FDI REPORTS ON WAREHOUSING COSTS

DEENA AMATO-McCOY

MIAMI -- Distribution centers are reporting increases in costs when viewed as a percentage of sales, but when calculated on a per-case basis, costs have decreased slightly, according to an industry study.

A study of distribution centers revealed a jump in costs from 2.38% last year to 2.49% of total sales in 1996.

Cost per case, meanwhile, declined from 43 cents in 1995 to 40 cents per case this year, according to the 1996 Food Distributors International Warehouse Productivity Analysis, released during last month's Productivity conference, which was sponsored here by FDI, Falls Church, Va., and the Grocery Manufacturers of America, Washington.

Throughput, which is the number of cases moving through a distribution center divided by the labor hours needed to handle them, remained unchanged this year at 70 cases per hour. That rate has remained consistent during the past three years.

Labor costs within the warehouse are on the rise for 1996, based on the survey conducted by Richard Kochersperger, professor for the Center for Food Marketing at St. Joseph's University, Philadelphia.

Hourly labor cost climbed to $14.25 in 1996, up from $13.85 last year.

The study shows labor costs, including direct warehouse labor and indirect labor such as supervision and support staff, represent 70% of the total cost of the warehouse operation. The management and administration staffers account for 6.88% of 1996's labor expense.

Kochersperger noted that the small-chain retailers and single-store operators are experiencing financial difficulties, causing several food distributors to outsource warehouse operations.

"The move to one-stop shopping by the consumer is having major impacts on the entire food distribution system in the form of more perishables and larger volume stores," he said.