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One S. Church Street, Suite 200, Hazleton, PA 18201 |
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Distribution
Operating Costs
Operating costs for warehouse and distribution operations in the Luzerne/Lackawanna County compare favorably against operating costs in three competitor locations: Dauphin County, PA; Hightstown, NJ (Exit 8 on the New Jersey Turnpike); and Middletown, NY. The Luzerne/Lackawanna and Schuylkill sites offer the overall lowest cost environments of all the sites studied, followed by Monroe and Dauphin. The three Northeast Pennsylvania sites and Harrisburg offer considerably lower relative operating costs than Middletown and Hightstown. The table below presents the relative rankings of the six locations for the major cost categories (e.g., labor, zoned and fully-serviced land, construction, occupancy, electric power and natural gas).
| Operating Cost Comparison - Relative Rankings* | ||||||
| Cost Factor | Luzerne / Lackawanna County, PA | Schuylkill County, PA | Dauphin County, PA | Monroe County, PA | Middletown, NY | Hightstown, NJ |
| Labor Cost Index | 1 | 2 | 3 | 4 | 5 | 6 |
| Land Cost Zoned and Fully Served | 2 | 1 | 4 | 4 | 2 | 6 |
| Construction Cost - Good Class C Warehouse / Distribution | 2 | 4 | 1 | 2 | 6 | 5 |
| Occupancy (base rent, utilities, operations / maintenance, property taxes) | 2 | 1 | 3 | 4 | 5 | 6 |
| Electric Power Cost | 2 | 2 | 1 | 2 | 5 | 6 |
| Natural Gas Cost | 3 | 2 | 3 | 3 | 1 | 6 |
*Rankings based upon WDG's comparative analysis of cost, by factor, among six locations.
Freight Costs
The outbound freight cost assessment measured and compared the relative costs of shipping outbound freight from the three representative locations (e.g., Luzerne / Lackawanna County, Schuylkill County, and Monroe County) and the three competitor locations (e.g., Hightstown, Middletown, and Dauphin County) to 20 locations in 17 states, plus Toronto and Montreal in Canada. Using representative shipping assumptions based on local company experiences (class 85 rates, population density based distribution, combined TL and LTL shipments-assuming 1.5 billion pounds TL and 19.6 million pounds LTL per year), Monroe County offers the lowest cost-origin location, followed by Hightstown, Luzerne / Lackawanna County, Middletown, Schuylkill County and Monroe County. Using the project-established parameters, shipping from Monroe County has an annual cost savings of $1.075 million over Dauphin County, the highest-cost shipping location. The total costs and cost differentials resulting from the outbound freight cost assessment are presented in the table below.
| Total Costs and Cost Differentials - Six Origin Locations | |||||
| Origin Location | Annual Outbound Freight Cost | Annual Differential vs. Low-Cost Origin Point | |||
| LTL Shipments | TL Shipments | Total Cost | Cost Penalty | Percentage | |
| Monroe County, PA | $1,816,446 | $30,092,192 | $31,908,638 | $ - | 100% |
| Hightstown, NJ | $1,876,600 | $30,271,332 | $32,147,932 | $239,294 | 101% |
| Luzerne / Lackawanna County, PA | $1,849,481 | $30,589,728 | $32,439,209 | $530,571 | 102% |
| Middletown, NY | $1,966,332 | $30,663,516 | $32,629,848 | $721,210 | 102% |
| Schuylkill County, PA | $1,844,778 | $30,840,836 | $32,685,614 | $776,976 | 102% |
| Dauphin County, PA | $1,865,992 | $31,117,788 | $32,983,780 | $1,075,141 | 103% |
Combined Costs
An abbreviated cost analysis to highlight the relative cost differentials among the six locations is presented in the table below. A comprehensive cost analysis is not presented, as it would be misleading to operations that do not match the parameters used in the model. The analysis demonstrates, however, that Luzerne / Lackawanna County and Schuylkill County offer a distinct cost advantage, assuming the parameters used. Monroe County and Dauphin County annual costs are $2.65 million and $3.05 million higher, respectively to Luzerne / Lackawanna County the lowest cost location. Annual costs in Middletown and Hightstown are dramatically higher versus Luzerne / Lackawanna County, at $5.21 million and $7.20 million, respectively. Labor costs in Luzerne / Lackawanna County and Schuylkill County are lower than in the competitor locations, and it is these labor-cost differentials that are major contributors to the operating-cost savings at these locations.
