Logistics and transportation provider Ryder System Inc. on Wednesday said it had acquired a Chicago-area warehouse operator, bringing on a chain of DCs to expand its supply chain solutions business in the consumer packaged goods (CPG) division at a time when studies show that demand for U.S. warehouse space has swung to an all-time high.
Miami-based Ryder has bought Midwest Warehouse & Distribution System of Woodridge, Illinois, which operates 17 multi-client and dedicated-customer warehouses, located primarily in the greater Chicago area but also in New York, Pennsylvania, Tennessee, and Texas.
Terms of the deal were not disclosed, but Ryder said it expects the transaction to add approximately $135 million in annual revenue to its supply chain solutions business segment in 2022.
“In addition to having a significant presence in a key geography, Midwest has built a proven model for multi-client warehousing and distribution—a capability that we’ve been targeting for some time,” Steve Sensing, Ryder’s president of global supply chain solutions, said in a release. “We currently serve nine out of the top 10 U.S. food and beverage companies, and this acquisition enables us to offer those customers—as well as additional blue-chip customers in Midwest’s portfolio—even more capacity and greater flexibility.”
Ryder’s move came just a day after the real estate powerhouse Prologis shared research showing that logistics space has fallen to an all-time low. According to Prologis, logistics space in the U.S. is effectively sold out, following the results of the firm’s latest Industrial Business Indicator (IBI), a quarterly survey of customer activity and sentiment.
That hot demand is driven by a trend for logistics customers to shift their business strategies from profit toward resilience, changing from "just in time" to "just in case" inventory management, the firm said. By the numbers, U.S. net absorption reached a record high of 115 million square feet in the third quarter and 280 million square feet year-to-date, a total that is more than double the same period last year, pushing vacancy to a new low of 3.9%, Prologis found.
Ryder said its acquisition was part of a strategy to expand its third party logistics (3PL) offerings within that historically tight market.
“Multi-client warehouse environments are a great entry point for new customers looking for a 3PL that can meet their needs now and in the future,” Ryder’s Darin Cooprider, senior vice president of CPG, said in a release. “As our customers’ businesses grow and evolve, we can seamlessly transition them from multi-client warehouses to dedicated facilities. We offer dedicated transportation solutions for guaranteed capacity and a robust transportation management offering which can help mitigate market fluctuations.”
