Physical Distribution Intermediaries Thrive in Global Economy

With branded product manufacturers focusing more on product innovation, and downstream mega-retailers returning to their merchandising roots, a new window of opportunity has opened for best-in-class wholesale (physical) distribution intermediaries.

In fact, the rapid growth of overseas suppliers to growing U.S. markets has been a major boon to independent wholesale distribution companies that once regarded themselves simply as small warehouse and distribution businesses. Three small to medium-size companies in particular are on the cutting edge of technological and social trends, from Internet commerce to evolving Latino markets, writes the NYT's James Flanigan:

• Weber Distribution has 11 warehouses in three states, 500 employees and more than $120 million in revenue distributing products that come mainly from Asia through the enormous Southern California ports. The company invested heavily in computing and communications systems, and gives clients information about products all the way from factories in China, on ships across the Pacific and through the ports of Los Angeles to final delivery. In its warehouses, forklift operators now use personal digital assistants to keep track of goods stacked on shelves several stories high.
  
• CaseStack has 320 employees and will bring in $74 million in revenue this year through its network of half a dozen warehouses and 1,000 independent trucking firms, linked by the Internet, and transporting goods from manufacturers to retailers nationwide.
  
• Source Logistics helps food companies in Latin America gain access to supermarkets and specialty stores in the United States through its warehouses and distribution centers in Texas and Georgia. It has 50 employees, $7 million in annual revenue and serves 80 companies in Latin America.

And economist John Husing has said that at $900 billion in annual revenue, logistics now accounts for some four million jobs nationwide and it is the largest single source of employment in Southern California.