| Abbreviated Cost Comparison - Estimated Annual Costs | ||||||
| Factor | Luzerne / Lackawanna County, PA | Schuylkill County, PA | Monroe County, PA | Dauphin County, PA | Middletown, NY | Hightstown, NJ |
| Lease Cost* | $5,400,000 | $5,200,000 | $5,950,000 | $5,750,000 | $7,000,000 | $8,000,000 |
| Wage Cost ** | $29,254,400 | $29,485,600 | $31,885,600 | $31,406,400 | $32,674,400 | $34,145,600 |
| Shipping Cost *** | $32,439,209 | $32,685,614 | $31,908,638 | $32,983,780 | $32,629,848 | $32,147,932 |
| Total: | $67,093,609 | $67,371,214 | $69,744,238 | $70,140,180 | $72,304,248 | $74,293,532 |
| Differential to Lowest Cost Location: | $ - | $277,605 | $2,650,629 | $3,046,571 | $5,210,639 | $7,199,923 |
Northeast PA Logistics and Transportation Industry Partnership
The Northeast Pennsylvania Logistics and Transportation Partnership (LTIP) was created to formalize the process of developing the technical and advanced skills required for transportation career opportunities and to better align economic and workforce development programs to meet the needs of businesses and the career goals of workers, and to attract and retain quality employers in the region. Formation of the LTIP will serve as a vital focal point for employers, educators, workforce developers and the economic development community.
Back in 2005, representatives from local logistics and transportation companies identified the most critical educational and training needs and shared information economic and workforce development professionals on occupation shortages, skill gaps and challenges to remain competitive and capable of growth in Northeastern Pennsylvania.
A joint effort of the Luzerne, Schuylkill, Lackawanna, Pocono and Northern Tier Workforce Investment Boards, the Northeast PA Logistics and Transportation Industry Partnership then conducted a Training Needs Assessment and an Industry Analysis, developed a Career Pathways Model and designed an industry-specific Web site.
The Northeast PA Logistics & Transportation Industry Partnership has been awarded one of only five PA Career Pathway Pilot Projects in the state by the PA Department of Labor & Industry. The NEPA Logistics & Transportation Industry Partnership Career Pathways Model works like a roadmap for employers and employees. The skills and training needed for each position in the Logistics & Transportation Industry are outlined in the NEPA Logistics & Transportation Industry Partnership Career Pathways Model, making it easy for employees and employers to see the next step! For more information about the partnership, please click here.
A logistics and transportation industry analysis was conducted by the Wadley-Donovan Group (WDG) to assess the strengths, weaknesses, opportunities and threats for logistics and transportation operations in a 12-county region that comprises Northeastern Pennsylvania, with an emphasis on a core area of four counties. The 12-county area consists of Bradford, Carbon, Lackawanna, Luzerne, Monroe, Pike, Schuylkill, Sullivan, Susquehanna, Tioga, Wayne and Wyoming counties, while the core area is defined by Luzerne, Lackawanna, Monroe and Schuylkill counties.
Northeastern Pennsylvania offers a good environment for logistics and transportation employers
Well-recognized firms such as American Eagle Outfitters, AutoZone, Michaels, Amazon, Bradley Caldwell, FedEx Supply Chain, Steelcase and The Nature's Bounty Co., have located and/or expanded in the northeast region, specifically Greater Hazleton.
