This article appeared in the Fall 2017 issue of JAXPORT Magazine.
In the days before internet shopping, before consumers began expecting immediate delivery of products, distribution was a completely different game.
Today, rather than running from manufacturing sites, exceptional logistics programs, including most retail and wholesale supply chains, run through cleverly located fulfillment or distribution centers (DCs).
The right DC network kindles corporate success stories. In some cases, as with Amazon and FedEx, it defines their vision.
Northeast Florida welcomes DCs with open arms. They bring valuable jobs, property tax revenue, indirect and induced economic impacts, as well as the potential to spur additional and philanthropic community activity.
Cornerstone for Ocean Carriers
JAXPORT’s carriers, facilities and services are a critically important factor in attracting and supporting DCs in the region. In turn, those DCs are fueling continued increases in port volumes and ocean carrier capacity. They are an especially important factor in the port’s ongoing Asian trade growth, where the port has averaged 21 percent growth during each of the past five years. This year, the port anticipates handling 400,000 Asian containers, about 35 percent of its boxes.
Samsonite International S.A., the world’s largest travel luggage company, is one of JAXPORT’s top Asian importers. It operates a million square feet of logistics space in the region. Other local large-scale DC operators include household names such as GE Oil & Gas, Bridgestone Americas, Bacardi, Samsung, and 1-800-Flowers. Altogether, Northeast Florida offers more than 130 million square feet of warehousing and distribution space.
Amazon recently opened its mammoth $200 million, 1,500-job facility, one of two new fulfillment centers in Jacksonville, and BMW will complete a move into its dramatically upsized 500,000-square foot facility. Calavo Growers, a California avocado distributor, is activating a 200,000-square-foot refrigerated facility in Clay County for use as a bagging, ripening and distributing base. HansMill, one of the nation’s leading manufacturers of metal and plastic household products, recently introduced a 121,000-square-foot, highly-automated stainless steel trash can production and distribution site in Jacksonville.
Supporting Deeper Water
Jim Prior, Divisional Vice President of Global Transportation for Coach Inc., said that Coach brings about 85 percent of its distribution center’s product through JAXPORT, and, while the port provides excellent service, more ocean services and capacity are needed. To achieve that, “The single most important thing that can be done in the region for DCs is the harbor deepening,” according to Prior.
Prior said the Jacksonville trade community, including federal services such as U.S. Customs and Border Protection, is business friendly, and that Coach has attracted a strong workforce, including graduates of the local University of North Florida transportation and logistics program.
Big League Exports, Too
Most of Northeast Florida’s distribution centers handle both imports and exports, although they are typically heavily import-oriented. Some, especially those in the Puerto Rican or Latin American trades, are weighted toward export volumes.
Tim Crumley is Vice President of Supply Chain Logistics for food giant Sysco International Food Group. He said Sysco’s Jacksonville facility, which handles the Americas, is 95 percent export.
Most of its outbound cargo, roughly 80 percent, is comprised of highly desirable temperature-controlled containers that appeal broadly to ocean carriers. Crumley said that Sysco’s current capacity is about 120 containers per week. “We have been hitting capacity so we will be going to six days, 24 hours shortly, which will bring capacity up to 150 containers per week,” he said.
When asked what accounts for the company’s success, Crumley said it was the ability to service the customer. Location plays a role in this, but, he added, the weaker dollar is driving business growth this year. “We are in a very specialized and competitive business and reduced costs in Jacksonville put us at an advantage,” he said.
Sysco has a number of distribution centers in Florida. Its Jacksonville facility offers 360,000 square feet of warehousing. To hone the company’s competitive edge internationally, Crumley hopes to see continued growth in direct calls by global carriers through JAXPORT.
Late last year Jacksonville-based and family-owned Ja-Ru, a leading supplier of impulse toys worldwide, consolidated its import gateway and now brings all of its products destined for U.S. markets through JAXPORT. Ja-Ru sells throughout the U.S., ships to more than 35 countries and employs more than 150 people, most of them in Northeast Florida.
“It is rare to go into any retailer anywhere in the world and not find a Ja-Ru toy,” Ja-Ru’s President Andrew Selevan said in a news release. “Getting product to market quickly and seamlessly is incredibly important to our business success. Comparing the service we have been receiving at other ports to what JAXPORT now offers us in global connections, efficiencies, savings and the ease of doing business made the decision to consolidate our shipments here an easy one.”
Central Florida-based Blackwood Industries began moving all of the company’s imported products from Asia through JAXPORT earlier this year. The dining products supplier ships everything from flatware to apparel as well as furniture and other items to businesses around the world, including popular U.S. restaurant chains. Blackwood uses a third-party provider to coordinate the movement of its cargo through the port as well as to handle the warehousing and distribution.
“Using JAXPORT helps us reach our U.S. customers quickly and efficiently. Looking to the future, we are encouraged by the investments JAXPORT is making to continue offering excellent shipping options from Asia,” said William Green, Blackwood Senior Director of Supply Chain Management.
Lower Logistics Costs Support Bottom Lines
Distribution facilities dot the Northeast Florida landscape. The location allows major retailers and wholesalers to streamline supply chains, prevent delays, and eliminate unnecessary handling of shipments, all while serving increasing consumption in the Southeast U.S. and beyond. As companies reduce logistics costs, they support a stronger bottom line.
With its expanded container service and capacity, JAXPORT can serve national and global businesses with a substantial cost advantage, in some cases exceeding $800 per TEU, according to JAXPORT Vice President and Chief Commercial Officer Roy Schleicher. That’s enough to bring a substantial number of companies to town for a look. The region is betting that they’ll like what they see.