A dry-goods warehouse in Jessup that supplies Giant Food grocery stores and employs about 250 people will close in June, the operator, Jessup Logistics LLC, said Wednesday.
The subsidiary of New Hampshire-based C&S Wholesale Grocers said it will save about $13.5 million a year by shifting the distribution work from the traditional warehouse in Jessup to a more technologically advanced facility elsewhere. The company did not say where.
"We've undertaken an extensive top-to-bottom evaluation of the operations to determine what solutions are available to provide the best value for our customer and the consumers who ultimately benefit from available savings," said Rick Stacy, a regional vice president who heads the operations, in a statement late Wednesday.
A worker at a related facility said the Jessup warehouse workers were notified of the shutdown Wednesday morning and told the work would be handled by a more technologically advanced warehouse in Pennsylvania.
Jamie Miller, a spokesman for Giant Food, said C&S will continue servicing the chain's grocery stores from another facility.
Jessup Logistics has worked with Teamsters Local 730, which represents about 200 of the employees, to develop a transition plan for the full- and part-time workers, Stacy said. It includes a plan for severance and potential alternate jobs for union members.
The president of Local 730, Ritchie Brooks, could not be reached Wednesday.
Jessup Logistics had taken over operations of the warehouse in March 2011 for Giant Food of Landover, when Giant, the region's largest grocery store chain, outsourced the dry-goods part of the distribution facility to save money. Jessup Logistics did not acquire the facility.
Giant has continued to own the center and to run the fresh foods portion of the warehouse as well as the transportation and recycling divisions.
When the dry-goods outsourcing began, union leaders told The Baltimore Sun that they were concerned that C&S would move the work to a facility in Pennsylvania that uses robotic technology and fewer employees.
In a contract Giant negotiated with the Teamsters local in May 2011, about 200 of about 400 employees who handled dry goods lost their jobs. Those workers were to be offered buyouts or jobs in other parts of the company.
Giant also agreed not to outsource the fresh-foods part of its distribution business for three years.
Jessup Logistics said Wednesday it had notified the state Department of Labor, Licensing and Regulation of its plans to shut down, as required by law, but a state labor department spokesman said the state had not received the notice by Wednesday afternoon.
C&S operates five other distribution centers throughout Maryland with more than 1,200 employees.