“Being able to deliver on that investment in a matter of weeks or months rather than years is critical, especially in this post-pandemic landscape, where capital markets are tight and a lot of companies are held to stringent goals,” he adds. Another bene t 3PLs provide is greater access to capacity. For instance,
Its agship offering, Redwood Connect, is a “platform-as-a-service” that can integrate a wide range of supply chain solutions and data sources. The platform enables Redwood Logistics to get new software up and running and producing results much faster than many shippers can, according to Cavanaugh.
now that fast ful llment is the norm in ecommerce, manufacturers and merchants want to locate ful llment centers closer to consumers. “That has created a shortage of industrial space, because everybody needed to expand their operations,” explains Bill Conboy, president of ELM Global Logistics in Brentwood, New York. As demand for warehouse capacity has pushed up prices, manufacturers and wholesalers often nd it too costly to add new space of their own, Conboy says. But an asset-based third-party logistics provider can meet the need, as ELM does with several facilities in the New York metropolitan area. BROAD STROKES Using a 3PL’s warehouse not only gives a shipper a broader footprint than it might be able to maintain on its own, but it also makes the company more agile. It can store more or less inventory, and use more or less labor, as demand for its products rises and falls over time. “There’s no contract obliging the shipper to space or man hours,” Conboy says. When a company relies on its 3PLs to provide space in their warehouses, those facilities can also become integral links in the shipper’s supply chain. That’s the case with one ELM client, a large manufacturer of corrugated boxes. The manufacturer ships rolled paper by rail to ELM, which holds the product in one of its facilities. Then ELM provides the production line with a steady stream of paper, as needed. “We deliver up to 15 or 20 loads a day to their manufacturing plant,” says Bill Conboy, ELM’s president. When the boxes are nished, ELM arranges to deliver them to customers such as Amazon. A large canning company in California also relies on 3PLs to provide a network of distribution facilities throughout the United States. This reduces the distance that product needs to travel from warehouse to customer to ful ll an order.
PRIME PARTNERSHIP: PARTNERSHIP: Taking Rt Rt in the U.S.
In 2015, Oemeta, a German manufacturer of cooling lubricants for industrial use, was trying to increase its North American presence. It had a warehouse in Canada, but for U.S. customers it mostly shipped products from Europe with help from a freight broker. Seeking a better way to handle its fast-growing U.S. business, Oemeta formed a relationship with Nexterus, a 3PL based in New Freedom, Pennsylvania. “Our first round of work was to look at where their demand was in the United States and get a distribution center in place that made sense,” says Ryan Polako, president of Nexterus. An analysis determined that Oemeta should locate a distribution
center in Salt Lake City. But to keep things running while the manufacturer built that facility, Nexterus got Oemeta into a contract warehouse in Altoona, Pennsylvania, and began managing the company’s logistics operations.
“We switched our brokerage business to Nexterus, so they would handle all of our importing into the United States and some into Canada,” says D.J. Latford, chief supply chain ocer at Oemeta in Salt Lake City. “We also used them as a 3PL for all our shipping needs throughout the United States.” The Salt Lake facility opened in 2018. Along with a DC, it includes a manufacturing plant and Oemeta’s U.S. headquarters. Oemeta’s own employees sta the DC, but Nexterus continues to manage all the transportation and helps Oemeta develop strategies for future growth. Nexterus makes Oemeta’s logistics operations much easier than they would be otherwise—for example, by helping Oemeta negotiate today’s complicated transportation landscape, Latford says. On the strategic side, Nexterus is now helping Oemeta expand its distribution network, choosing locations for new DCs in the Eastern U.S. and in Mexico. Finding a reliable facility in Mexico is a particular challenge, Latford says. But with its modeling technology, Nexterus can search for locations that provide what Oemeta needs. “Nexterus oers studies to help shippers find the best locations and the best setups for their business,” Latford notes.
86 Inbound Logistics • January 2024
January 2024 • Inbound Logistics 86
Powered by FlippingBook