Rethinking Inbound Logistics

I'm joined by Ed Smith, vice president of distribution and fulfillment at Averitt. Ed oversees our port side operations, including our transload network, fulfillment centers, and drayage fleet. He's seen firsthand how the traditional inbound model can break down when too many hands are involved and how a more consolidated strategic approach can change the game. Let's dig into how supply chain leaders should be rethinking inbound freight in today's environment. Ed, thank you very much for being on the show today. It's great to have you here. Thank you. Now you've been with Averitt for twenty one years now, and you've been at the forefront of the historical development of distribution and fulfillment. Could you kind of walk me through that and tell us, give us a quick overview of what, Averitt distribution and fulfillment actually is? Sure. So, first of all, thanks for having me. It's a it's a pleasure being here with you and and the opportunity to share a story about our fifth vertical is always exciting for me. So the opportunity just to to rave about it's always always a plus. The best thing about that I could tell you from a history standpoint of distribution and fulfillment, we started doing this in multiple regions over the years, and we were just kinda, you know, dipping our toe in the water to see what our customers needed and all these wonderful things. But then as we started to grow from a port side standpoint, warehousing became synonymous. It was a time for us to really put those two together. So we built our first hybrid facility in Charleston, South Carolina. And back in two thousand seventeen, we opened that building, and we had the ability to service our customers at all levels. So So it was a Dre, a transload, and then a warehouse, full full blown distribution. We even opened up our first ecommerce customer direct to consumer through there, which is very exciting at the time. And little did we know it, you know, markets like Charlotte had a warehouse already where we were doing multiple things for multiple customers, but we never really had everything under one umbrella until we brought it to the executive team. We created distribution and fulfillment, and it was started in in its inception with Eddie Atkins. What a great Averitt associate for so many years and missed greatly. But at that point in time, we had to switch gears and decide how do we how do we put this under one fold. And it came under our group as a port side distribution and fulfillment, and our team started to run with it. Built SOPs, and before you knew it, we were up and running in Nashville and then Atlanta and then Dallas and then so on. And here we are now with three million plus square feet across the platform and continuing to grow and learn every day. Well, for those that might not be familiar with port side, what what is that? So port side is simply our offering that we started back in it was twenty one years ago now, at least, that we started a port side offering. And the port side simply meant that any cargo coming into any port, whether it was an inland port or whether it was a port along the seaboards, we could handle them within our footprint. And and that gave us flexibility for our customers to bring in import business into our facilities. We would typically transload that, move it out on our truckload division, start engaging other verticals. And before you know it, that grew. And typical Avery fashion, we decided to do it really well. We offered it to the to the customer service base for everyone to have, and it took off. So here we are again. Want just another piece of that vertical growing and offering things to our customers. That's great. And it's, been an incredible growth for distribution and fulfillment over the years. So it's been wonderful seeing how it's evolved with, we've got facilities by the major ports on the sea, we've got them inland, and we've even got them along the border. This is correct. It just shows the true testament to our ability to be nimble. You never know where a customer's gonna need us, so let's have a infrastructure and a plan in place. So when they do, we're the first ones on the spot to help. Yeah. Well, speaking about, inbound cargo supply chains, you know, we live in a quite tumultuous time right now. And so there's a lot of shippers that are trying to rethink their strategies, figure out ways to save costs, and get more efficient. Given the nature of the times we're in right now, what would be your advice to individuals looking to rethink their strategy? So, you know, there's there's really three things that you can think about when you start looking at the times we're in currently, and we've been through these before. It's just been different times, different errors, different ages, even even different inflections of what we're dealing with currently. So, definitely draw on your experience. But one of the things that really comes first and foremost, what I see people do fourth quarter last year into the first quarter of this year and even a little bit further, they were they've been planning ahead. That inbound cargo has been rushed into the US prior to tariffs hitting. Now you have inventory sitting at the same old rates that you were currently enjoying as a as a BCO. And and it really had the opportunities to to for them to say, let's stage inventory where we need it, and then let's see how the tariffs roll out. So it's a that's a very forward thinking way of looking at it. You also have to continue to look at where your product's being sourced. That's the second big thing. Do you do you have to continue to move it from China or Vietnam or Pakistan or Mexico as we even heard? Where how how do you move it to to avoid tariffs in certain situations? And the other side of that coin is, are we really trying to force more manufacturing back into