Job applicants for two giant warehouses in southwestern Louisville sat in a lobby on a recent Tuesday, waiting to be called in for interviews. Inside one of the structures, owned by Radial, a smattering of employees placed goods into packages and unloaded shipments in a docking bay. A lone forklift driver made the rounds. Employees here and there walked along shelves that stretched far into the distance.
Louisville resident Charlotte Mukagaju, originally from Congo, scanned bar codes and carefully placed cosmetic items into small shipping boxes. She did not have many co-workers that day: Rows upon rows of sales desks sat empty. In a few months, however, the scene will look drastically different when the websites of Radial’s customers process holiday shopping clicks.
Employment at Radial’s Louisville warehouses, which handle e-commerce for national retailers, is expected to spike by 3,750 workers for the holiday season, up 17 percent from last year.
Radial’s business is growing at about 15 to 20 percent per year, primarily because of consumers’ increasing interest in online shopping, said Brad Kennedy, director of the company’s Trade Port site.
Kennedy said that when he was young, consumers ordered from catalogs, and it took about eight weeks for products to arrive at the door. Radial’s Kentucky operations can make deliveries within two days to about 70 percent of the country.
“The consumer’s mindset is changed,” he said.
Total retail sales in the U.S. in the first quarter rose 5.1 percent compared to a year earlier, while e-commerce sales jumped 14.7 percent, according to the U.S. Census Bureau.
While some of the Radial’s customers prefer to remain anonymous, the company handles orders, payments, receiving, shipping, returns and other services generally for large national retailers, including Shoe Carnival and casual apparel company Aéropostale. Some clients use all of Radial’s services, others just one or two. Some clients pay Radial for each of their packages that leaves the facility, others pay a share of the revenue generated by the sales.
Kennedy said Radial’s Louisville area operations, which also include a facility in Shepherdsville, cover about 1.5 million square feet. Some of the space is still available — but reserved for existing customers.
“If we want to continue to grow, we’ll have to add another building,” he said.
Kennedy said that Radial’s ability to ramp up activity quickly and sufficiently is one of its primary selling points. At peak, the Louisville operations ship 150,000 packages per day, usually with UPS, which also is one of the company’s competitors.
Many small and medium-size companies cannot afford to spend millions of dollars to build and operate warehouses that sit idle for much of the year only to experience frenzied activity during the holidays, Kennedy said. Radial, on the other hand, can use large amounts of space because it has multiple customers with different peak seasons. Products for customers generally are kept in the same warehouse area — but similar items may be stocked far apart. Employees who pick up the items for packing and shipping are sent to the proper locations either by radio frequency scanners or voice commands. A computer system keeps track of where the items are and determines the most efficient route.
Many of Radial’s customers start small and sell products via Amazon, Kennedy said. When they outgrow that portal, they come to a company like Radial. One of its clients began in a garage and now, with the help of Radial, ships products worth more than $100 million annually.
Radial has 28 warehouses across the U.S., to be as close to retail customers as possible. It added two facilities this year, and plans to open another next year.
“In this business, it’s all about scale,” Kennedy said.
Proximity to the UPS air hub in Louisville allows Radial to accept orders until 9 p.m. — about three hours later than some competitors and retailers, he said.
Radial also sets itself apart by being able to handle all kinds of products — from lipsticks to kayaks — that require different kinds of care and packaging. Some packages take only seconds to put together, Kennedy said, but others can take six minutes: Golf balls require less care and wrapping than fine cosmetics. Radial can even personalize orders and embroider or engrave high-end purses and jewelry.
Even some companies that could afford the sizable investment that are required for a large logistics operation simply don’t want to deal with that portion of transactions. They prefer to focus on their products.
Based in King of Prussia, Pa., Radial is owned by Baltimore-based Sterling Partners, which invests in business and health care services.
Hiring during a labor shortage
The company’s Louisville warehouses employ about 1,000 full-time, about 80 percent of whom pick, package and process orders and incoming shipments. Kennedy said that hiring 3,750 seasonal workers presents some challenges, in part because of the sheer number, but also because of the local labor shortage.
Kennedy said Radial has responded by offering employees more flexibility. Five years ago, the company might have offered two shifts: day and night. Today, it has more than 20. Some employees may enjoy working full shifts at night, at slightly higher pay, but a stay-at-home parent may want a shorter shift while the children are at school.
Kennedy also has brought a disc jockey into the facility as a morale booster. And he has set up a money booth, in which the top pickers and packers get a certain number of minutes to grab cash swirling about the booth. He hopes to bring in a disco ball this year.
“Those are the kinds of things we’ve had to do to adapt to draw that workforce in,” Kennedy said.
Wage rates for this year’s seasonal employees have not yet been set, he said, but last year they made $10.50 per hour — though some bonuses can raise the wage to $14 per hour. People can apply in person at job fairs, with temp agencies and online.
Seasonal employees also have a good chance at a permanent position and promotions. Kennedy said 60 percent of the management team started in a seasonal job. And in the last three years, he said Radial has not had to lay off anyone who wanted to continue to work. Employees do have to perform, though, he said, by showing up on time, following instructions and focusing on quality.
“We’re the last people to see the order before the customer opens it,” he said.