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Radial Looks to Build on a Year of Frantic Logistics Growth

Radial Looks to Build on a Year of Frantic Logistics Growth

Radial employees at a fulfillment center in Rialto, Calif. The workers wear wireless badges that alert when people get within 6 feet of one ano

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Radial employees at a fulfillment center in Rialto, Calif. The workers wear wireless badges that alert when people get within 6 feet of one another to help maintain social distancing.

Photo: Radial Inc.

E-commerce logistics provider Radial Inc. has notched big gains during the coronavirus pandemic, which triggered surging online order volumes while presenting new challenges as the company hustled to meet the sudden rush in demand.

New Chief Executive Ilias Simpson is taking what Radial learned from this singular year as it looks to 2021, when the fulfillment and software business aims to expand further and double down on the technology that helped retail customers such as Cole Haan, Ashley Stewart and Payless Shoe Source Inc. cope with the upheaval.

“We were early adopters of things like curbside pickup and buy online, pickup in store,” Mr. Simpson said in an interview. “People thought we were crazy when we were doing those things years ago, and here we are in a situation now where that’s people’s lifeline for getting the products that they need.”

Based in King of Prussia, Pa., Radial operates 21 online fulfillment centers in North America and provides e-commerce technology such as order-management software.

The company generated $261.8 million in North American revenue in the third quarter, up 34.1% from the previous year. As of September 2020, Radial North America had more than $1 billion in new business year-to-date measured by total contract value, compared with $385 million in 2019.

In an already challenging year, Radial was the target of a cyberattack in October that temporarily hampered fulfillment operations.

In December, Mr. Simpson, who is 38, was appointed CEO of Radial and the North American division of parcels and logistics for Belgium’s bpost SA, which acquired Radial in 2017. He earlier led Radial’s nationwide operations for fulfillment centers, network optimization and other efforts.

Mr. Simpson will lead an expansion effort focused on digital services and on retailers and direct-to-consumer brands looking to scale up their logistics as they grow.

Mr. Simpson spoke with The Wall Street Journal on the company’s plan. Following are edited excerpts:

WSJ: How did Radial’s experiences during the pandemic shape plans for the coming year?

Mr. Simpson: Covid moved e-commerce forward, you know, five, eight years, from where people expected it to be.

The key moving forward is that e-commerce is just going to become a bigger part of all of our clients’ business. For some of our clients, it’s now their only channel for their business. And so we’ve become an even more critical partner.

Definitely we think the name of the game is going to be how well you can adapt and how flexible you can be and how quickly you can scale.

WSJ: Tell me what those first few months of the pandemic were like at Radial.

Mr. Simpson: When the pandemic first hit, there was uncertainty for everyone….But consumers continued to shop. And so their only channel was to shop online. And so we literally saw peak level volumes starting to hit our facilities.

And it wasn’t like a one-weekend spike. I mean, it was sustained, increased volume over a long period of time.

In Q2, we saw over 50% growth (in orders) year over year….We were carrying significantly more seasonal associates than we typically would. We had to quickly move to a work-from-home model for our call centers, and our customer-care team.

Ilias Simpson, chief executive officer of Radial Inc.

Photo: Radial

Because of what we saw in March and April, we basically have been busy all year long. So when the holiday peak got here, it wasn’t the typical, all of a sudden zero to 100 (miles an hour), right? It was more like 75 to 100 because we were already running so fast due to the Covid impact.

WSJ: How did Radial use technology and automation to increase and meet that demand?

Mr. Simpson: We were able to leverage some of our ROM (Radial Order Management) software…to set up some quick pop-up facilities for existing customers.

We went from past years when we would do two, three pop-ups a year, to this year, we had over 12 pop-ups planned for our customers.

Doing a warehouse within a warehouse on an ad hoc basis, putting key inventory in a specific location to fulfill high volume orders, or high volume SKU (stock-keeping units) for our customers.

We were partnering with Locus Robotics, so we were able to scale that and we went to implement over 200 additional robots…in the Kentucky market.

It was really a combination of automation, software and physical fulfillment scalability.

WSJ: Any other examples from the fulfillment side?

Mr. Simpson: We did the Instant-Trace badges that alerted people when they were within 6 feet of one another.

Those are tracking people’s activity to see kind of how they’re following social distancing. But we could also just see what people were doing in general.

There were lessons learned….Why are people having to take so many steps? Or why are people having to go back and forth so many times?

It led to us figuring out where people had waste in their day and restructuring our environment, or adapting our processes to eliminate the amount of movement people had to do.

WSJ: Bpost has said it wants to optimize Radial to deliver in the U.S. e-commerce market, including targeting smaller brands. What will that look like?

Mr. Simpson: We have very ambitious growth plans for Radial North America. And then we want to expand in Europe as well, and we want to leverage our expertise and our size in North America and our customer relationships to help us grow globally.

We’ve worked with large retailers, Fortune 500 brands, as well as emerging brands, from the beginning. But a focus for us is continuing to work with those emerging brands. We definitely feel like a sweet spot for us is finding those brands who are direct-to-consumer, who are looking to grow, and we can help them scale.

WSJ: How do the holidays look to you? There’s been a lot of talk about “Shipageddon” due to tight shipping capacity just as the Covid-19 vaccine rollout was launching.

Mr. Simpson: We were able to get in front of it. Working with our clients, that’s where demand shaping came into play, as well as making sure that they understood what capacity looked like with the carriers.

It’s not egregious. It’s nothing where things are taking twice as long (to ship). I would say in most cases, it’s maybe a day at most.

WSJ: How does Radial view the growing competition from digitally oriented companies such as ShipBob Inc. or Shopify Inc., which is also getting into fulfillment?

Mr. Simpson: We definitely keep an eye on it. Obviously we are aware of what Shopify is doing and others are doing, but, we also feel that we’re the best. I mean, we’ve been in this business for a while.

Of course we’re going to continue to adapt our strategies as well. We’re exploring more of the micro fulfillment and things like that.

But we also know what we do best and we want to continue to grow and focus on that.

More From Logistics Report

Write to Jennifer Smith at [email protected]

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

This post first appeared on wsj.com

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