Transportation costs
 Businesses
in West Virginia are well positioned to reach half the U.S. population overnight.
Transportation costs for a typical facility in West Virginia are estimated to be
below the competing states’ average, representing average annual savings of
$64,301.
Outbound transportation costs are a function of distance to markets, transportation
mode(s) used and rate schedules. Because of the complexity of calculating differential
modal transportation costs by state and because trucking is the dominant transportation
mode for the industry cluster, only motor freight costs were assumed to vary. Outbound
motor freight costs for the respective states were estimated by indexing national
average motor freight costs to the average weighted distance of each state to the
national market.
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Transportation Costs
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U.S.
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Region
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W.Va.
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W.Va. advantage
vs. region
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Chemical
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NAICS 325188: Specialty
organic and inorganic chemicals
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$2,039,154
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$2,225,943
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$2,182,356
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($43,587)
|
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NAICS 3256: Soaps, detergents
and specialty cleaning preparations
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$3,104,512
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$3,423,234
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$3,348,860
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($74,374)
|
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NAICS 3255: Adhesives
and sealants
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$5,221,614
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$5,811,375
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$5,673,753
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($137,622)
|
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NAICS 541690: Technical
services to the chemical industry
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$100,809
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$107,756
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$106,135
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($1,621)
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Average
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$2,616,522
|
$2,892,077
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$2,827,776
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($64,301)
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Source: West Virginia Development
Office Cost Model
Approach:
A comparative analysis of operating costs and profitability was prepared for a national
average specialty chemicals establishment in West Virginia versus the 10 surrounding
states considered the state’s principal competitors: Ohio, Pennsylvania, Maryland,
Virginia, Kentucky, Indiana, Michigan, Tennessee, North Carolina and South Carolina.
The average was based on industry average operating and financial characteristics
derived from the most current Annual Survey of Manufactures, published by the U.S.
Census Bureau; Annual Statement Studies, published by Robert Morris Associates,
and national input/output coefficients for various factor costs. This information
was used to develop a detailed annual operating expense statement that served as
a baseline for estimating costs for West Virginia and the comparison states.
These national baseline costs were adjusted by state-specific cost differentials
for various factors (wage rates, utility rates, etc.) to derive operating costs
for West Virginia and the comparison states.
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