Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Most shippers associate Averitt Express Inc. with its less-than-truckload (LTL) business that serves customers in 13 states in the Sunbelt, the Carolinas, and the Mid-Atlantic. Or with its role in "The Reliance Network," a group of seven regional LTL carriers that pool their resources to provide single-line deliveries across the U.S. and Canada.
Fishers Finery doesn't happen to be one of those shippers. In fact, the New London, Conn.-based manufacturer and online retailer of ecologically friendly clothing, jewelry, bedding, and lifestyle items doesn't use Averitt's trucks for its customer deliveries. Yet for the rest of its products' journey from eight overseas factories—seven in China and one in Italy—to customers across the U.S., Averitt has become indispensable.
At the heart of Averitt's value proposition is a service that few truckers offer: warehouse space embedded in its terminals. Though carriers sometimes provide warehousing and DC capacity at locations apart from their terminals, it is unusual to carve out warehouse space within them. At Averitt, this means using all available space—which will include its trailers—should capacity inside its 85 terminals get tight, according to Phil Pierce, executive vice president, sales and marketing for the privately held Cookeville, Tenn.-based company. Capacity in each terminal will vary, Pierce said.
Shippers are not required to sign a contract to use the common warehouse space. However, Averitt requires a legal time commitment to utilize its seven contract warehouses, which are separate from the in-terminal locations, Pierce said. Fishers uses Averitt's common warehouse space.
Carrier warehouses like this Averitt facility can be a way for smaller importers to level the playing field.
For Fishers, a four-year-old company growing at a 100-percent annualized rate but still watching every dollar that goes out the door, the Averitt service has been a solid fit, according to Craig Barnell, Fishers' co-founder. E-tailer Amazon.com Inc.'s "Fulfillment by Amazon" (FBA) service, which Fishers uses exclusively for its direct-to-customer fulfillment, has warehousing capabilities. However, the warehouse fees are generally uncompetitive, mostly because Amazon's process isn't structured to store goods by case-packs, which is how Fishers wants to receive them for fulfillment. Storing by the case-pack requires a different racking system and operational footprint, and it doesn't mix well with Seattle-based Amazon's standard retail fulfillment process, according to Barnell. Amazon "doesn't want to be a Fishers Finery warehouse," he said.
Furthermore, because Fishers' inventory turns four times a year, the merchandise would need to be warehoused at Amazon's centers for months at a time. Barnell couldn't justify the ongoing cost. "It's a fortune," he said. Using the Averitt service lets the retailer avoid that expense. Barnell estimates that warehousing Fishers' inventory with Averitt costs about one-sixth what it would with Amazon.
FULL-SERVICE PROVIDER
To understand Averitt's role in Fishers' supply chain, it helps to know something about the retailer's distribution operation, which supports about 2,000 stock-keeping units (SKUs). About 80 percent of Fishers' U.S. imports enter in less-than-containerload (LCL) service through the Port of Long Beach. The remaining 20 percent is flown to DHL Express's U.S. air hub outside of Cincinnati. Averitt is Fishers' exclusive freight forwarder and customs broker for all shipments, managing the process from the purchase order to delivery to the carrier's warehouses.
Once the goods enter the U.S., they are either drayed by a third-party trucker to an Averitt terminal in Hawthorne, Calif., about 15 miles south of Los Angeles, or move via intermodal service to Averitt's main customs clearance facility in Memphis, Tenn., where, once processed, they are trucked by Averitt to its terminal in Erlanger, Ky., just outside Cincinnati.
At the Hawthorne and Erlanger facilities, both of which are located near Amazon fulfillment centers, Averitt holds Fishers' goods until a customer order is received. Working with Amazon's IT systems, Fishers chooses either an LTL carrier or UPS Inc.'s ground-delivery service to pick up at the Averitt warehouses and deliver to the Amazon facility. Fishers has access to ultra-low less-than-truckload (LTL) rates negotiated by Amazon through the e-tailer's "Seller Central" service. (Averitt, which is not a preferred Amazon carrier, does not participate.) Averitt then handles the picking, packaging, labeling, and reconciliation, and prepares the shipment for carrier pickup. Upon arriving at an Amazon facility, the goods are distributed through the FBA service.
Fishers' products reside in Amazon's centers only as long as it takes to move them out the door, Barnell said. Averitt has already done the heavy lifting to ensure that the stays with Amazon are as brief as possible, he added.
Averitt provides Fishers with one through bill of lading, one consolidated invoice, and one point of contact with a dedicated account manager, according to Barnell. What's more, Fishers doesn't need to hire an in-house logistics practitioner to manage the process, Barnell said.
Barnell had his pick of hundreds of freight forwarders and customs brokers, as well as an abundance of customer fulfillment centers that perform pick and pack services. However, none of the centers wanted to manage fulfillment requests for Amazon by case-pack quantities. Once Barnell realized that Averitt could provide the inbound support and the warehouse capacity to handle goods the way he wanted, he thought, "Why couldn't they be the DC?"
Fishers could have opted for a lower-cost inbound service provider than Averitt. However, Barnell was unwilling to roll the dice with a less-seasoned partner in the complex and demanding international logistics arena. Besides, the back-end savings on warehousing and LTL, as well as avoiding the payroll drag of hiring an employee to manage logistics, offset the higher front-end costs, he said.
HOW IT ALL STARTED
Averitt expanded into carrier warehousing about five years ago through a long-running delivery relationship with retailing behemoth Wal-Mart Stores Inc. Because Wal-Mart's vendors—who were Averitt's customers—already held their goods at Averitt's terminals, the carrier was able to quickly move them from the warehouse to the truck. This helped Averitt consistently hit Wal-Mart's four-day "must-arrive" requirements.
The model took on more relevance after Bentonville, Ark.-based Wal-Mart compressed its delivery deadlines to one day for perishables and two days for dry goods to meet more demanding e-commerce delivery standards, according to Pierce, the Averitt executive. Through the warehousing model, Averitt successfully adjusted to the tighter windows, Pierce said.
Much was riding on Averitt's performance: Failure to meet Wal-Mart's requirements can result in a chargeback to the shipper, a ding to the shipper's compliance score, or both.
The success with Wal-Mart's vendors led Averitt to push out the solution to the broader retail market, especially with e-commerce shippers that supply to marketplaces like Amazon and independent merchants selling through their own websites, Pierce said.
The Averitt executive said the service is not designed for businesses seeking traditional long-term storage capabilities. "We are not in the storage business," he said. "But if a company is looking to use our warehousing as a way to accelerate its forward supply chain, that's where we can help."
According to Barnell, there are millions of e-merchants just like Fishers: smaller, fast-growing concerns looking to connect overseas producers with U.S. consumers, and trying to level the playing field through cost-effective services like carrier warehousing. For them, the Averitt model may be worth exploring, he said. "Averitt has been a godsend for us," he said.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.