Tuesday, May 21, 2024

GXO Direct launches in UK with plans for future European expansion

Warehousing isn’t what it used to be. Today, vacancy rates are at historically low levels, and storing goods and materials is more expensive than ever.

GXO Logistics (NYSE: GXO), the contract logistics spinoff of XPO Logistics, is one of a number of firms aiming to provide U.S. and Canadian retailers with a lower cost alternative in the form of Direct, its shared warehousing solution. As things stand, the model is young but on the rise, with companies like GXO, Saltbox and ReadySpaces growing in popularity.

But the Greenwich, Connecticut-based contract logistics provider, which acquired the U.K.’s Clipper Logistics last May, put down new roots across the pond with the global expansion of Direct on Tuesday. With 30 facilities covering the entire U.K., the firm now boasts the most comprehensive shared space offering in the nation.

GXO told FreightWaves that the company is also planning a phased rollout to other European markets later this year, representing a massive expansion of the service.

“Now more than ever, businesses are looking for cost savings, flexibility and an experienced partner that will accelerate their growth, while delivering an exceptional customer experience,” said Bill Fraine, chief commercial officer of GXO. “Whether a startup or a blue chip, companies want capacity, technology and expertise to fuel growth while minimizing operating costs.”

GXO Direct’s low-cost shared warehouses offer “high-quality” space and technology to enable things like omnichannel fulfillment and returns management.

More specifically, the facilities offer on-demand warehouse capacity with “pay-as-you-grow” pricing that rises as space increases. The space and technology are shared with other customers, which keeps costs relatively low, while a returns management solution and refurbishment service combine to power reverse logistics capabilities.

Watch: Amazon allowing sellers to use warehouses

In the U.K., customers will have access to ClickLink, GXO’s click-and-collect next-day delivery service for B2B retailers. They’ll also be able to leverage the firm’s technical services, which specialize in reverse logistics for manufacturers and electronics retailers.

“By removing cost and complexity, we make everything simpler, serving as a one-stop shop providing all the space, value-added services and leading-edge technology that companies need to grow while exceeding their customers’ expectations,” said Clare Davies, the former deputy chief operating officer of Clipper who will head the new U.K. GXO Direct division.

In addition to improved fulfillment options, the ability to add shared warehousing space on a whim could allow retailers to offer a wider range of selling channels. 

For example, a brand with a single facility might struggle to fulfill e-commerce orders across the U.K. But if it could add additional capacity on the cheap, that opens the door to e-commerce sites, marketplace selling and a host of other channels.

Since launching in the U.S. in 2018, Direct has added millions of square feet of warehousing space each year. Now it’ll look to do the same in the U.K. — and soon, the rest of Europe.

Click for more FreightWaves articles by Jack Daleo.

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