Economic Feasibility Analyses 3555 



PLANT LOCATION AND FREIGHT COSTS 



As previously noted, mill prices for sheathing are dependent on the cost of 

 transportation to market (tables 28-6 and 28-7). 



Because the wood resource for flakeboard is distributed throughout the South, 

 many locations can advantageously serve large markets. Four such locations, 

 with associated markets, are listed (table 28-8). 



The towns named as possible mill sites are not necessarily optimum; they 

 served, however, as locations from which to base transportation charges to 

 markets. Rail transport costs to representative markets range from about $10 to 

 over $25/MSF of 1/2-inch flakeboard (table 28-9). Rail freight from Crockett, 

 Tex. to Kansas City seems disproportionately high ($25.88); lower transport 

 costs could perhaps be achieved from a different location in the general area. 



Approximate costs to truck '/2-inch flakeboard from these locations are: 



Origin and Minimum load 



destination 24,000 pounds 30,000 pounds 



- $IMSF-— 



Crocket, Tex. 



Houston — 21.45 



Kansas City 61 .03 — 



Hoxie, Ark. 



St. Louis 30.00 — 



Chicago 47.91 — 



Waycross, Ga. 



Tampa — 29. 1 6 



Mobile — 36.66 



Grafton, W. Va. 



Pittsburgh 28.33 27.29 



New York 43.12 41.24 



ESTIMATED SALES PRICE OBTAINABLE 



To predict fob mill prices for Vi-'mch flakeboard sheathing, a delivered price 

 at which the retailer will switch from plywood to flakeboard must first be 

 estimated. Because flakeboard from southern hardwoods is heavier and harder to 

 nail than plywood, it will probably have to be offered at a price perhaps $20/ 

 MSF lower than plywood. At 1977 plywood prices this suggests fob mill prices 

 in the range from $192 to $218/MSF, depending on mill and market locations 

 (table 28-9). 



It is recognized that plywood prices were at record high levels in 1977. In 

 1981 and 1982 they were significantly lower and in the low market of 1974, fob 

 mill prices for 1/2-inch plywood were $100/MSF lower than the 1977 average. 

 Over the several decades immediately ahead, however, it seems likely that 

 prices indicated in the right-hand columns of table 28-9 will be obtainable. 



