March 5, 2015

Study: Kent and Ritzville among top cities for distribution centers

Kent and Ritzville are among the top 25 cities with the best logistics for operating a distribution center, according to a report from a Princeton, New Jersey-based consultant.

The Boyd Co., which helps firms decide where to locate operations, said annual operating costs in Ritzville for a 500,000-square-foot distribution center that employs 150 people would be $11.35 million. That's the second lowest cost among the top 25 logistics-friendly cities. Kent has the 11th lowest annual operating costs, at $12.49 million.

Boyd

Both Kent and Ritzville are near intermodal facilities where cargo can be transferred between ships, trucks and trains. This form of shipping is more environmentally friendly, according to the report, because it reduces travel by trucks and emphasizes rail.

Intermodal transportation opens up national and global markets for shipping. For West Coast companies, one popular destination is China.

“Companies are thinking global like never before, and Washington is really the gateway to the booming middle class in Asia,” said John Boyd, principal of The Boyd Co.

Boyd said Kent is close to both Seattle and Tacoma ports. The labor pool of blue- and white-collar workers is deep in the Kent area, and it's near the headquarters of huge companies that rely heavily on warehouses, such as Amazon.com and Costco Wholesale.

Ritzville is an inexpensive market and close to Spokane. It is near an east-west rail line between Chicago and Seattle, and a line that travels south to Pasco and Portland.

Ritzville has access to cheap hydro power from Big Bend Electric Cooperative that can mean savings for companies that need climate-controlled warehouses.

Washington is seeing a lot of business come from California. Boyd said California can be a tough environment for businesses, and the recent drought has pushed some companies, particularly in food processing, to find more temperate climates like Washington or Idaho.

Distribution centers have become great real estate assets in recent years, mostly due to online shopping, Boyd said. Customers want faster shipping times, and that requires more distribution centers near populated areas.

Amazon recently opened a distribution center in DuPont, its third in this state, and now is building another distribution center in Kent.

More cities now like distribution centers because they can generate big property tax revenues, and employ both high- and low-skill workers.

“E-Commerce is a phenomenal driver,” Boyd said. “For all these transactions, there has to be a call center and some type of distribution warehouse.”