Supply-chain management company offers fulfillment center capabilities

LATHROP—Many smaller companies need the capabilities of a large-scale fulfillment distribution center, but don’t have the space or capital of Amazon or other mega-shippers. Many supply-chain management companies help with business conundrum.

One company with local centers just might have the ecommerce solution for many valley businesses without resources.

Dearborn, Michigan-based Hollingsworth is an end-to-end supply chain management company with 28 distribution facilities located throughout the U.S. and two such locations in Tracy and Lathrop.

In 1991, Hollingsworth began by shipping parts for the Ford Motor Company, a relationship that continues to this day. They are the primary packager for the automotive giant.

By taking on multiple clients, Hollingsworth is able to parse out warehouse space, bringing shipping costs down.

“In the Lathrop area we are very much focused on ecommerce and retail and direct-to-consumer,” said Brian Sheehan, sales and marketing manager for Hollingsworth in this region. “We have local companies and companies that are overseas. It depends on the port of entry for their goods.”

Sheehan said many of their customers are manufacturers, and multiple facilities may be used for one client. Increased facilities also helps Hollingsworth offer same day shipping on behalf of its clients to most areas.

“In a shared warehouse, there’s shared costs,” Sheehan said, allowing for the cost savings to be passed onto the client.

Hollingsworth offers solutions to warehousing, fulfillment, packaging, inventory and program management and more, allowing those who use their services to scale their businesses easily without the hassle of dealing with expansion costs.

With the holiday season estimated to be the peak time for sales, Hollingsworth is preparing for the increased traffic. It’s estimated that the holiday rush accounts for 30 percent of annual sales for many retailers.

A new industry is beginning to thrive in rural America, with Amazon leading the way

By Paayal Zaveri | Aditi Roy
CNCB

The city of Tracy, California, is flanked by clusters of warehouses on its east and west sides. The names on the buildings are familiar: Amazon, Costco, FedEx, Safeway, Crate and Barrel and others.

Located in California’s Central Valley, Tracy’s proximity to the San Francisco Bay Area has turned it into a prime spot for distribution hubs, and it’s not alone.

With the boom in e-commerce and online shopping, companies have flocked to areas like the Central Valley, the Lehigh Valley in Pennsylvania, central New Jersey and Dallas, Texas, to build their distribution and fulfillment centers. All these regions are close to major metropolitan areas and major roadways. For the residents of these regions, it means new job opportunities as an entire industry around e-commerce takes shape.

Tracy Mayor Robert Rickman said the benefits of this boom are widespread.

“The people who come to our jobs here in Tracy are not just from Tracy, but all throughout the region, and it increases our daytime population and in turn attracts other businesses here – restaurants, retail and commercial,” Rickman said. “It’s a trickling effect.”

Tracy is close to major highways, the Port of Oakland and a nearby airport, making it an ideal location for e-commerce facilities, Rickman said. “The distribution centers and fulfillment centers can ship their goods pretty much anywhere from here in a very short amount of time.”

Over the last five years, fulfillment and distribution centers have created about 10,000 new jobs in San Joaquin County, according to research from Dr. Jeffrey Michael at the University of the Pacific’s Center for Business and Policy Research. In the past, agriculture and food manufacturing were Tracy’s main industries.

City officials expect the growth in fulfillment jobs to continue, largely led by Amazon.

Amazon’s plan to create 100,000 new jobs over the next year has a tangible impact in Tracy; a second Amazon fulfillment center is currently under construction. The existing facility is the largest in California and also runs a management training program, creating some management level positions.

These new centers are much different than traditional warehouses, and require much more manpower, said Richard H. Thompson of JLL, a commercial real estate firm. Jobs here often offer better pay and require more technical skills than more traditional jobs in warehousing and distribution since more precision is needed to meet customers’ orders versus large bulk orders.

An Amazon fulfillment center in Tracy, California

An Amazon fulfillment center in Tracy, California

Don Cunningham, the President & CEO of the Lehigh Valley Economic Development Corporation, says average pay for a fulfillment job in cities in Pennsylvania’s Lehigh Valley is about $15 per hour, much higher than retail or fast food jobs in the region. “This new industry requires a lot of labor right now,” he said.

The economic benefits are pouring into the cities as well. In Tracy, sales tax revenues went up 35 percent, helping the city build parks and improve infrastructure. Large warehouses like Amazon and Walmart also generate a lot of property tax revenue for the cities they’re located in, said John Boyd of The Boyd Company.

