Today’s retailers are striving to get goods to the market quickly, and a growing number of shippers are turning to regional distribution centers (DCs) to ensure goods are closer to the consumer and can be picked and packed rapidly. The regional DCs also help companies avoid supply chain disruptions due to natural disasters or other unexpected events.
Rick Blasgen, president of the Council of Supply Chain Management Professionals, said today’s shipping networks are becoming much more fluid with the advent of third-party logistics providers. With more DCs available and networked across the country, shippers can ensure they’re never out of product, he said.
E-commerce has been one of the primary drivers of regional DCs. Online retailer Amazon.com has several regional DCs throughout the country and is continuing to grow its network.
Regional DCs also lend themselves well to perishable products, which is one of several reasons Dunkin’ Donuts relies on regional DCs to supply its locations.
Blasgen said companies’ transportation networks are driving the locations of their regional distribution centers. “You put your DCs where there are lower labor costs and access to highways,” he said.
In addition to highway transportation, companies often look at rail accessibility when determining a site location for a DC. The expansion of the Panama Canal, which is scheduled to be complete next year, may also shape where companies place their future DC sites.
Photo Credit: Ira Wexler/NATSO
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