Considering COVID-19’s revolutionizing effect on consumer buying habits, it’s no surprise that e-commerce sales between the second quarter of 2019 and the second quarter of 2020 jumped from 10.8% to 16.1% of total national retail sales. For decades, e-commerce spending has shown about 1% growth each year, according to the U.S. Census Bureau. The significant leap from 2020, whether a new normal or a temporary, pandemic-inspired shift, is causing both shippers and logistics providers to quickly adjust to an ongoing tight capacity market.
To fulfill on-demand orders and increase available capacity, shippers are increasingly reliant on third-party logistics (3PL) providers, but sometimes, shippers learn the hard way that not all 3PLs are tailoring on-demand solutions to match their unique needs. While it’s easy to preach the gospel of visibility and technology investment to prospective customers, many providers aren’t actually delivering the solutions.
Olita, a California-based sun-care product company, saw 800% growth in its wholesale and direct-to-consumer business in 2020. While it had used the same 3PL for a few years, founder Laurie O’Hara decided that in light of her company’s recent growth, it was time to shop for a more reliable provider.
“With a 3PL, you get a warehouse and a fulfillment center so that they can take that off your plate. But the first 3PL I hired would ship out the wrong product and miss orders. The account would call and say, ‘Hey, where’s my order?’ I had to start micromanaging, and that’s something you just don’t want to do.”
In 2021, she partnered with ITF Group, a St. Louis-based, asset-based 3PL that offers total solutions with warehousing for shippers of all sizes. Experiencing rapid growth in warehouse space in the past two years, from 22,000 to almost a million square feet, ITF also owns 500 trucks and 1,500 trailers.
“Our robust fleet operations allows us to be competitive in a few different areas: retail, e-commerce and consumer packaged goods,” said Tim Breckenridge, vice president of business development at ITF Group, during a recent WHAT THE TRUCK?!? interview. “We really focus on tailored solutions. What works for one guy may not work for the next, so we don’t want to sell a solution that works best for us. We want to sell something that works best for that customer specifically.”
To tackle this bull market, ITF’s recent strategy is adding automation to distribution and fulfillment, which in turn adds visibility to each customer’s inventory, large or small. Companies like Olita will get photos of inbound and outbound product sitting in inventory. O’Hara said that ITF has been diligent about inventory count and has even taken over the inventory of her Amazon business.
“Everything ships out immediately,” said O’Hara. “I don’t have customer complaints about getting the wrong or damaged product. This is finally a company that allows me to get back to doing so many other things that I need to do as a founder and CEO of a small company.”
With the support of ITF, Olita is beginning to stock product with bigger wholesale accounts, larger grocers and box stores. Olita is releasing two new organic sunscreens and making moves toward international shipping. Because ITF works with much larger customers, O’Hara is confident that as Olita grows over the next few years, ITF will be able to keep up with the volume of both direct-to-consumer and wholesale growth, and minimize the costly dark side of e-commerce: reverse logistics.
“ITF has been very sensitive and flexible with the small business pain point,” said O’Hara. “When I started searching for a new 3PL, many companies said we were too small for them. I would go as far as to say they’ve been a partner and not just a vendor that I contract with who I can call anytime. They’re so responsive, and it has been such a relief to work with them.”