trucks leaving Florida are constantly on the lookout for backhaul opportunities, showcasing that in this case, distance doesn't always translate to higher costs.
Arkansas trails the pack with the highest full truckload average cost per load, standing at $1,899.81, surpassing #1 FL by approximately 43.9%. On the other hand, South Carolina takes last place for the highest cost per mile average, reaching a staggering $3.54 per mile. Surprisingly, Louisiana and Arkansas clinch the #2 and #3 spots in cost per mile, however, their position on the western edge of the SE region is leading to a notably high overall cost of serving the SE region. The lower cost per mile fails to compensate for the distance required to service the rest of the SE region.
This scenario challenges traditional logistics analysis and highlights the importance of a data-driven approach in designing distribution networks. Our 4SYTE ™ analyses and AI algorithms reveal unique distribution regions, emphasizing the need to consider various factors like customer locations, inventory carrying costs, supplier and sourcing locations, transit times, taxes, real estate costs and many more factors. Taking a holistic and analytical approach can lead to surprising results and significant savings!
So, here are the results of the SE Region Full Truckload Cost Analysis. Enjoy these stunning results! We will continue on to the mid west region next week.
Comments