I love California, but it is truly one of the worst places in the United States to ship ecommerce parcels from to the rest of the country.
It all comes down to location, location, location. While California has great weather, it’s far from where the majority of the US population lives, and therefore shipping items from California results in much greater emissions, transportation costs and transit times.
In fact, if you were to move your distribution center from Southern California to Atlanta or Chicago, you would reduce your average shipping distance by about 40%, or from about 1,500 miles as the bird flies to about 900 miles as the bird flies to the majority of the US population.
If you begin shipping out of two distribution centers, e.g. in Atlanta and Las Vegas, your average distance drops by 65%, meaning you can:
– Reach 90% of Americans within two days
– Cut shipping costs by up to 40%
– Reduce CO2 by 50% and more
Of course everyone has different customer bases, inventory, etc. and so whether it makes sense to ship from California or anywhere always depends on lots of factors, but the key to remember is that DC placement can make a huge difference for costs, transit and emissions.
While you can spend a lot of money modeling where exactly to place your DC, the good news is oftentimes some very basic modeling in Excel can give you the answers you need for simpler scenarios.
I’m certainly happy to share what I’ve done, if you think it would be of value.