U.S. Manufacturing Slowdowns and 3PL Closures: How Shippers Can Reduce Logistics Risks？
According to supply chain media outlet FreightWaves, 15 supply chain-related companies across the U.S. are preparing for layoffs or shutting down operations, impacting a total of 1,850 jobs. （FreightWaves）
What do these layoffs and closures mean for U.S. supply chain businesses? Some manufacturers are reducing production capacity, while certain third-party logistics (3PL) operators and last-mile delivery contractors are closing facilities.
Businesses operating in the United States may need to evaluate their service providers' long-term operational viability more carefully moving forward.
(A complete list of the 15 U.S. logistics and manufacturing companies undergoing layoffs, facility closures, or shutdowns is appended at the end of this article.)
1. U.S. Manufacturers Reduce Capacity Amid Softening Market Demand
Several food, building materials, and packaging manufacturers are adjusting operations through production cuts or workforce reductions in response to demand conditions or other operational factors.
Building materials manufacturer Louisiana-Pacific decided to reduce production at its Jasper, Texas, plant indefinitely starting in October due to soft demand in the oriented strand board (OSB) market. The decision followed a comprehensive evaluation of operating costs, capital requirements, logistics expenses, and asset utilization, with future capacity adjustments dependent on market conditions.
Frozen food producer Ruiz Foods adopted a different strategy to manage declining consumer demand. The company laid off 176 workers at its Dinuba, California, facility and scaled back production to five days a week starting in November, though it noted plans to continue investing in the plant.
As manufacturing capacity scales back, the demand for transporting raw materials and finished goods may also decrease.
2. 3PLs and Last-Mile Delivery Providers Cut Facilities: How Businesses Can Mitigate Risk
3PL Operators, including CJ Logistics America and Kenco Logistic Services, are planning to close warehouse facilities in Pennsylvania.
Similar contractions are occurring in last-mile delivery. Following the end of its partnership with Amazon, last-mile delivery contractor 4XH Logistics closed its San Antonio operation, leading to the elimination of 230 jobs.
While some providers have not publicly detailed the specific causes of these closures, FBD GROUPS advises shippers to develop contingency plans for potential facility or operational shutdowns among their 3PL and last-mile delivery providers.
For high-volume shippers requiring long-term warehouse space in specific regions, holding the primary warehouse lease directly and outsourcing daily site operations to a 3PL operator is one strategy businesses may consider. This approach helps mitigate relocation costs and the operational disruption of switching facilities.
For standard overseas warehouse users, shippers should review existing contracts to ensure clear terms governing the allocation of transportation and system migration costs during facility closures. Contracts should also require 3PL Operators to provide exportable data that can be directly imported into a new warehouse system. Maintaining direct ownership and control over order and inventory data can help reduce operational dependency on any single service provider.
3. What Lies Ahead for the U.S. Supply Chain?
A survey by CBRE indicates that over 32% of responding companies plan to increase their reliance on 3PL operators, while 67% report that more than one-quarter of their industrial and logistics leases will expire within the next 36 months. CBRE U.S. Industrial & Logistics Occupier Survey
As businesses evaluate whether to renew leases, relocate, or switch 3PL operators, the U.S. warehousing network may continue to adjust. Consequently, shippers may see changes in warehouse locations, service operators, and freight routes.
To guard against unexpected disruptions, businesses with U.S. freight forwarding and warehousing needs should evaluate potential overseas warehouse partners on their operational stability and financial continuity. This evaluation is especially important for shippers with hazardous materials transportation requirements, who should verify whether backup facilities and carriers hold the proper certifications and operational capabilities for specific hazmat classifications.
FBD GROUPS recommends establishing backup warehouse and carrier options in advance. Alternatively, partnering with an overseas warehousing provider that operates multiple facility locations offers greater flexibility. For example, FBD GROUPS operates two strategic warehouse locations in California, providing clients with greater flexibility in inventory allocation.
About FBD GROUPS
FBD GROUPS is certified by DOT, IATA, ISO 9001, ISO 14001, and OSHA. Our services cover warehouse storage, last-mile delivery, reverse logistics, and RMA services for UN3480 / UN3481 / UN3171 electric products, batteries, and renewable energy products.
FBD Wattsup provides post-sale operations, including product inspection, testing, repair, refurbishment, recycling, and product installation. FBD GROUPS provides end-to-end supply chain management across international freight forwarding, drayage, warehousing, last-mile delivery, reverse logistics, and RMA services.
List of 15 U.S. Logistics and Manufacturing Companies Undergoing Layoffs, Facility Closures, or Operational Shutdowns
Company | Location | Jobs Affected | Action / Effective Date |
4XH Logistics LLC | San Antonio, Texas | 230 | Closure; layoffs begin Nov. 6 |
Ardor Delivery Services | Centerville, Ohio | 179 | Closure; Nov. 26 |
FPL Food LLC | Augusta, Georgia | 179 | Permanent layoff; Oct. 31 |
Ruiz Foods | Dinuba, California | 176 | Layoffs; 170 positions Nov. 4, plus 6 earlier cuts |
Postal Center International | Brownsburg, Indiana | 151 | Closure |
Louisiana-Pacific Corp. | Jasper, Texas | 150 | Indefinite production curtailment; Oct. 2 |
Pepsi Beverages | Hyattsville, Maryland | 143 | Mass layoff; Nov. 13 |
Eagles Delivery LLC | Roanoke, Texas | 115 | Layoff; Sept. 12 |
Capstone Delivery Inc. | South Gate, California | 106 | Permanent closure; Nov. 21 |
Flagstone Foods | Dothan, Alabama | 98 | Layoff; Oct. 22 |
P1 Logistics LLC | Littleton, Massachusetts | 77 | Operations expected to cease; cuts Oct. 24-Dec. 23 |
Packaging Corporation of America | Gas City, Indiana | 72 | Closure; Nov. 2 |
CTI Foods Bean LLC | Saginaw, Texas | 66 | Permanent closure; Nov. 9 |
CJ Logistics America LLC | Newville, Pennsylvania | 56 | Closure; Oct. 31 |
Kenco Logistic Services LLC | Northampton, Pennsylvania | 52 | Closure; cuts begin Nov. 16 |
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