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                           PROJECT CASE  


HARBOR FREIGHT TOOLS

Harbor Freight Tools operated a national distribution center out of Southern California. Current and projected volume called for the establishment of a second warehouse, somewhere east of the Mississippi River.

WDGC was commissioned to recommend the optimal location for the second distribution center. Our first charge was to ascertain the least cost location based on freight economics. That was in the eastern Tennessee/western North Carolina area. We then determined that a 250 mile radius was acceptable based on transportation costs.

Next WDGC conducted a locational screen to identify a shortlist of three candidate areas. Labor market indicators played a key role in defining the shortlist. Subsequently, WDGC launched a first hand evaluation of the three areas. This included a series of interviews with local manufacturers and wholesalers. We sought a location wherein Harbor Freight Tools could achieve employer of choice status at a favorable wage level. Other prominent considerations included truck service/cost (including backhaul opportunities), ready to go/fast track construction sites, low natural disaster risk, no inventory tax, nonunion, 4 lane highway linkage, and delivery times to customers.

The end result was a location in Dillon, SC. While Dillon was further removed from markets and carried a higher freight tab, labor and occupancy costs more than offset the differential. Additionally the company received a significant incentives package equal to about $10,000 per new job. Harbor Freight Tools has enjoyed much success as a leading employer. Recently the company doubled its capacity in Dillon.

 

     
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