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.
| Transportation
Costs |
U.S. |
Region |
W.Va. |
W.Va.
advantage
vs. region |
| Plastic |
| NAICS
325211: Plastic material and resin
manufacturing |
$7,148,929 |
$7,889,982 |
$7,717,056 |
($172,925) |
| NAICS
325991: Custom compounding of purchased
resins |
$3,265,197 |
$3,622,042 |
$3,538,772 |
($83,270) |
| NAICS
562920: Plastic recycling |
$449,918 |
$494,602 |
$484,175 |
($10,427) |
| NAICS
3261: Fabricated plastic |
$2,120,701 |
$2,368,730 |
$2,310,852 |
($57,878) |
| Average |
$3,246,186 |
$3,593,839 |
$3,512,714 |
($81,125) |
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
|