the US? And then your distribution model is much easier. Correct? Source it right here in the US and move it all and build it, move it wherever you need it, direct in to your consumer. And that's always been good. And then the last thing that I think people need to understand in times like now is, it's a it's a famous saying that we've always heard. You hear it in many different levels of your life. Be patient. This too shall pass. Let's see where it goes. We have a lot of our customers that are reevaluating their supply chains today and saying, maybe we should hold off shipping for the next two, three, four weeks and determine where we go from here. But I think all those three things are a key to success for inbound cargo. Well, what are some of the critical area areas in the supply chain right now that you think shippers could take the opportunity to make some drastic improvements upon? Well, I think the opportunity right now for for all shippers is to to reimagine your supply chain and determine who the best fit as a partner is. So when you have someone like Averitt that has all five verticals that they can offer. So literally, from an inbound standpoint, no matter where your cargo is being sourced, Averitt has every functionality in the supply chain that we can offer. So if you look at Integrated on the international side that can bring in a container, that's that's wonderful. Gets it over the seas, brings it in the web report you wanna angle it into. And then from there, we start picking up distribution fulfillment and port side. Grabs it, determines where you wanna take it. And at that point, you can either bring it to our facilities and we can distribute it, we can transload it, or we can do direct drive to your facility. Any of these things work. But, again, that's two of the first legs that you really need on an inbound cargo side of things. Once once you move that product inward and you wanna get it out to the to the customers, you start engaging LTL. You're back into integrated if you need, expedited services. And then there are customers out there large enough to the to this day and point that come in our distribution facilities, and we feed our dedicated team that moves this product to just to them all day every day. So I I think that is valuable when things are tumultuous. A company like Averitt stabilizes your supply chain and makes it to where you almost have no worries. If you start piece mailing those things together, then that's where the the that's where it weakens the chink in the armor. Because right then, you start to have gaps, whether it's communication gaps, visibility gaps. And I think for a customer, gaps mean fear. It says to them, oh my goodness. I can't see something or I don't understand what's happening with it right now, and where is my actual inventory? And I think we fill all the gaps. We keep it seamless, and you lay your head down on your pillow at night better knowing where your inventory and your cargo is. Well, twenty twenty five has been off to an interesting start. There's been fluctuating tariffs across the board. One day it's this, one day it's that. And I know that gives a lot of shippers apprehension on what they need to be doing right now and in the future. It's that moving their supply chain elsewhere. But those are really big decisions and big moves. So what practical advice do would you give to a individual today? So the first thing well, I can touch on it again, and that is patience, the ability to wait and understand exactly what the market's going to do. A knee jerk reaction can often lead to tumultuous time within your own company. So why have that ripple effect? Right? If you look at Averitt's fifty four soon to be fifty four year history, we've been very patient as a company. And and sometimes that that patience looks like you're stalling or looking for an answer when actually you're finding the best path. And to me, that's that's super interesting for all of our our cargo owners as well. As these tariffs come out every day, it changes when they're going to hit, how long they're gonna be here, what the percentages are, what lane they're coming from. It it's it's just too volatile right now to make large changes. The best thing to do is stay the course and, again, find a partner that offers stability, that has all the services that you need, and is a true value when you start asking the questions. And for me, that's that that's the key to Averitt. We're we're we're we're not just a company that talks about trucking. We're we're a company that actually offers solutions to our customers about their entire supply chain. That's a huge statement to make as a as a company, in my opinion. It puts us in the forefront of being someone's sounding board when things get the way they are right now. And and the other side of that coin is when you demonstrate that level of commitment to the partnership in your in your customers, they come to you. When they start looking around the room going, hey. Who do we need to talk to about what's happening in the marketplace, how to get the inventory to our customers, speed to market when it's tumultuous and the seas are rocky, literally, they come to Averitt and say, well, let's go talk to them. Let let's see what their take is on this. We constantly have our our, our ears to the ground trying to figure out what's coming next. We stay in touch with everyone that we know within the marketplace. So whether that's, our ports our relationship with our ports are wonderful. They know before we do what the beneficial cargo owners are gonna do. They hear what the bookings are. They understand what's coming next. And and they give us a playbook that really helps our customers understand this is where we go next, and they were telling us how to get there. Well, thank you very much. I really appreciate you, Ed. Thank you. Appreciate it, Joe.