Transportation Costs
Well-positioned West Virginia is within half of the U.S. population on overnight
delivery.
Transportation costs for a typical facility in West Virginia are estimated to be
below the competing states’ average, representing average annual savings of
$81,125.
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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Plastic
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NAICS 325211: Plastic
material and resin manufacturing
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$7,148,929
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$7,889,982
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$7,717,056
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($172,925)
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NAICS 325991: Custom
compounding of purchased resins
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$3,265,197
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$3,622,042
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$3,538,772
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($83,270)
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NAICS 562920: Plastic
recycling
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$449,918
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$494,602
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$484,175
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($10,427)
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NAICS 3261: Fabricated
plastic
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$2,120,701
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$2,368,730
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$2,310,852
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($57,878)
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Average
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$3,246,186
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$3,593,839
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$3,512,714
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($81,125)
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Source: West Virginia Development
Office Cost Model
Approach
A comparative analysis of operating costs and profitability was prepared for an
average national plastic establishment in West Virginia versus the 10 surrounding
states considered to be 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, which 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.
To learn about some of West Virginia’s other business costs,
click here
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