Hodges Warehouse + Logistics Looks to Become National Company
May 2016
By David Zaslawsky
Photography by Robert Fouts
Not long ago, Hodges Warehouse + Logistics turned down a request from an existing customer to expand to Detroit.
The firm said no “because we didn’t feel like we were ready for Detroit,” said Lance Hunter, CEO of Hodges Warehouse + Logistics. That is now, but within five years the answer will or would have been yes. That’s because the goal is to “become a national company,” Hunter said at the firm’s largest warehouse – the site of the former Winn-Dixie distribution center. The complex is about 800,000 square feet and includes two warehouses, with the largest one about 450,000 square feet.
After doubling its revenue in five years to close to $14 million last year, Hodges becomes a national company the same way it’s been on an accelerated growth pattern – the automotive sector.
In five years the firm could have warehouse space in not only Detroit, but also Kansas City, and sooner will expand to Mississippi and Opelika to serve automotive clients. The firm has clients that supply parts to Hyundai in Montgomery; Kia in Georgia; Nissan and Toyota in Mississippi; and Chrysler in Detroit. “Everybody is interested in supplying as many OEMs (original equipment manufacturers) as possible,” Hunter said.
Most likely, Hodges would lease warehouse space in those expanded markets to service its customers; pick up products; maintain inventory and transport the parts if requested.
“We’re in a growth mode,” said Paul Hodges, vice president, shareholder and broker of the 100-year-old family-owned company. “We’re always looking for opportunities for new business here.”
Another way to expand is helping recruit Korean and Chinese companies to Montgomery, and Hodges has helped several thanks to a key asset – Ena Piao, who handles international operations and finance for the firm. She speaks Chinese and Korean.
Revenue is forecast to grow 10 percent to 20 percent this year and again in 2017 thanks to automotive projects with Hyundai Motor Manufacturing Alabama’s plant in Montgomery as well as Kia’s plant and Nissan’s facility in Mississippi.
Hyundai has been especially lucrative for Hodges because of all the suppliers nearby, and Hodges, which has 15 trucks and 70 trailers, is constantly trucking parts to suppliers. “We’ll drop off a trailer and pick up a full one and drop it off,” Hodges said. “We just stay on that route.”
When HMMA added a third shift of workers that acutely impacted its supply chain, more parts were needed as production rose to about 400,000 units a year. And now that Hyundai is adding Santa Fe production, that means new parts for suppliers – and that benefits Hodges, which leases space to suppliers; loads products; maintains the inventory; and trucks those parts if requested on a first-in, first-out basis. An increase in parts results in more warehouse space and more logistical support. Adding the Santa Fe production will also bring in some new suppliers, according to Hunter.
If that’s not enough, the company is also looking to expand by adding sequencing and light or simple assembly. “It’s called value-added services,” Hunter said about putting the products in the right sequence and light assembly that would require light machinery or power tools. “Somewhere, somebody is putting that headrest on a seat,” Hunter said as an example of light assembly. “There are companies doing that all over. We’re very hot on that. We have worked with several start-ups that do exactly that.” One of those companies grew to the point they bought their own building, Hunter said.
There’s always room to squeeze in a light assembly project when you operate 4 million square feet of warehouse space in Montgomery; another 600,000 square feet in Dothan; and 150,000 square feet in Prattville. “All our buildings have nooks and crannies, so to speak,” Hunter said.
About 70 percent of the company’s warehouse space at its 17 facilities is leased while the remaining 30 percent Hodges operates as a third-party logistics hub.
The bulk of the firm’s revenue – 70 percent – comes from warehousing and logistics. Although less than 10 percent of the revenue is generated from real estate that segment is growing as well. The company provides brokerage services for clients – selling warehouses, industrial and commercial properties, according to Hodges. The commercial real estate sector “is improving,” Hodges said.
Hodges developed Lagoon Business Park on the bypass, where its company headquarters is located. Across the bypass, Hodges is developing a mixed-use park on 100 acres. WOW, a Frito-Lay distribution center and American Tire Distributors are located there and a Mapco Express is coming soon.
The firm’s residential real estate segment has a goal of doubling its agents to 50 by the end of 2017. Exit Hodges Real Estate began about six years ago, and just this past October, the firm opened office space on Dexter Avenue next to Chris’ Hot Dogs to accommodate the growing agent network.
“We’re optimistic about the residential real estate market,” Hunter said. “We definitely think that the residential real estate market is just now turning positive. Inventory is very low. There is a lot of pent-up demand out there from 2008.” The firm has about 150 properties listed.
“We want to build our (residential) real estate operations up and be a bigger player in the market – top 10,” Hodges said.
The company has been operating a small business services division for about three years. It was added because “we have a large accounting staff,” Hodges said. Some of the services offered are tax planning and preparation; strategic business planning; new business formation; part-time chief financial officer services; and handling day-to-day financial affairs for the elderly.
