After years as a consultant in supply chain and fulfillment services, Tompkins International is launching the MonarchFx Alliance, a consortium of technology and service providers designed to provide faster, more efficient ecommerce fulfillment across sectors.
This initiative puts Tompkins into competition with major players like XPO Logistics, UPS Supply Chain Solutions and Radial, among others. It is also intended to allow retailers to better compete with Amazon and its massive distribution network, rapid fulfillment capabilities and tens of millions of loyal Prime members.
The alliance, which will launch this summer or early fall, will initially target one of three categories: Apparel and footwear, furniture and appliances or industrial services/B2B. MonarchFx plans to eventually expand into other areas like cross-border ecommerce, cold storage and store fulfillment, with each set up as a separate business unit.
“This is a total reinvention, a metamorphosis,” said Tompkins International CEO Jim Tompkins, a keynote speaker at Multichannel Merchant’s Operations Summit 2017, March 27-29 in Pittsburgh. “There will be different networks with different delivery requirements and fulfillment center designs.”
Tompkins said MonarchFx will launch with 15 to 20 clients. He said his group has made presentations to more than 400 retailers over the past couple years, as the concept has been in the works since 2012.
MonarchFx will include partnerships with JDA Software on the technology side, 3PLs NFI, Kenco and DHL Supply Chain, and two transportation providers he would not name, including one last-mile delivery specialist. Tompkins International and Tompkins Robotics will handle process design and automated materials handling solutions. An Asian technology partner he is close to signing will also handle robotic fulfillment for apparel products under 5 pounds.
Initially MonarchFx will have fulfillment hubs in in Chicago, New Jersey, northern and southern California, Atlanta and Dallas. Tompkins said this will allow it to provide same-day delivery to 20% of the continental U.S., next-day delivery to 40% and two-day delivery to the remaining 40%, other than a couple locations in Montana and Idaho. The focus is on high throughput and automation instead of massive storage to enable quick response to market demands. Plans call for the network to eventually include 36 facilities to provide more locations with faster service.
Asked why MonarchFx is launching now, Tompkins noted the continued rapid growth of ecommerce while traditional retailers like The Limited and Sears struggle and close hundreds of stores as representing a huge opportunity for his consortium. He pointed out how Amazon took in 38% of the domestic holiday ecommerce revenue in 2016, with Best Buy a distant second at 4%, according to Slice Intelligence.
“A company may have just spent $20 million for a new fulfillment center, and has facilities in Los Angeles, Dallas and Harrisburg, but they’re still getting murdered because a customer in Chicago doesn’t like two-day delivery that anyway costs them $14 to deliver with free shipping, and the order only had an $11 margin built into it,” Tompkins said. “They don’t have enough volume to open their own Chicago facility, so they need to collaborate and have someone do it for them, quickly and inexpensively.”
Mike O’Brien is Senior Content Manager of Multichannel Merchant