Riding the Wave: How Cadre helped FST Logistics Become an E-Commerce Leader
FST Logistics had a challenge, it just signed a new customer that needed a 3PL transportation and warehouse company to handle a high volume of e-commerce order fulfillment. The problem was, FST had no experience with B2C order fulfillment, yet committed to have e-commerce capabilities for their new customer up and running within six weeks.
While FST had never done high-volume fulfillment before, they were already using Cadence software from Cadre Technologies. One phone call later, and Cadre identified the need for FST to add Shipping Label Picking, a Cadence module designed to deliver fast fulfillment for e-commerce orders.
The software went live and that date is a milestone for FST. Fast forward two years and the company is running e-commerce fulfillment for eight customers. By late fall, that number increased by 50% to 12 customers. The company’s e-commerce division is proving to be an important component of their business, as it already represents 20% of total annual revenue.
“It’s our fastest-growing line of business, ever,” says Brad Wright, FST’s director of business development.
“We couldn’t be happier.”
1.5 Million Square Feet and Counting
Headquartered in Columbus, Ohio, FST Logistics specializes in transportation and warehouse management for food and beverage manufacturers. With five temperature-controlled warehouses in Columbus and a sixth in Indianapolis, the company markets itself as a one-stop shop that can handle warehouse fulfillment, truck transportation and freight shipping services throughout the U.S.
Right now, FST is enjoying its greatest growth spurt in its 27-year history. Since 2016, business has grown so much that the company had to double the square footage of its warehouse to the current total 1.5 million square feet. With revenue growing 12- 15% annually, the demand for warehouse space is likewise expected to increase in the coming years.
Wright traces their success back to a food show he attended in 2016, where he met the founders of a Chicago-based company that manufactured whole food protein bars. The young brand was intent on selling their products through their own website rather than going through Amazon where they’d fight for screen time with their competition and possibly deal with smaller margins. The founders told Wright that selling their product on their own website was not only a good way to ensure wider margins, but the best way to build brand loyalty.
Cadence Creates “Transformative” Change
At that pivotal point, the partnership of FST and Cadre Technologies was nearing its 10th anniversary. The relationship dates back to 2007 when FST first installed Cadre’s Accuplus WMS to help strengthen its 3PL capabilities. Soon enough, customer demands were increasing and FST needed software to handle higher volumes and multi-channel fulfillment distribution.
Two years later, in 2009, FST switched to Cadence WMS—Cadre’s software system offering greater capacity, particularly in RF-based mobile logistics, transportation and order management, and activity billing. But the standard Cadence WMS solution uses RF picking, which isn’t ideal in the e-commerce realm when as many as 8,000 orders can come flooding in per day. The solution was easy. By using Cadence’s Shipping Label Picking module with “Ship-IT™,” a multi-carrier product by Logistyx used by FST, the company could now incorporate wave processing for faster picking.
Catching a Wave
Waving is a value-added way to automate the grouping of orders by different criteria: date, store, shipping carrier, priority, etc. There are a number of reasons why waving is ideal for e-commerce orders. Since picking can become the most intensive labor activity in a warehouse, waving reduces the workload by consolidating each grouping, or “wave.” If there are multiple orders for Walmart, for example, waving helps group them into a single pick for shipping.
For FST, instead of picking orders one at a time throughout the warehouse all day long, all the workers need to do is produce a carrier-compliant label and packing list, apply both to the box, scan it and ship.
Suddenly, the company was able to get thousands of orders out the door in a single day. “It was transformative,” said Dan Ferris, FST’s senior IT application specialist.
Better yet, executives at the protein bar company were so pleased with the results, they told FST that it was a vast improvement over their former 3PL, which was always three or four days behind orders. “And now here we are pushing out 2,000 orders a day. Cadence gave us that advantage,” said Ferris.
Cadre had a professional services staff member onsite for a week. Installation “was seamless,” Ferris reports. The consultant walked FST workers through the new model until they had a full grasp of how it worked to their advantage. The ability to quickly have new warehouse workers understand and complete the orders with minimal training was very important for the spikes in volume that occur with order demand.
Even after Cadre personnel left Columbus, the company provided continuous support. When another customer told FST that they were expecting volume to grow the week of a site-wide sale, Cadre provided 24/7 tech support throughout that week to make sure the sale was a success without any technical interruptions.
“We were available the entire time. Our customer appreciated that,” said FST’s Brad Wright.
Setting the Company in a New Direction
The success FST had with fulfilling orders for the Chicago company was a boon for FST’s future growth. Word spread fast and soon FST was carving out a niche with young, high-growth natural and organic food companies from Santa Monica to Atlanta.
Their success with e-commerce also allowed FST to upsell its warehouse and transportation services. Suddenly, its dry, cooled, and freezer storage facilities were home to natural and organic food products that the company was also helping fly out the door every day. The added capacity is responsible for FST’s explosive growth: In 2013, FST had $61 million in revenue; by the end of 2018, it was projected to grow to just over $100 million.
Wright says Cadre helped FST reach those goals by “teaching us what we didn’t know. Before we were a warehouse company and did all the traditional things a warehouse company would do. Now, we’re hot and heavy into e-comm fulfillment. That’s a lot for a company to do in a short period of time, but we did it,” he said.
For Ferris, Cadre put FST into the front line of one of the fastest-growing food segments today. “They allowed us to grow in scale extremely quickly,” he said. “It’s a testament not only to Cadence, but also to Cadre’s people who proved they were great partners every step of the way.”
Incorporating wave techniques and Cadre’s Shipping Label Picking module for Cadence software helped turn FST’s initial problem into a huge success story, with more customers demanding more services and warehouse space every day.
Now that’s a good problem to have.