Tracy’s not alone. Fresno, another city in the Central Valley of California, has gotten more requests from companies wanting to set up facilities in the last two years than over the past 10 years combined, according to Lee Ann Eager from the Fresno Economic Development Corporation.

“It’s putting thousands of people to work who are either unemployed or underemployed,” she said. “It’s essentially a new industry for people in this region.”

Ulta bringing part of its billion-dollar business to Fresno

Central California

The Fresno Bee
BY TIM SHEEHAN
PUBLISHED MARCH 10, 2017

Ulta Beauty and the city of Fresno officially announced Friday that the cosmetics company has chosen Fresno as the site of a large distribution center that will initially employ more than 500 workers and could swell to more than 1,000 employees with seasonal hires during busy periods.

The joint statement issued by the company and the city confirmed what The Bee reported Tuesday about Ulta’s selection of Fresno for a 670,500-square-foot warehouse to be built in south Fresno. Carolyn Sutphen, a spokeswoman for Ulta, said the distribution center is expected to hire an initial workforce of 542 when it opens in the summer of 2018. It will be built at the northwest corner of East and Central avenues.

Ulta is a growing business that last year reported net sales of $4.8 billion.

The company had identified Fresno last fall as its preferred site, but Ulta representatives told the state in November that the firm was also considering sites in Visalia, Bakersfield, Nevada and Utah. The $110 million distribution center will serve 400 stores and handle fulfillment of online orders from throughout the western United States. Ulta has five other distribution centers in Illinois, Arizona, Pennsylvania, Indiana and Texas. The Fresno center will be Ulta’s first and only one in California.

“This is exactly the shot in the arm that Fresno needs to energize our economy and keep our momentum headed in a positive direction,” Fresno Mayor Lee Brand said in the joint statement. “We’re pleased that Ulta Beauty recognizes the value of our location. …”

As a city councilman last year, Brand was the author of the city’s Economic Expansion Act, which provides for rebates of sales and property taxes, along with other incentives, for companies that relocate to or expand in the city to create new jobs for local residents. In November, working under Brand’s act, the Fresno City Council approved a 30-year package of incentives – chiefly a partial rebate of sales taxes – worth up to $18 million to attract Ulta. To qualify for the city’s incentives, Ulta must create the equivalent of at least 500 full-time jobs at the Fresno center within five years. If the company fails to achieve that by the end of 2022, it would have to repay whatever rebates it had received to that point.

Also in November, the Governor’s Office of Business and Economic Development agreed to provide $8 million in California Competes tax credits to Ulta if it chose a site in California, conditioned on the net creation of 542 full-time jobs in the state.

An economic analysis of the Ulta project that was commissioned by the city last year estimated that Fresno stands to realize about $42 million in additional sales and property tax revenue, even after the incentives.

Ulta, based in Illinois, has almost 980 stores in 48 states; in the Valley, the company has two stores in Fresno and one each in Clovis, Visalia, Hanford and Porterville.

“We are pleased to be expanding in Fresno with a new distribution center that supports our company’s growth strategy and brings additional jobs to the community,” Ulta CEO Mary Dillon said in the joint statement. “This will allow us to continue to grow our stores and e-commerce business. …”

Sutphen, the Ulta spokeswoman, said the company will begin posting job openings on its website closer to the completion and opening date.

Company growing

In its financial results released Thursday for the fourth quarter of 2016, Ulta announced that its sales – both in-store and online – have been growing at a significant clip. The company reported more than $1.58 billion in net sales during the quarter, up almost 25 percent compared with the fourth quarter of 2015. Its e-commerce sales grew even faster, up more than 63 percent compared with a year earlier and amounting to $154.9 million for the quarter. For the entire year, online orders represented $345.3 million in sales for Ulta.

While the city and Ulta waited until Friday to make the formal announcement, the company’s choice wasn’t exactly top secret. Clayco, the Chicago-based contractor that will build the distribution center, already has a construction office on the site, and renderings on the company’s website identified Ulta as the tenant for the building. Clayco’s website indicates that construction is expected to be done by the end of 2017.

Additionally, the careers page of Ulta’s website included a job opening for a human resources director for the Fresno distribution center.

Ulta isn’t the only potential big fish for which the city has baited its economic hook. In December, a month after approving the enticements for Ulta, the Fresno City Council approved a similar Economic Expansion Act package of incentives for Golden State FC LLC, a wholly owned subsidiary of online retail giant Amazon.com. That package of incentives, including rebates of sales and property taxes, has a cap of $30 million over 30 years.

