THE STRATEGY OF LOGISTICS Recently, I have been researching what Temu is doing. Instead of retaining the business model that they started with, Temu has adopted a model of placing inventory in warehouses and fulfilling orders to customers from warehouses vs. only fulfilling orders from manufacturers direct to customers. I wrote a post where I recommended to Temu to partner with the logistics company BroadRange Logistics because I believe BroadRange and their Ultra-Flex program is ideal for sellers who use Temu. https://lnkd.in/gN_BASfu Note: I don't work for BroadRange Logistics. I became aware of the company and their Ultra-Flex model several months ago. I asked if they would be willing to let me use their name in several posts related to logistics. BroadRange agreed. The post I wrote about Temu, resulted in executives and analysts asking my opinion on the topic of logistics strategies. Specifically, should a company make a change from one 3PL to another? I believe they should under the right circumstances. I was also asked if companies that are in distress should outsource to a 3PL. Let's look at real-world examples using BroadRange Logistics (BRL): 1. Florida is on fire with growth. BRL has opened new warehouses in South Florida and the major cities. However, BRL has invested in new logistics facilities in other regions like Indianapolis, IN. BRL manages 11,000,000 square feet of their own warehouse space but they can access 50,000,000 square feet through partnerships. Access to Nationwide logistics facilities is a must-have. 2. BRL offers the most flexible and convenient warehouse and payment terms in the logistics industry. If BRL can offer a company lower prices while freeing up cash, yes, switching to BRL makes sense. There are several companies that are financially distressed who continue to operate their own logistics networks, or they are locked-in to high priced warehouse leases and 3PL contracts. I believe the following companies should contact BRL to discuss a partnership: Lumen Technologies - With 7% operating margins and small warehouses spread out across different states, they should explore consolidating their warehousing needs. Qurate Retail Group - They should assess a consignment plan where they don't pay anything until product is moved. BRL can probably pay Qurate $7M to $10M to move their distribution to BRL, and Qurate can focus on their core business. I believe Newell Brands, O-I, EVI Industries, Inc., and Tupperware would benefit from the same strategy. The following companies would benefit from exploring a consignment model, and exploring alternative solutions for their logistics needs: SpartanNash Rent The Runway UNFI Solo Brands Advance Auto Parts BRL is the only 3PL that I know of that offers an Ultra-Flex plan. I strongly encourage the companies I listed ( and others) to explore what BroadRange can offer. I’m impressed with Ultra-Flex. #retail #logistics https://lnkd.in/gcCv_pwJ
❌❌❌❌❌‼️‼️‼️ The article I’ve attached addresses a topic I’ve mentioned many times in posts - it is only a matter of time before Temu, Shein, Albania and other large Chinese companies collaborate on logistics. Whenever I’ve brought this up in the past, many people will comment that it will “never happen.” That’s false. It will happen.
❌❌❌❌❌‼️‼️‼️ The following executives should contact Jacob Rosenfeld at BroadRange Logistics to discuss alternatives for their logistics needs: Sandy Douglas Louis Martin Tony Bashir Sarsam David Petko Jennifer Hyman Colleen Hastings Chris Metz Michael McGoohan Kate Johnson Kye Prigg David Rawlinson II Stacy Bowe Giancarlo Currarino John Haudrich
Would you know the average processing cost charged per order by BRL or any ultra flex logistics company vs a traditional 3PL ? One time cost savings due to financial engineering and flexibility to come out of contract are important and great but both the businesses would need per order opex cost savings to survive when a company is doing regular business and not selling a one time product..?
Brittain Ladd Thank you. Broadrange is the only 3PL to my knowledge that is willing to be this flexible, with ability to have a significant impact on the bottom line, especially important when many companies you named above suffer from very slim margins.
Good read. this post is sharing advice to know other supply-logistic networks to learn and adapt. Thank You.
This is a great analysis and very accurate Brittain Ladd a win win. I look forward to discussing with each of the executives you mentioned from the groups who can take advantage of our UltraFlex model to free up cash flow and never pay for the space they aren’t actively occupying again.
Seems to be happening over here in Europe as well : the big Chinese e-commerce players are opening warehouses closer to the end consumer, instead of shipping from the factories in China to the final consumer in Europe. Not all goods are stocked there, and hence eligible for quicker delivery. Not sure who operates these warehouses, which must be massive.
Very helpful
E-Commerce l Supply Chain and Logistics Executive l Parcel and Last Mile Delivery Expert l Strategy Consulting l M&A l Robotics and Automation l Fulfillment l Business Analyst
2mo❌❌❌❌❌‼️‼️‼️ The challenge with the companies I listed is that most of them are either experiencing cash flow issues and/or high logistics costs. Some of the companies own and operate their own logistics facilities or lease and operate their own logistics facilities. Advance Auto Parts, for example, operates 47M square feet of warehousing. I strongly encourage the executive team from Advance Auto Parts to contact Jacob Rosenfeld of BroadRange. Stephen Szilagyi Shane O'Kelly