TRADE & DISTRIBUTION

Logistics impacts affecting global trade

DCG Corplan identifies the synergistic relationships within the supply chain and recognizes the logistics impacts on transportation activities that are key drivers for the distribution industry.

In parallel, the forecasting of trade cargo and throughput for port facilities is essential in evaluating demand for hinterland warehousing -- central themes crucial for capitalizing on trade networks.

Modern warehousing distribution analysis

DCG Corplan provides guidance on the appropriate positions of cargo-handling and distribution facilities in relation to present and projected markets, resulting in:

  • Increased Market Share
  • Reduced Distribution Costs
  • Improved Customer Service
  • Gains in Throughput and Efficiency
  • Increased Profitability

Case Studies

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Future Port-Related Warehouse Demands Study for the Port Authority of New York and New Jersey
Client: Port Authority of NY and NJ
Location: New York, NY

The focus of the study was to develop market assessment profiles of the New York-New Jersey port related warehousing with respect to location and costs that could affect competitiveness. In association with Louis Berger International, the consultant team: defined the market segments for port warehousing; identified patterns of new warehouse locational changes and trends; quantified port growth, competitiveness and impacts related to warehousing.

Careful attention was paid to the role of heavy containers, export packaging, just-in-time distribution, refrigerated/freezer goods, and industrial products. The nature of high cube and value-added warehousing helped to redefine the future model of warehousing at or near port, and the land, utilities, labor and transportation costs were factored into detail financial analyses. Other competitive port locations such as Los Angeles/Long Beach, Halifax, Philadelphia, and Baltimore were reviewed as well as inland distribution locations such as Exit 8A (Edison NJ) and Allentown (PA).

Study findings revealed that volumes will nearly double by 2015, but much of the warehouse growth will occur at “off-port” facilities. Key investigations involved types of commodities to be imported warehouse throughput, and related information on countries of origin, ultimate destination of shipments, etc.

Consultant advice resulted in the Port Authority abandoning consideration to construct new warehouses on existing port properties.

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Evaluation of the Opportunities and Strategic Implications of the OOIL Asset Sale
Client: Port Authority of NY and NJ
Location: New York, NY

In July of 2006, the OOIL Group announced its intention to dispose of 4 out of its 5 terminals in North America, including Global in Bayonne, NJ as well as the Port Authority controlled NYCT on Staten Island. DCG Corplan Consulting LLC was retained to study the strategic ramifications of the announced sale. This study presented a parallel analysis of the valuation of the two OOIL assets.

In order to meet a compressed timetable, the Scope of Work required careful market analysis and a valuation of the assets based on projected throughput.For the NYCT terminal, we determined a valuation of the terminal in its present form, plus the monetary value that the PANYNJ could contribute through expansion of the leasehold via additional acreage and extension of lease terms. The anticipated transfer fee required for approval of the lease sale was established at 50% of the added value.

For the Global asset, the terminal’s valuation was established plus the value of the raw land for a fee-simple sale. Thirty-year projections of throughput were generated for Global in its current configuration, and additional calculations indicated potential value that the PANYNJ could offer by contributing other lands on the Port Jersey peninsula.

A unique sale/leaseback strategy was developed that united both assets and provided for provided fro equity take-downs keyed to productivity.

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Location Opportunities Major Distribution Center in Central PA
Client:ProLogis Trust
Location: Chamberburg, PA

ProLogis was considering the establishment of a 1.2 million square- foot warehouse/distribution center at a central Pennsylvania location. DCG Corplan Consulting (DCG2C) was engaged to provide input and analysis on pertinent topics that would factor in that investment decision.

The study required the evaluation of labor market availability and turnover, wage costs, real estate absorption, transportation infrastructure, seaport proximity and more. The Chambersburg and Franklin County market was analyzed and competition from Harrisburg-Carlisle area and the nearby downsizing Letterkenny Army Depot as well as more distant competition from Baltimore-Washington corridor.

