By Tom Ballard, Chief Alliance Officer, PYA
It is difficult to imagine that any individual’s daily life has not been impacted by the explosive growth in eCommerce as people moved to online ordering during the COVID-19 pandemic. In fact, online spending reached $791 billion in 2020, an amount that is almost 20 percent of all retail sales.
That number is projected to reach one-third of all retail sales by 2030, according to Dusty Holcomb, the new Chief Executive Officer (CEO) of Red Stag Fulfillment. The fast-growing, Knoxville-based company that was founded in 2013 is part of the Mollenhour Gross portfolio of businesses, and Holcomb joined Jordan Mollenhour for a Knoxville Chamber webinar earlier this week titled “Logistics Impact on Expansion.”
“If you don’t perceive yourself in the logistics business, you may want to reimagine your business,” Mollenhour told attendees as he described two developments that are likely to have long-term impacts on businesses in the region. One is the shifting of cargo from the jammed West Coast ports in Los Angeles and Long Beach to Charleston, SC and Savannah, GA on the East Coast. The other is a new Northeast Georgia Inland Port which will move cargo containers of imports and exports by train between the Gainesville area northeast of Atlanta and the docks in Savannah—a trip of approximately 300 miles by truck.
“It (either development) means your supply chain is closer,” Mollenhour said, adding, “It can have significant impacts on your business whether you perceive yourself in the logistics business or not.”
Holcomb became CEO of Red Stag a little more than six months ago, moving to the area from Charlotte, NC. Today, he’s overseeing an expansion of the company’s fulfillment capacity that is adding a third location in Sweetwater. When completed next August, the facility will double the pallet storage capacity that currently exists in Red Stags’ two existing facilities in Knoxville (East Coast) and Salt Lake City (West Coast).
The new Sweetwater facility will be 700,000 square feet, but the site can accommodate 4.5 million square feet as needed. From the two existing facilities and planned new location, Red Stag can reach 96 percent of the country within two days.
“We do the heavy lifting of fulfillment and shipping for our clients,” Holcomb said, citing its expertise in handling large, heavy, or oversized products. “We (also) sweat the small stuff.”
Much has been written in the mainstream media about the cargo ships that might be idled in the waters off the two West Coast ports for nearly two weeks, and Red Stag’s CEO provided a good explanation of the challenges that only start with unloading those ships.
- “There simply aren’t enough trucks and chassis to move all the containers,” Holcomb said.
- Container shipping costs are up more than 500 percent.
- The system itself is way over capacity by more than seven million packages a day.
- There are significant labor shortages, including a need for 80,000 truck drivers, a particularly challenging number when you consider that: (1) more than 70 percent of all domestic freight is carried by trucks; and (2) American freight is up by 20 percent thus far this year.
- There’s also a shortage of storage space, particularly near the ports.
“This is causing businesses to move from ‘just-in-time’ to a ‘just-in-case’ approach,” Holcomb said of how they handle inventory.
Noting that logistics is the power that enables businesses to grow, he also cited an enviable position in terms of Tennessee. It ranks #1 in the Southeast and #6 in the country in terms of truck transportation and #10 in the nation in terms of warehousing and storage.