ITS Logistics is opening a 1,045,889-square-foot distribution center at Northpoint Development Intermodal Logistics Center in Haslet, Texas. It’s a more than $100 million investment in the region, according to the company’s press release announcement.
The Fort Worth Report’s Seth Bodine spoke with Ryan Martin, president of Assets for ITS Logistics about the new distribution center and challenges facing the supply chain.
Seth Bodine: Tell me about this new distribution center. How large and how many companies might be able to use it?
Ryan Martin: It’s just over a million square feet, about 1,050,000 square feet, just under that. It’ll be our flagship on how we’re going to build out buildings of the future. We’re building out one in (Indianapolis) that’s going to be a little bit smaller than that. That’s going to have everything down to the same carpet, tile and floor. So it’s how we’re looking at buildings going forward. How many customers is really dependent on the types of businesses we place in there. I could see anywhere from five to 10 customers, depending on the size of those customers, or could even be one customer depending on growth projections from our customer base.
Bodine: And where will the center actually be located?
Martin: It’s in Haslet. It’s by the BNSF ramp outside of the Alliance properties.
Bodine: So is Hillwood one of the reasons why you were looking at Tarrant County in the first place, because it’s like it’s such a big hub for distribution?
Martin: I’ve run operations out of Alliance, out of Cedar Hill, all in North Texas. I like that area, because it’s up and coming, they’re building housing around it pretty substantially. It’s got a great labor pool, it’s a good area. You know, it seems like they’re figuring out the traffic on that side as well. Because traffic, it used to be horrendous. So, especially on 35 West. So it seems like it’s gotten a lot better. It’s really close to the major BNSF hub. FedEx has a huge hub there. So it just makes sense operationally for us, because we’re looking to build out campuses. So when we look at campuses, it’s not just one building here, one building, you know, in Richardson, one building and Cedar Hill, one building throughout. We’re going to actually build out our buildings very close to each other. So we could move our employee base, our labor share, between the buildings when one operation is surging, and the other is soft, so it’ll definitely help us long term.
Bodine: So can you tell me about what the importance is of a distribution center in the large picture of a supply chain?
Martin: So these days, it’s very important because everyone’s going to ecommerce, right? So historically, you used to have distribution centers that were mostly just fulfilling retail, right? And then that catalog came around, I would say pre-ecommerce. And then started building out more and more distribution centers because you had to fill catalog orders.
And then over time, a catalog has morphed mostly to online web e-commerce, which is a ton of distribution centers, because it replaced a lot of the store footprint. So there’s all kinds of different distribution centers in the world, right? So from a third-party logistics provider it’s something where you have customers that are really good merchants, they really understand their product, they love their product, but they don’t understand supply chain or logistics and quite honestly don’t want to. It’s not in their core competency. So they outsource companies like ITS Logistics, or what have you, to provide those fulfillment or transportation solutions or whatever it may be. Because they’re not the experts in it. They’re the experts on making, you know, pots and pans and or a certain type of fashionable clothing or what have you.
So it’s very imperative that you have you know, a really robust distribution network when it comes to e commerce fulfillment because no one likes when they order something online and it takes 12 days to get it right? We’ve become a very impatient type of society. Right? If it’s two days, that’s almost too much. It’s the Amazon effect. So that’s why you see so many distribution centers popping up everywhere, especially in North Texas. It’s mostly being built out in the outskirts, because most of the land within I would say, like in the center of the city, is pretty much done. It’s all gone.
Bodine: Are there any lingering challenges with the supply chain that ITS Logistics is still dealing with? And are there solutions that the company is coming up with to try to solve those problems?
Martin: I would say there’s tons of supply chain issues still, to this day. I think it’s the global effect. It’s what’s continuing to happen based off what started in March 2020. And it hasn’t really settled. And it’s starting to, though, so I think we’re starting to get to a degree of normalcy. It’s going to take a little bit of time, though, to get to that degree of normalcy. It’d be sometime I’m thinking in 2023.
So for us, I would say the biggest challenge that we will continually see is this lack of labor to do the functions you need to do. So the way you offset that is either automation. Or you do what we’re doing, which is when we build campuses, prototypically, you’re always going to have accounts that are slower, you’ll have summer base accounts, you have winter base accounts, where you could actually share labor from building to building operation to operation, whether it’s within the building or separate buildings.
So that’s what we’re doing, just to make sure that we offset that. Right now, quite honestly, the other challenge that we’re seeing, I think this is more short term, not necessarily long term is the lack of space. Every customer has over-purchased based off the supply chain challenges in every customer we have, I don’t think there’s one customer that, you know, is just right on their inventory position. Everyone has too much stuff. So that’s something that we can’t necessarily control. There’s not a lot you could do there. It’s like when you fill up your closet; there’s not much more you can do in the space of your closet, right? Same as with a million-square-foot building; there’s only so much you could do before it gets unproductive and unsafe.
Bodine: Do you anticipate that the space in this new warehouse will fill up pretty fast?
Martin: Yeah, we’re betting on it. We have a good amount of activity already on it. And it’s my guess it probably won’t happen, like we won’t actually be operational in this building until late next year. The way the building’s going and there’s still delays on certain items, whether that’s electrical, lighting, you know, whatever it may be there’s specific delays on certain items that’ll hold up the building a little bit. But we’re pretty far out and ahead of it. So we’re pretty confident we’ll be able to get it, but it’s going to be a challenge.
Bodine: Anything else you’d like to add? Or think readers should know?
Martin: I mean, from our standpoint, I think it’d be key to call out that we’re big ambassadors with the community. We want to do what we’ve done in Northern Nevada in both Indy and North Texas. We’re starting to get there in Indy.
North Texas, we typically will pick a school, we will be the biggest advocate for that school. We will do everything, you know, from branding our trailers to you know, helping with the supply chain programs within those schools. We’re not just another prototypical company that comes in and just plops in a building or operation and then you know, just becomes kind of, I would say wallpaper to the community, right? Our goal is to get ingrained into the community. I’ve lived in North Texas multiple times. Really like the area. We want to be a good ambassador to our brand within the community. So that is something that we definitely want to call out.
Seth Bodine is a business and economic development reporter for the Fort Worth Report. Contact him at firstname.lastname@example.org and follow on Twitter at @sbodine120.