Study results indicated the proposed Chambersburg facility would be fully competitive with Harrisburg and even more cost-competitive in comparison with the Baltimore-Washington Corridor. Advantages at Chambersburg included low site prices (under $1.00 per square foot), low construction costs (8% below the national average), reasonable operating costs for the structure (real estate taxes and labor-related maintenance charges), and favorable wage rates.

The facility was ultimately constructed and remains part of the world- wide ProLogis real estate holdings portfolio.

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Support Analysis for the Continuation of the Red Hook Container Terminal
Client: American Stevedoring Inc.
Location: Brooklyn, NY

DCG Corplan Consulting was engaged by the operator of the Red Hook Container Terminal to provide supporting analysis for continuation of marine operations at the port.

The study evaluated the true inland origins and destinations of containerized cargo within the New York City, Long Island, and Westchester area, and deduced that Red Hook was underutilized in serving this community. A calculation of potential truck mileage savings of nearly 1.5 million miles per year possible by increased use of the terminal and revealed the degree of inefficiency present in the cargo flow system within the Port of NY. An 11-step program was presented to the operator to grow market share and eliminate the need for an on-going barge subsidy within a seven-year time period.

Detailed demographics of the worker population for the port area were analyzed and actual tax revenue loss to the City and State of New York from furloughing of workers was calculated.

DCG Corplan personnel conducted numerous public presentations of the support study findings, as well as preparing a successful web-based public outreach campaign. The PANYNJ has offered the operator a two-year lease and negotiations are ongoing for permanent continuance of operations.

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Washington / Baltimore Regional Association Warehousing and Distribution Analysis
Client: Washingtopn-Baltimore Regional Assn.
Location: Washington, DC

As consultants to the WBRA, our principals at DCG Corplan Consulting had discovered a major “disconnect” between retailers and wholesalers in the Washington-Baltimore area—the fourth largest concentration of consumers in the nation. In essence, the area was found to be “underwholesaled”, i.e., heavily dependent upon wholesalers located outside the area. Accordingly, WBRA commissioned DCG Corplan to conduct a comprehensive origin-destination study to confirm the extent of this dependency and quantify the opportunities for attracting more wholesaling to the area.

The Wall Street Journal was intrigued with these findings, and the publication sponsored a series of seminars in Washington and Baltimore to familiarize the business community with the situation. The result was prompt and impressive, including a decision by Nordstrom to establish its East Coast Distribution Center in the Washington suburbs and the construction of several large wholesale distribution warehouses in Harford County, a northern suburb of Baltimore.

In a subsequent study, Harford County engaged DCG Corplan (then operating as the Metropolitan Consulting Group) to determine how much more land should be re-zoned to accommodate additional warehouse development.

 International Trade Strategies

Total value of U.S international trade is advancing at a compound annual rate of almost 7%, expected to exceed $2.5 trillion per year, and the trade imbalance continues to increase. Imports are growing at an annual rate of 9% while export value is increasing about 4% per year, with exports of services accounting for 30% of total value.

In order to capture this demand, DCG Corplan's research and marketing tools assist ports to increase their annual throughput by quantifying total movements, measuring loss to competing terminals, and recommending ways to recapture this tonnage.

For cargo growth deversification, we help you to identify key shippers and consignees, produce pro-active and persuasive marketing documents, and assess requisite capital outlays and the return on these investments.

 Distribution Strategies

Logistics activity creates place (transportation) and time (storage) utility and relates to "physical distribution", or the movement and handling of goods from point of production to the point of consumption. From a management viewpoint, the problems of business logistics extend to include all aspects of order processing, supply scheduling, inventory management, warehouse operation, and transportation.

DCG Corplan objectively evaluates whether your company should own its logistics assests or manage those of an outside provider. Activity-based costing is applied which traces back overhead and direct costs to specific products, services, or customer accounts based upon how resources are actually used.