Larry Westerlund, the city’s economic development director, said Amazon deemed Fresno its preferred site for a $200 million, 855,000-square-foot e-commerce fulfillment center that would employ at least 750 workers and potentially hire up to 1,750 employees. There is, however, no word on when Amazon may make a decision on the location.

Brand traveled to Seattle late last week to meet with Amazon officials to pitch the Fresno site. The would-be location for that facility is less than a half mile from the Ulta site, in the North Pointe Business Park near Central and Orange avenues, and was formerly under consideration last year by clothing retailer Nordstrom for a distribution center. Nordstrom has put on hold any decision on a center in the Valley.

CT Realty Acquires 345-Acre Industrial Parcel in Stockton, Plans $135MM Build Out

Central California

The Registry
Posted on

CT Realty (CT) has acquired 345 acres of industrial land within the master-planned NorCal Logistics Center in Stockton, Calif., with plans to develop 4.4 million square feet of high-clearance distribution, e-commerce/logistics and advanced manufacturing buildings. The project, which breaks ground this month, includes an unprecedented amount of speculative construction for Northern California.

Valued at $135 million, the first phase of development includes approximately 1.7 million square feet in three buildings, including a 1,122,341-square-foot building that will be the single largest spec building developed in Northern California. Two additional buildings of 388,183 square feet and 186,944 square feet will complete Phase 1. Beyond the planned development, NorCal Logistics Center has sites available for build-to-suit developments ranging in size from 100,000 square feet to more than 1.9 million square feet.

“We view this as a long-term development opportunity to assemble a world-class logistics campus in one of the strongest markets in America,” said Carter Ewing, managing partner of CT Realty. “The dynamics of California’s Central Valley region, with an industrial base of more than 185 million square feet, mirror the favorable activity we have encountered over the last three years in Southern California and other major distribution markets in Dallas, Atlanta and Chicago.”

NorCal Logistics Center, which is already home to General Mills, Fresh & Easy and Fox Head, is located in the heart of California’s Central Valley industrial market and serves an extension of the global logistics supply chain infrastructure directly linked to West Coast ports in Oakland/Stockton, Los Angeles/Long Beach, Portland, Ore., and Seattle/Tacoma, Wash. The project is proximate to key intermodal facilities operated by Burlington Northern Santa Fe and Union Pacific railroads, and is accessible to SR-99, I-5, I-205 and I-580, linking to all major Northern California markets and strategic Western U.S. destinations.

“The evolution of modern logistics infrastructure, including inland ports, sea ports and commercial rail systems, has changed the dynamics of how containerized cargo is distributed nationwide and throughout the world,” added Ewing. “Investing in buildings that are strategically located near this infrastructure is integral to meeting the demands of today’s most progressive logistics users, and this is at the heart of our national strategy. The locational attributes of NorCal Logistics Center give us confidence that this will become one of the premier master planned logistics parks in the entire Northern California market,” added Ewing.

CT and related development partnerships are developing speculative and build-to-suit Class A logistics buildings for some of the largest industrial users in America. The company has acquired or developed 7 million square feet of industrial buildings in the U.S. over the last 36 months, experiencing strong leasing activity from projects that have been well received in their respective markets.

“NorCal Logistics Center represents the calculated expansion of an industrial logistics strategy we began implementing aggressively across the country five years ago,” said J.C. “Watty” Watson, managing partner of CT.

CT has capitalized much of its acquisition and development activity with Diamond Realty Investments (DRI) the U.S. real estate investment arm of Japan-based Mitsubishi Corporation. Both DRI and CT have 25-year histories in development and investment.

“We are delighted to again combine forces with DRI in this exciting new venture,” added Watson. “Together, we have almost 4 million square feet under construction and another 10 million square feet in our development pipeline on land that we own across America.”

The project is designed by Ware Malcomb, a premier architectural design firm with global experience in logistics and distribution facilities. Construction financing is provided by Cal Bank & Trust and Fifth Third Bank.

CT acquired the NorCal Logistics Center parcel from Arch Road, L.P., a partnership controlled by Minnesota-based Founders Properties and represented in the transaction by Darla Longo, Barbara Emmons Perrier, Rebecca Perlmutter, and Michael Kendall of CBRE National Partners. CT was represented by Cushman & Wakefield’s Kevin Dal Porto, Blake Rasmussen, John McManus and Tyler Vallenari, who will provide ongoing leasing, sales and market support services.