DC Velocity - May 2018

18 DC VELOCITY MAY 2018 www.dcvelocity.com newsworthy

XPO launches shared-space
model for retail distribution

About a year ago, Brad Jacobs, XPO Logistics Inc.’s founder, chairman, and CEO, outlined a plan to link its contract logistics, less-than-truckload (LTL), and last-mile operations to dramatically shorten delivery times for heavy goods ordered from brick-and-mortar and online retailers. That strategy reached full flower last month when the company launched “XPO Direct,” a shared-space distribution model that puts customer goods within two days’ delivery of 95 percent of the U.S. population and in close proximity to retail stores for inventory replenishment. Retailers will gain access to XPO warehouses and last-mile hubs at more than 100 locations, the company said.

Jacobs said the program will provide brick-and-mortar retailers with
a cost-effective way of handling omnichannel fulfillment by allowing
them to manage orders without the expense of doing it in their stores
or investing in their own facilities. “In essence, we’re renting out our
scale and disrupting traditional thinking about the capital-intensive
regional distribution model,” he said in a statement.
XPO will use its technology to identify patterns in consumer behav-
ior and seasonality, predict when and where to place products by SKU
(stock-keeping unit) number, and reflow goods to other sites as need-
ed, XPO Chief Information Officer Mario Harik said in the statement.
The service could help large retailers reduce the need to perform
omnichannel fulfillment from brick-and-mortar stores, where messy
shelves and untrained employees add cost to the operation, John Haber,
the founder and CEO of consultancy Spend Management Experts, said
in a phone interview. If a retailer could use forward-stocking locations
provided through XPO, it could cut some of those high costs, he said.
“XPO is better at arranging fulfillment than the people who are
doing that omnichannel work in the brick-and-mortar store,” Haber
said.
XPO could also help retailers manage shipping complexities such
as calculating dimensional weight and choosing the best last-mile
carrier for a particular size of parcel, he said. Large retailers such as
Amazon.com Inc., Wal-Mart Stores Inc., and Target Corp. have their
own logistics capabilities to handle such complexities. However, most
retailers without the scale and resources can’t do it themselves and
could benefit from partnering with XPO, Haber said.
Smaller e-commerce companies would gain the most from XPO’s
offering, Tony Wayda, supply chain practice senior director and prin-
cipal at Boulder, Colo.-based consulting firm SCApath LLC, said in an
e-mail. By helping them solve the classic challenge of getting the right
product in the right place, XPO could find an eager market of omni-
channel retailers and e-commerce providers, he said.
XPO continues to grow its contract logistics footprint. It opened 20
facilities in the U.S. and Europe in the first quarter and will add 100
locations by year’s end. As of early May, it had 775 contract locations.
That network is not affiliated with XPO Direct.
—B.A.
go figure …
49.4%

The percentage of companies expected to be operating multiple DCs by 2020, up from 23. 5 percent today.

SOURCE: SADDLE CREEK LOGISTICS SERVICES

Refrigerated warehousing and freight consolidation service provider Burris Logistics said it has opened a public refrigerated warehouse (PRW) outside of Atlanta. The company says the new facility offers its clients a wider range of cold chain solutions.

The 250,000-square-foot warehouse opened its doors in January and is located in McDonough, Ga., about 30 miles outside of Atlanta, according to Milford, Del.-based Burris.

The facility will operate within the company’s Burris PRW Plus business unit, which offers cold storage solutions through dedicated facilities along the I-95 corridor on the Eastern seaboard, the firm said.

The McDonough location expands the company’s East Coast capabilities and provides additional capacity, particularly for clients producing frozen or refrigerated foodstuffs and for retailers seeking outsourced storage solutions, Burris said. “The big benefit of the McDonough location is that it enables our partners to reach 80 percent of the population of the United States within a two-day transit time,” Michael Pitcher, director of sales for Burris PRW Plus, said in a statement.

In addition to its cold storage space, the facility includes an attached office and space to hold 28,000 pallet positions, Burris said when it first purchased the property in 2017.