Gap Launches 3PL Distribution Platform

Amazon, which doubled the size of its distribution network to more than 400M SF during the pandemic, has been busy this year culling excess warehouse space by subleasing up to 30M SF and delaying the opening of newly built warehouses for up to two years as the pace of e-commerce sales growth slowed.

Other major retailers who raced to build fulfillment centers in the past year to meet the demand for next-day delivery services also are busy making plans to deal with excess logistics capacity—by competing with Amazon for retail customers seeking 3PL services.

The list of retail chains opting to leverage their growing e-commerce logistics assets into national networks offering omnichannel fulfillment and distribution services to other retailers just got longer:

Gap announced this week the launch of GPS Platform Services, which will make its expanding network of fulfillment centers available to other retailers to distribute their products to customers.

Gap’s move into the national 3PL logistics space comes less than two weeks after another apparel retailer, American Eagle Outfitters, debuted its Quiet Platforms delivery network, which boasts access to more than 40 carriers covering all US postal codes, GlobeSt.com reported.

GPS Platform Services is aiming for a network with the capacity to process 1 billion units per year in 13 distribution centers. GPS will offer next-day and two-day shipping, short-term storage and cross-docking via its warehousing and a self-service portal, with API integrations into other e-commerce platforms including Amazon and Shopify, according to a report in SupplyChainDive.

The GPS network also will handle customer returns, including return initiation, shipping labels and processing at fulfillment centers.

Gap’s announcement coincided with the opening this week of its newest distribution center, a highly automated, robotic 850K SF facility in Longview, TX.

The company now owns six North American distribution centers and it leases three others, with plans for several more. Gap also has fulfillment centers in Fresno, CA; Phoenix; Groveport, OH; Gallatin, TX; Fishkill, NY; and Brampton, Ontario.

Earlier this year, Gap invested $100M in expansions at its 1.4M SF fulfillment center in Gallatin and its 400K SF center in Phoenix. In March, Gap said it would invest a total of $700M in its fulfillment network this year.

The specialty apparel retailer also acquired Context-Based 4 Casting, a Tel Aviv-based artificial intelligence and machine learning platform designed for retail applications. The platform applies predictive analytics and demand sensing to enhance the customer experience.

American Eagle’s Quiet Platforms will use the company’s “plug-and-play,” open-sharing tech platform to optimize deliveries in real time and lower costs for shippers. Quiet Platforms, which is partnering with DHL to offer a “date-definitive” delivery service, says the system can reduce delivery times by one to two days and lower costs by up to $1 per parcel.

The newest players in the national logistics contest are joining giants like Walmart, which intends to go toe-to-toe with Amazon with its GoLocal network. GoLocal has made more than a million delivers in less than a year of operation.

Produce giant Fresh Del Monte also is aiming to become a 3PL player.

The stakes are high for Amazon in this contest: by the e-commerce titan’s own estimates, third-party sellers now account for about 60% of all of the products sold on Amazon’s platform, with Amazon’s 3PL services generating more than $103B in revenue for the company in 2021, an increase of $23B over the 2020 total.