The red-hot logistics real estate market has some new capacity this week as Stord announced Thursday it has added new warehouse capacity in three key markets.
The “port-to-porch” logistics firm has added 780,000 square feet of space combined in Las Vegas and Reno, Nevada, and in New Haven, Connecticut. Stord co-founder and CEO Sean Henry told Modern Shipper the markets are part of Stord’s six-node first-party fulfillment network, which also includes Atlanta, Chicago and Dallas. Combined with over 1,000 partner facilities, Stord is able to reach 99% of U.S. consumers in two days or less via ground shipping.
“Our vision is to make best-in-class logistics a plug-and-play, scalable utility for brands.,” Henry said. “We’re leading a paradigm shift from disparate and disconnected supply chain operations to cloud supply chain, much like how cloud computing disrupted the slow and cumbersome build-it-yourself enterprise IT strategy.”
Henry noted that with warehouse space so tight – real estate investment trust company Prologis estimates warehouse vacancies are under 4% in the U.S. – Stord has been lucky to secure additional space in these locations.
“These are tight markets and industrial real estate is very challenging across the U.S.,” he said. “We are at capacity or quickly approaching capacity at other locations. We are very fortunate to have this capacity. If you talk to most brokers today, you will find there is nothing available.”
The cloud-based supply chain
Stord provides an end-to-end solution for shippers through a cloud-based platform connected to warehouses and carriers. The company offers national warehouse capacity, digital freight shipping, an integrated logistics network and two-day fulfillment for e-commerce orders from anywhere in the U.S.
The new spaces will be comingled locations, Henry noted, and much of that is already accounted for. Stord said it has only about 75,000 square feet remaining to be filled in Reno, 240,000 in Las Vegas and about 50,000 in New Haven.
Robotics and automation will be added to the locations, which were empty spaces before Stord took control.
“For this vision to be possible, Stord must be ahead of the curve with capacity and able to meet customer needs, even when capacity is sparse,” Henry said. “These strategic investments ensure that we remain ahead and capable of fulfilling our vision of cloud supply chain.”
The announcement of new warehouse capacity comes just a week after reports emerged that Stord had laid off 59 people from its national employment base of more than 700.
“Stord made the decision to exit 59 people across several business units earlier this month as part of a routine review of its 700-plus employees across all departments. While this was a challenging decision, the company remains in an incredibly strong position as brands continue to invest in the technology and logistics solutions they need to meet customer expectations and fuel growth,” a company spokesperson said, adding that the company remains well funded and continues to hire “strategically across the company to ensure our continued growth trajectory.”
In May, Stord announced the closing of a $210 million series D funding round with a final installment of $120 million. The first part of the round, $90 million, was announced in September 2021. The May funding was led by Franklin Templeton. The entire series D included participation from new investors Sozo Ventures, Strike Capital and 137 Ventures, along with existing investors Kleiner Perkins, Founders Fund, Bond, Susa Ventures, Dynamo Ventures, Lux Capital and Salesforce Ventures.
The series D placed a $1.3 billion valuation on the company.
“Stord is an incredible company with record growth and impressive business fundamentals,” Santosh Sankar, co-founder and managing partner of Dynamo Ventures said in a statement. “Parting ways with colleagues is hard, but Stord is in a strong position and continues to make the right investments for sustainable success. Brands need Stord to help improve their supply chains, particularly as we head into the busiest shopping season of the year and demand for their services only continues to grow. Our team remains confident in Stord’s ability to execute and become one of the great companies of our day.”
A healthy market emerges
Layoffs in the logistics tech space are accelerating in 2022 as investors grow concerned about the future prospects for companies amid record inflation. Still, Henry sees a healthy market for the flex warehouse and fulfillment services Stord offers.
“We have existing clients that will have expansion into these markets or locations and we have a lot of new (business) in the pipeline,” he said.
The volatility of the past two years has created a perfect storm for warehouse logistics and capacity, but even as fears percolate about an economic recession, the tight market should be positioned to weather any downturn, Henry said.
“It’s what led a lot of shippers (to) embracing our agile and flexible supply chain approach,” Henry said. “We’re really excited about the rest of the year overall.”
Henry noted that Stord has seen record demand for its services so far in 2022. Many large retailers have leveraged the company’s services as they have learned to balance in-store and e-commerce inventory needs. Reports have indicated that many retailers – Target and Amazon notably – overbought inventory that is contributing to the lack of available space. A drop in inventories could help the market “return to normal” and could be a “net positive for the market,” Henry said.