- Averitt Express opened a 400,000-square-foot distribution center near Dallas, close to its Grand Prairie, Texas, facility, the LTL carrier announced Wednesday.
- Averitt officials said they chose the location because it is near the Dallas-Fort Worth International Airport, the Dallas Love Field Airport and numerous intermodal depots. The center will thus be able to handle the area’s growing international volumes, the company said.
- The center will be Averitt’s largest for distribution, the company said, and will add to more than 2.5 million square feet of space across more than 40 locations. The LTL carrier’s expansion comes at a time when e-commerce demand has grown by leaps and bounds, making it necessary to move distribution centers closer to the buying public.
Online commerce has increased the need for LTL fleets and their centers to be closer to consumers, as fulfillment requires quicker loading and dispatch to clients and customers.
“This is kind of the age-old dilemma in supply chain: right product, right place, right time, right quantity,” Joe Dunlap, the managing director of supply chain advisory at CBRE, told Supply Chain Dive in February 2020. “And I think it’s been exacerbated the last seven or eight years as retail has become hypersensitive to e-commerce sales and omnichannel.”
It’s a strategy that supply chain experts have said will continue to grow, with more distribution centers located closer to urban areas, and possibly deep inside urban areas, to help speed fulfillment.
Such predictions were often made before the COVID-19 pandemic, but the pandemic only accelerated the trend. On top of an e-commerce surge was a sprinkling of federal relief upon taxpayers. And what consumers did not spend during the pandemic is also money waiting to burst through the gates.
Other LTL fleets are readying for the demand. In an earnings call in April, Old Dominion Freight Line officials said they could invest capital expenditures toward as many as six service centers this year. And Estes has already opened 850 new terminal doors in 2021.
Nikhil Sathe, managing director at Logisyn Advisors, told Transport Dive late April that consumers had “pent-up demand,” stimulated by with accrued savings and stimulus money. The constant online buying since last summer has kept inventories low, with more trucks headed from ports and warehouses to meet demand.
“Consumer spending is getting stronger and stronger,” Sathe said.
The signs of continuing elevated demand for trucking can be seen in numbers from DAT. On May 25, DAT said TL spot rates hit all-time highs. Dry van hit $2.39 per mile and reefer hit $2.76 for the week of May 16-23.
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