Dive Brief:

• Averitt Express will lay off 58 drivers, two switchers and one administrative worker, as well as two salaried employees, by Feb. 28, according to a Worker Adjustment and Retraining Notification issued to Indiana. Averitt Express said the end date was moved up from an expected April expiration of the contract.
• The Tennessee-based LTL and interregional carrier had a contract with Shoe Carnival's distribution center, which is headquartered in Evansville, Indiana. Averitt Express said it is working to offer job transfers to all laid-off employees, most of whom do not live in Indiana. Neither company returned requests for comments.
• With a national shortage of drivers, it is likely Averitt Express will try to retain and transfer the drivers to other locales.

Dive Insight:

E-commerce and LTL markets are often observed as being on fire right now. But with that comes disruption. The old retail formula used by brick-and-mortar stores, like Shoe Carnival, is shifting due to online shopping and evolving relationships with carriers.

It's possible Shoe Carnival may be feeling the effects of e-commerce upon its LTL deliveries to stores. But it could have simply reduced deliveries to its brick-and-mortar stores, said J.P. Wiggins, co-founder and vice president of logistics for 3Gtms. Instead, the company severed its contract with an LTL carrier during a time of reduced capacity in trucking.

Averitt Express is a Top 50 for-hire North American carrier that also does TL work. It has been adapting to growing demand for quicker LTL deliveries and the driver shortage. In March 2021, Averitt Express raised pay for regional hauling.

The following June, it opened its largest distribution center as part of an industrywide trend of adjusting to how e-commerce has changed the velocity and needs of LTL. Supply chain experts have said this type of large warehousing near large populations will continue, with more distribution centers located closer to urban areas, and possibly deep inside urban areas.

Averitt Express bills itself as an interregional LTL carrier, but it does a lot of business in the Southeast, where it was founded, Wiggins said. The carrier's segments for Shoe Carnival's deliveries were to many Midwestern and Mid-Atlantic locations, using drivers who were not from Indiana.

In a case study Averitt Express published about its relationship with Shoe Carnival, the carrier indicated it made deliveries to stores from the mid-Atlantic region to Minnesota, to southern distribution centers in Memphis, Tennessee, and Spartanburg, South Carolina. (Averitt Express also picked up some shoes from North American manufacturers.)

The case study reported most of the shoes were first shipped in to ports in Long Beach, California; Portland, Oregon; and Seattle. They were then dispatched to Evansville, Indiana, by rail. From there, Averitt Express headed to more than 300 stores. At the time the study was produced, Averitt Express was the only carrier going to Shoe Carnival stores.

It is a familiar setup to Wiggins, who used to work for Service Merchandise, once a large retailer of 347 North American stores. Goods would come in from Asia, and then Service Merchandise's headquarters and main distribution center would send the imported goods to the hundreds of North American stores. Service Merchandise began closing dozens of stores in 1999, and eventually shuttered because of woes related to debt.