The region offers:
- Excellent transportation access to a multi-state regional market;
- Strong land and building availability; and
- Competitive operating costs versus Harrisburg, the Lehigh Valley, New Jersey, and Middletown, New York.
Why are Greater Hazleton and Northeastern PA ideal for Logistics and Transportation?
Location
Northeastern Pennsylvania is served by five Interstates, including I-80, I-81, I-84, I-380 and I-476 – the backbones of commerce in the Northeast. These Interstates traverse the region, providing optimal access to almost every destination in this major market area within six hours or less. Greater Hazleton is located at junction of Interstates 80 and 81, the Crossroads of the Northeast.
Low Operating Costs
A distribution center locating in the region will benefit from significantly overall lower operating costs than other advantageously located areas in Eastern and Central Pennsylvania, Central and Northern New Jersey, and the New York Metropolitan Area. A combined cost model for a representative distribution center that includes real estate, labor, outbound freight, utilities, and taxes for a distribution center employing 800 workers shows that a Northeastern Pennsylvania distribution center could offer an annual savings of $3 million over a Harrisburg location, $5.2 million over a Middletown, N.Y., site, and almost $7.2 million over a Central New Jersey location.
Labor would generate the most significant savings. In the cost model, an annual savings of $2.1 million to $4.8 million could be realized at a Northeastern Pennsylvania location over comparable locations in Harrisburg, Central New Jersey and Orange County, New York.
Freight costs for a regional distribution center in the region are also lower than locations in central New Jersey, Metropolitan New York and the Harrisburg area. For example, a distribution center with combined class 85 TL and LTL shipments destined for a 17-state and two-Canadian-province area (southern Ontario and Quebec), annual shipping costs from Stroudsburg are about $250,000 cheaper than a central New Jersey location, $721,000 cheaper than an Orange County, N.Y., location and just over $1 million cheaper than a Harrisburg site.
Workforce Training
The region boasts a strong, well-established community college and university network that offers customized training programs in those courses needed by transportation and logistics operations, such as warehouse/distribution management, distribution and supply logistics, logistics technologies, logistics and supply chain management, supply chain and information systems and auto, heavy equipment and diesel mechanics.
Luzerne / Schuylkill Workforce Investment Board (WIB) and the Hazleton Career Link office assist employers with recruiting and screening potential employees. See our Workforce Resources page and our Business Parterships page to learn more!
Available Sites and Buildings
Greater Hazleton has sites and buildings available to accommodate new industry operations that want to take advantage of the area's assets. There are vacant sites and buildings suitable for a range of industry needs, from small operations to big-box installations. The sites are properly zoned and fully served by utilities, many of which are located within Keystone Opportunity Zones.
Distribution Companies in the Hazleton Area
Some of the larger distribution companies in Greater Hazleton include:
| Company | Service | Square Feet |
| American Eagle Outfitters | American clothing and accessory retailer |
1,030,030
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| Michaels Stores | Northeast distributor of handcraft products | 693,026 |
| Romark Logistics | Northeast distributor of candy products | 651,000 |
| Office Depot | Northeast distributor of office use products | 615,000 |
| Auto Zone | Northeast distributor of auto parts | 600,000 |
| The Nature's Bounty Co. | Distributor of vitamins | 413,600 |
| FedEx Supply Chain | Supply chain logistics | 408,200 |
| Bradley Caldwell | Distributor of hardware, farm & pet supplies | 335,000 |
| The Packaging Wholesalers Co. | Distributor of packaging materials | 293,493 |
| Brake Parts Inc. | Distributor of aftermarket parts for automotive industry | 289,000 |
| Tootsie Roll Industries | Northeast distributor of Tootsie Roll products | 240,000 |
| Tech Packaging | Packaging and shrink wrapping for the food industry | 223,200 |
| US Cold Storage | Refridgerated storage | 210,000 |
These distribution facilities alone track more than 7,200,000 square feet.
