Team DCA is a national network of ‘regional best’ 3PLs, each committed to the success of customer businesses in its regional market and well connected with industrial real estate providers, materials and equipment suppliers, carriers providing ‘best in market’ services.
We regularly ‘spotlight’ geographic regions and DCA member companies throughout the USA, highlighting logistics trends and outlook for supply chain management in every major US market. This month: M & W Distribution in the US Southeast:
M&W – Warehousing and Distribution
Every market in the United States faces challenges right now, none more demanding and none more unprecedented than those facing the US Southeast.
In a recent interview with Maurice Bremekamp of M&W Distribution Services, we discussed how the Atlanta headquartered warehouse logistics leader is dealing with impacts of Covid-19 in Georgia and Florida markets and the ripple effects on everything from transportation to equipment, the labor market, real estate capacity and the attitudes of people in the thick of it: from customers to team members and management.
LABOR MARKET
It’s an incredibly difficult labor market. You hear the story over and over. Every warehouseman in the country is trying to hire everything from shipping clerks to warehouse floor personnel, customer service people to forklift operators. Even M&W Distribution Services which has increased pay to entice workforce applications in the face of growth and demand for its services has experienced a low ratio of folks actually showing up for interviews when they can get them scheduled. Unemployment is running at 4% in Georgia. The southeast is a ‘mixed bag’ of reality, with people feeling they’re doing well, feeling the pandemic is over though hospitalizations are up. There is a big unvaccinated population in the Southeast, which shows up as red to deep, deep red on the CDC maps of affecgted geographies in the United States. Yet the states of Georgia and Florida ban masking and requirements for vaccinations and there are city variances as to policy throughout both states, for mixed result. The Georgia World Congress Center is being used as a hospital and hospitalizations rates with cases continuing to rise at the time of this writing.
But that’s changing now with FDA approval of the vaccines and in fact, with larger cities like Atlanta requiring vaccinations and masks for city employees. But the threat of exposure to Covid-19, a potentially fatal disease to which everyone, with no exceptions, is susceptible, affects absolutely everything from well before the warehouse floor to well after shipping.
COVID-19
M&W Warehouse is implementing the same sanitation protocols and distancing programs put in place in early 2020 in accordance with CDC recommendations and safety requirements. We handle foodstuffs and organic materials and have always operated at a standard of cleanliness well above ‘standard,’ but of course, the Covid protocols are a level beyond. We’ve only had certain people working from home over the course of the pandemic and those decisions were based on child care needs through the very busy 2020.
SUPPLY CHAIN BACKLOGS
Space is at a real premium in our industry right now. In Georgia, around Atlanta, there was more than 35 million square feet of warehouse capacity added jus this year, mostly by Amazon, but it’s not turning the way inventory typically moves. With the ‘great toilet paper shortage of 2020,’ we saw in real time the ‘bull whip effect’ of the old lesson of how over ordering inventory for cushioning supply chain inventories ‘just in case’ for panic buying wreaks havoc on overall efficiency of supply chains: people panicked, thinking there wouldn’t be enough toilet paper for their use during the pandemic and ordered three times more than they’d need. Then some people had three times what they needed and created a shortage in another geography. The supplier ordered triple production in response to demand, resulting in huge amounts in certain places, and an overall operation far from the smooth flow of predictable order quantities supply chain managers strive for.
That is what’s happening to inventory management in the southeast. Customers are increasing inventory levels but typically, they’ll cushion order quantities a bit. However many have experienced item shortages which are prompting them to ‘over’ order cushion quantities now leading to further manufacturing shortages and then backcharges for storage while waiting for component parts. It can be a mess with no end in sight. Meanwhile at the container on ramp, there are sky rocketing prices.
Capacity Constraints & Opportunity
Most warehouse logistics operators – everywhere in the country — are having to turn customers away because there’s simply no space for holding inventory. In most cases under the Distribution Centers of America (DCA) umbrella, member companies have been able to strategically serve existing customer capacity requirements and honor agreements, in many cases, extending contracts at mutually beneficial terms.
For M&W Distribution Services, a large food industry customer acquisition early in 2020 quickly transformed from what could have been regarded as a loss of business to a vitally important gain of warehouse capacity at a critically important time! M&W was able to support the onboarding of multiple client businesses into its Tampa warehouse, a mixture of ecommerce business, industrial paper and packaging services for the fast-growing consumer packaged goods (CPG) sector which is thriving in the central Florida market.
Lead time for equipment
The supply chain blockages also impact running our own business. To efficiently operate the warehouse, the container yard, the warehouse floor, we need our own fleet, equipment from forklifts to batteries and scanners, boxes and shrink wrap and labels to be available, stocked, stacked and ready to use. A single item in short supply affects many other items downstream. When there was an imported fiber shortage for example, no bleach board was coming in to the country, without bleach board, suppliers stopped filling orders for lamps, plants shut down.
Transportation
Never has logistics been more important to your business and transportation more important to logistics. Customers have counted on M&W for a full menu of transportation and distribution services for years.
“I have had the pleasure of working with the folks at M&W Distribution for over 10 years, and their operation is parallel to none. They are extremely customer service oriented and will do whatever it takes to please their customers. Through the years we have worked on a multitude of projects and cost savings initiatives, and I found them to be very knowledgeable and fair throughout our dealings. The Covid-19 pandemic turned supply chains into mass disarray almost overnight, and M&W didn’t miss a beat. They were in total control during these unprecedented times and we were able to provide our customers with continuity of service at all times. In our business, we demand excellence in our 3PL partners and M&W has always stepped up to whatever challenge we might bring to them.”
Lori DiBiase
Vice President, Supply Chain
Newman’s Own
