Inbound Logistics | January 2022

It is unclear how each retailer plans to leverage its newly acquired operation. AEO has been quoted as stating that Quiet Logistics will operate independently, while Ashley Furniture stated in a press release: “We are excited to welcome members of the Wilson team as we continue to service existing customers and expand upon the strong legacy established by Wilson.” While 3PL acquisitions have been prevalent for some time—XPO Logistics, for example, acquired 17 companies in one year—shippers acquiring 3PLs represents a sea change. These are not larger logistics rms growing through the acquisition of smaller providers, but shippers purchasing their own service providers. Industry analysts are in a wait-and-see mode, saying it is too early to tell if this is a trend or a temporary reaction to market factors. Similarly, the effectiveness of these new mergers is too soon to be validated. FROM COURTSHIP TO MARRIAGE However, supply chain strategic advisors such as Adrian Gonzalez, president of Adelante SCM, recognize several reasons a shipper might choose

American Eagle Outfitters, a global specialty retailer best known for its jeans, recently bought e-commerce fulfillment company Quiet Logistics; it also absorbed e-commerce delivery startup AirTerra in May 2021.

“For years, logistics has been viewed as a cost center,” says Gonzalez. “Logisticians have worked to demonstrate to the C-suites of their various companies that logistics is more than a cost center, it is also a strategic differentiator.” Jay Schottenstein, chief executive of AEO, validates this dynamic in a press release announcing the acquisition. “An important pillar of our strategy is transforming our supply chain to create greater agility, speed, and diversication,” he says. PROTECTING THE BRAND The explosive growth of e-commerce makes the delivery experience part of a company’s brand. In today’s business environment, delivery drivers are not only dropping shipments at distribution centers and retail stores, but increasingly in the homes of end consumers. In these situations, on-time delivery is not all that is required to protect a company’s brand. Even without harm to its contents, a damaged package can create a negative impression with consumers. Attitudes, and even delivery drivers’ attire, have been proven to reect on the brand whose products the drivers are delivering. “Supply chain is becoming more of a consumer-facing activity,” says Shekar Natarajan, AEO’s chief supply-chain

to make the leap from “courtship to marriage”—from partnering with a 3PL to owning one. Executives are beginning to recognize supply chain management as a key competitive advantage. The AEO and Ashley Furniture acquisitions indicate how company executives have a greater understanding and appreciation of the importance of supply chain management.

To help ease supply chain issues, Ashley Furniture acquired Wilson Logistics. The acquisition is expected to expand Ashley Distribution Services’ brokerage and distribution operations in the western United States.

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