Target’s online operation adding Amazon-like package sorting centers in Dallas and Houston

Target adopts a link in its online delivery structure that Amazon uses – warehouse buildings that aren’t filled with rows of goods, but with sealed packages that need to be sorted for delivery.

Dallas and Houston are among the first four cities in which Target is opening so-called “sorting centers” after a successful test in Minneapolis, the retailer’s headquarters.

Target has leased a 220,000 square foot warehouse at 2300 Walnut Hill Lane in Dallas and a 173,000 square foot building at 16275 Tomball Parkway in Houston.

The facilities will open at the end of October, just in time for Christmas shopping. The centers have started hiring staff but are unlikely to reach more than 150 full-time positions before 2025, a company spokeswoman said. There will also be seasonal part-time jobs.

The other two sorting centers will be in Lawrenceville, Georgia, near Atlanta and the Philadelphia area.

“These new facilities provide faster delivery times at lower cost in high-density markets,” said John Mulligan, Chief Operating Officer of Target, during the company’s conference call last week. “In addition, they create space in the back room of the branches they serve and thus expand the capacity for further digital growth over time.”

Target’s stores are its fulfillment centers and process 95% of the company’s online orders. Store employees pick the goods that customers want to pick up at the curb or pack items that they want to deliver to their homes.

Comparable digital sales rose 10% in the summer quarter, after a 195% increase last year. Digital sales continue to be led by same-day orders, up 55% from more than 270% last year.

In stores with the new sorting centers, Target trucks will pick up parcels from the branches several times a day. The boxes are sorted by postcode and loaded into delivery vans that go to certain parts of the city. For the freight forwarder who picks up from Target, this means less handling of boxes and ultimately lower costs for the company.

Target built its first sorting center in Minneapolis last year using technology it acquired from Grand Junction and Deliv. The process was tested with our own ship drivers in Minneapolis.

After all, ship drivers deliver from the sorting centers in Texas. But first, Target will use its existing transport partners from UPS to regional last-mile delivery services.

Twitter: @MariaHalkias

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