As Americans hunkered down at home and repeatedly hit the “buy” button on their computers and phones, the need for warehouse space heated up. Online buying has continued into 2021 and looks to no longer be a gradual upward trend that was altering retail but rather a rocket ship that has quickly and dramatically changed shopping forever.
You can thank COVID-19 for that.
“The difference between 2021 and 2020 is the surprise factor,” Harry Drajpuch, CEO of Amware Fulfillment, told FreightWaves. “On the Amware side, we’re expecting the growth to not just be a [continuation] of the shallow curve where the industry had been growing 12% to 15% per year. … We expect to see the trend towards online buying continuing.”
Drajpuch said he’s seen some estimates predicting online shopping growth of as much as 25% in 2021, even while more brick-and-mortar stores reopen as COVID vaccines are distributed. “Some people will go back to retail [in-store] buying … but I think for the most part we’ve gotten conditioned [to shopping online],” he added.
Amware has been closely tracking these trends, and just before the end of 2020, it made a move to take advantage of these trends and open up new opportunities. The privately held company acquired Moulton Logistics, expanding its warehouse footprint to 15 facilities and over 2 million square feet nationwide.
The addition of Moulton’s four fulfillment centers – three in Los Angeles and one in South Brunswick, New Jersey – adds 500,000 square feet of space and enables one- to two-day ground delivery from an Amware facility to 95% of the U.S. population, the company said.
Terms were not disclosed. The deal was financed by Amware’s majority owner, Rotunda Capital Partners.
“They’ve seen explosive growth through the COVID period, as many of us have had. Part of the view on [acquiring] the Moulton business is not just what we bring to them, but what they bring to us.”
– Henry Drajpuch, CEO of Amware Fulfillment, on acquisition of Moulton Logisitcs
“We’re now one of America’s largest privately held national fulfillment companies,” Drajpuch said in a statement announcing the acquisition. “[This] will give Amware better access to capital to enhance services. Amware customers will benefit from an expanded facility network, greater volume leverage with carriers to lower parcel shipping rates and access to the significant operational expertise of the Moulton team, which has focused on B2C fulfillment services since 1968.”
Amware offers e-commerce fulfillment, direct sales fulfillment, retail/B2B logistics and marketing literature fulfillment. With the Moulton acquisition, it is adding call center capabilities. It focuses on health and wellness, consumer goods, food and beverage, industrial/raw materials and apparel logistics.
Drajpuch told FreightWaves Moulton provides new opportunities for Amware with the ability for both companies to grow their customer base and customized services.
“They’ve seen explosive growth through the COVID period, as many of us have had,” he said. “Part of the view on [acquiring] the Moulton business is not just what we bring to them, but what they bring to us.”
Moulton specializes in e-commerce and direct response marketing.
Moulton Logistics is best known for its involvement with direct response TV (DRTV) fulfillment for products sold via TV commercials and shows. Drajpuch said he is excited about the opportunity Moulton provides Amware to expand its direct response marketing (business to consumer) segment thanks to Moulton’s dominance in the shop-at-home category.
In addition to its four facilities, Moulton operates a call center that provides live phone support, live chat, email and social media communications.
“They’ve really done a nice job growing that business, and that business has morphed into e-commerce,” he said, noting that Moulton has been around since 1968 and began developing its direct response fulfillment business in the late 1980s and early 1990s. “Direct response and Moulton are [now] synonymous.”
Drajpuch said that Moulton is extremely good at handling “spikes in sales” and responding quickly, and that is something that could benefit Amware. Conversely, Amware’s scale will help Moulton better support its locations on the two coasts.
“We can leverage that East Coast operation and support it operationally. Plus they have a very nice parcel program and we pick up a very nice parcel spend,” Drajpuch said.
Moulton has approximately 300 employees between full-time and temporary workers. All current customers of Moulton will continue to be supported and all employees will continue with the company, Drajpuch said, noting that there will be no changes in the short term, although eventually the business will be folded into the Amware branding.
As for the rest of 2021, Drajpuch expects to see continued growth in the fulfillment space and as a result, Amware has been sitting down with its customers to review plans and ensure everyone is prepared for possible spikes.
“We’re a fast-growing, dynamic company and we’re well positioned to help consumer brands get products to market quickly,” he said, noting that the privately held company wants to maintain its friendly, communicative approach with customers. “As we are growing, we haven’t forgotten our roots to provide a customized solution. All of our customers have my phone number.”
Click for more FreightWaves articles by Brian Straight.
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