As part of its new distribution strategy, Minneapolis-based Target has opened a dedicated warehouse for handling foreign-made products arriving on the U.S. East Coast. Located in Suffolk, Va., not far from the port of Hampton Roads, the 1.5 million-square-foot facility (shown above) opened for business this past summer.

The Target discount chain, which posted revenues of $37 billion in 2002, operates a network of 19 regional distribution centers that serve 1,225 regular stores in 47 states, including 118 "SuperTarget" stores. Because it imports products from more than 75 countries, Target recently adopted a strategy of creating special "import warehouses" that hold imported goods on a short-term basis, then feed those items to the regional distribution centers as needed to meet demand from local stores.

The company first opened two import warehouses on the West Coast, but the retailer decided to redirect some of its inbound ocean containers from West Coast ports to all-water routes serving the Eastern United States.

Why the switch? "The import warehouse allows us the ability to get freight where it needs to be," explains Randy Wilburn, facility operations manager at the Suffolk warehouse. "We can better get product where the sales are." Another consideration, he says, was last year's labor troubles on the West Coast, which led to a three-week shutdown of that region's ports.

The new facility has 137 doors on one side of the building. Inbound shipments are received at both ends of the row of doors, while outbound loads are handled through the bays in the center.

HUB Group, Target's deconsolidator, coordinates the arrival of containers at the port, then shuttles them to the import warehouse, with shipments arriving either floor-loaded or palletized.

The warehouse workforce—190 full-time employees plus seasonal labor—palletizes most of the floor-loaded products. Workers affix bar-code labels to all pallets, then store them in pallet racks. Oddly-sized items such as furniture are placed in tier racks. For outbound shipments, employees remove cases from the pallets before loading them in full truckloads or intermodal containers.

The Suffolk warehouse primarily supports six regional distribution centers in the Eastern United States but also supplies certain products to DCs anywhere in the country. Although motor carriers handle most of the outbound traffic, the facility ships some goods in intermodal containers from Baltimore to the West Coast.

At the moment, the retailer is utilizing a little more than half of the new facility's capacity for storage, but plans to increase that percentage as it moves forward with its import warehouse strategy. Boosting utilization should be no problem: Last year, Target shipped about 6,000 containers to the East Coast, and this year it expects to move some 30,000 containers through that part of the country.