Supply chain and transportation giant Ryder (NYSE: R) announced on May 20 that the company is expanding its e-commerce fulfillment network with new FDA-certifications for food-grade capabilities, as well as adding facilities by utilizing its existing last-mile network.
Ryder, which provides commercial truck rental, truck leasing, used trucks for sale and last mile delivery services, has long operated large distribution facilities across multiple industry verticals. But a few years ago, the company surveyed the landscape and saw that many of its customers were looking for the ability to stock products in more strategically located, smaller warehouses to meet growing e-commerce demand.
“That’s how we started on the [e-fulfillment ] journey a few years back,” Steve Sensing, president of global supply chain solutions for Ryder, told FreightWaves.
As part of that evolution, Ryder also noticed it was missing opportunities around food-grade warehouses for its consumer and packaged goods (CPG) customers. Anticipating a growing need, Ryder started FDA-certification and implementation last year.
It is adding that capability to a new fulfillment center near Philadelphia, a 340,000-square-foot food-grade facility scheduled to begin the integration of automation technology this summer.
Ryder has also obtained FDA-certification for two other e-commerce fulfillment facilities near Los Angeles and Dallas, both of which originally opened in early 2019.
The coronavirus outbreak has only accelerated demand for e-commerce fulfillment, as consumers relying on online purchases for essential products more than ever and safety is now viewed as a primary concern for businesses, customers and employees.
“Some of the experts out there believe COVID-19 has expedited the interest and need of an ecommerce fulfillment capability by three years,” Sensing said. He thinks the coronavirus crisis has accelerated demand by as much as five years, with Ryder now seeing volumes triple across its e-fulfillment operations.
In addition to its e-commerce fulfillment network, Ryder is also utilizing existing locations within its Ryder Last Mile network, which had been reserved for big-and-bulky items.
“We saw a need in that industry a need for a non-conveyable item that was between a parcel and a big and bulky product that was not attractive to the parcel carriers,” Sensing said. Ryder “injected” that product into the last-mile and fulfillment networks, allowing the company to expand its online shopping fulfillment for parcels by 167%.
Reflecting on changes implemented since the outbreak started, Sensing said “the key piece there is having the flexibility and the ability to increase our resources. At the end of the day, serving end customers has been a big challenge and opportunity for us these past few months. I don’t see that slowing down.”