Logistics
Why the Southern U.S. Has Emerged As an Attractive Logistics Location for the Auto Industry
The many cost-based, human resources, locational advantages, supply chain and long-term tax advantages of locating and operating auto industry-specific logistics strategy in the Southeastern U.S. are explored in this analysis. Of the many advantages to auto manufactures of having logistics centers and operations in the Southeastern U.S., the most significant are the long-term tax incentives that drastically reduce operating expense for new ventures, as Mercedes was able to negotiate with the Alabama state government for example (Camp, 1994). The tax incentives are also a central catalyst that fuels the development of auto industry-specific distribution and logistics hubs that (King, 2005).
Cost-Based Advantages of Southeastern U.S. Logistics Centers
The most significant costs for many logistics providers are salaries and benefits, followed by the costs of doing business in a specific region including real estate, taxes and any additional local fees (King, 2007). Salary and benefits costs are often significantly higher in states where're there is a high concentration of unionized workers. In southern states the percent of workers who are unionized is 4%, among the lowest in the country (Corbett, 2002). This translates into a significant cost advantage over the long-term operations of any logistics business. Human capital costs in logistics operations often are...
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