Fast growth continues in Southeast

For 10 years, Florida has demonstrated a knack for attracting people, according to the Atlas Van Lines Migration Patterns (www.atlasworldgroup.com) study. The annual survey of moves handled by the van lines indicates a higher number of inbound moves than outbound moves for the state of Florida over the past decade. Neighboring Georgia exhibits a similar pattern in each of the last 10 years except 2002. A similar Allied Van Lines (www.allied.com) report also shows Florida was the largest gaining state in 2004, the latest year for which full numbers are available.

Trade has also picked up, and the region of south Florida saw double-digit trade growth in 2005, according to Ken Roberts, CEO of WorldCity (www.worldcityweb.com), which tracks trade and economic figures for the region. South Florida held onto its position as the 13th largest U.S. Customs district, says Roberts, accounting for nearly 2.6% of all U.S. trade. It was one of only three Customs districts with a trade surplus, he adds.

The Southeast region fared well in our own Site Selector, a logistics study conducted by Expansion Management and Logistics Today, garnering 16 of the slots in the Top 50 Most Logistics-Friendly Cities in the U.S. The region's top two logistics sites were both in Florida — Jacksonville and Miami.

The Site Selector ranks the 362 standard metropolitan statistical areas (SMSAs) on ten critical logistics measures, each comprised of a number of data points. Miami ranks in the top five across the U.S. for transportation and distribution industry resources. It also ranks in the top five on logistics workforce. Its other top-five ranking is for air capacity.

Within the region, Miami and nearby Fort Lauderdale often view themselves as competitors for business development, but the U.S. Census Bureau places the two cities in the same standard metropolitan statistical area. In fact, many of the logistics measures would apply equally to the two. Road infrastructure (17) and road condition (24) rank high on the national scale. But on the statewide ranking of taxes and fees, Miami and Jacksonville — a more likely competitor for a logistics site — fall in the bottom third nationally. Here, Georgia's Atlanta and Savannah benefit from the top ranking for low fees and taxes that apply to logistics.

The Florida cities of Miami, Jacksonville and Tampa also suffer from heavy road congestion. Tampa holds the distinction of being the most congested city in the nation, coming in dead last at 362. Miami is close behind at 355 and\ Jacksonville is at 283. In fact, the Southeast region does rather poorly in the ranking of density, congestion and safety ranking, with 32 SMSAs appearing below the 300 mark. Florida has the dubious honor of holding 12 of those slots. Traffic is a problem Miami shares with Atlanta, which is ranked 341 in the category.

In its cost analysis of the Top 50 Most Logistics-Friendly Cities, The Boyd Company (www.theboydcompany.com) provides separate numbers for Miami and Ft. Lauderdale. The Boyd analysis shows a slight difference between the two cities. In its 2005 report, you could expect to pay 2.8% more to own and operate a distribution center in Miami than in Ft. Lauderdale. The gap narrowed slightly in 2006 to 1.9%.

Leasing was a cheaper option in both cities. The cost of a leased distribution center in Miami was a narrow 1.4% higher than Ft. Lauderdale in 2005. That gap shifted in favor of Miami in 2006, giving it a 0.4% advantage over Ft. Lauderdale.

The Boyd BizCosts analysis measures costs in a number of critical areas for each of the Top 50 Cities based on some key assumptions. One is that it assumes a workforce of 150 non-exempt workers. The model also assumes operational costs for a 350,000 square-foot warehouse. In addition to labor, land acquisition (or lease costs), power and utility costs and taxes and fees, the model includes comparative shipping costs.

The shipping costs model truckload shipments from a single warehouse in the subject city to a target market covering the top 10 consumer markets across the country.

A quick look at the BizCosts figures for the six Florida and Georgia cities of Atlanta, Ft. Lauderdale, Jacksonville, Miami, Savannah and Tampa highlights some key differentiators for logistics site decisions.

Leased facilities will cost the most in Miami and Ft. Lauderdale. The southern-Florida cities are just over two times more expensive than low-priced Savannah on the price per square foot for leased warehouse space. Construction costs are 70% higher in Miami than for the same facility in Savannah.

Labor costs show only a $1.04-perhour spread between the lowest price market and the highest when the 150 hourly employee wages used in the Biz-Costs model are averaged. Jacksonville has the lowest labor rate, while a 64-cent gap widens between Miami and the highest priced labor market, Ft. Lauderdale. This allows Atlanta to slip into the fifth slot on labor cost, between Miami and Ft. Lauderdale.

On the operating side of the coin, Savannah has the highest costs for utilities consumed by the model 350,000-squarefoot warehouse in the BizCosts model. The same facility in Jacksonville operates for an estimated $250,000 per year less.

What Savannah takes in utilities, it more than gives back in taxes. It ranks lowest in the "market basket" of ad valorem and sales tax costs compiled by The Boyd Company. The spread between Savannah and Miami is just over $400,000 per year.

Atlanta and Savannah appear to provide a better reach when shipping costs are reviewed. The long haul up the peninsula to reach the main body of the U.S. can add as much as $1.3 million to truckload costs.

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