Distribution Centers are Closing Across the US: Start Recruiting Now!

As pandemic-related supply chain struggles begin to normalize, many large retailers are cutting back on their distribution networks. This recent WSJ Article addresses Amazon, Walmart, and Big Lots closings that could provide valuable hiring opportunities to HARDI members in those areas.

Walmart announced several WARN (Worker Adjustment and Retraining Notification) notices to several fulfillment centers in Pedricktown, NJ; Fort Worth, TX; Chino, CA; Davenport, FL and Bethlehem, PA. Workers at these locations have 90 days to apply to other locations within the company but also have the opportunity to find new employment.

Amazon is also continuing its supply chain restructuring by closing more warehouses and distribution centers continuing through 2023. Below is a map of all 31 recently closed locations which may provide a similar hiring opportunity to HVAC distributors in these locations.

Big Lots announced the closing and leaseback of 4 distribution centers, including two of their largest in Apple Valley, CA and their Columbus, OH headquarters location. This decision for Big Lots is driven largely in part by poor Q1 performance caused by the abrupt closure of its largest furniture vendor coupled with below average seasonal sales of lawn and garden related products.

Due to the closing of these distribution centers, numerous laborers are losing their jobs. This includes both unskilled and skilled workers. These include unskilled positions such as unloaders, receivers, haulers, drivers, and order fillers. Skilled positions include floor supervisors, facility managers, inventory managers, quality control, asset protections, operations, and IT work. Though this trend is hopefully temporary and unfortunate for these workers, it presents the HVAC/R industry and specifically HARDI members with a prime recruitment opportunity as hundreds of potential employees will be looking for work soon.

There are currently close to 33,000 commercial industrial properties dedicated to distribution in the United States. As the map above shows, the majority of distribution warehouses are located in HARDI’s Southwestern and Western regions followed by the Southeastern and Central regions. HARDI further investigated the number of closing distribution center by pulling industrial distribution warehouses and these centers’ vacancy rates, indicating that demand for distribution space is slowing AND the increasing number of people who are now on the job hunt.

The graph above shows vacancy rates by region. HARDI expects the Southwest region to have the highest vacancy rate (2023 Q2) followed by the Southeast region. Despite the Central region’s third highest vacancy rate, the region’s vacancy rate is predicted to decrease. The Northeast and West regions are expected to experience vacancy rate spikes (from 2023 Q1 to Q2).

Recommendations

The vacancy rate data captures the number of industrial distribution centers that are being vacated. These closing indicate that a number of distribution center workers are and will be on the job market. With the onslaught of people looking for new employment, we encourage distributors specifically in Southwest and Southeast regions to start deploying marketing and recruiting materials. Distributors, particularly in the Northeast and West should also prepare for recruitment due to larger vacancy rate spikes (from 2023 Q1 to Q2).

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