Global Logistics: Averitt Express introduces Asia-Memphis LCL service

Jeff Berman, Group News Editor -- Logistics Management, 7/16/2008

COOKEVILLE, Tenn.—Averitt Express, a provider of freight transportation and supply chain management services, has rolled the Asia-Memphis Express, a new less-than-container load (LCL) service from Asia to the United States.

The company said in a statement that this new service will provide various benefits for shippers and importers, citing that transit times may be up to 10 times faster than traditional LCL service.

In an interview with LM earlier today, Averitt Express Vice President of Development Charlie McGee highlighted a few of the main benefits behind this new service. He explained that the Asia-Memphis Express has been planned for some time by Averitt, because the inbound market to the U.S. market from an LCL perspective has been dramatically underserved from the infrastructure of the service providers that currently handle that business.

“The basic model that exists today is that cargo gets consolidated at the point of origin in Asia, and the majority of it is sent into the Port of Los Angeles, where it is broken down by one of four major service providers,” said McGee. “And that fallacy in the service is when they break down those containers, they are sitting in Los Angeles trying to build full domestic loads out of international cargo to every customs hub in the U.S. (which have varying volume levels, depending on location).”

The net result of this, he explained, is that the cargo sits in Los Angeles anywhere from a once a week closure to once every other week closure when it moves from Los Angeles to its final destination. This presents problems for importers, because they seldom know what that timeframe looks like, he said, because the timing and service tends to be inconsistent at best. He also explained that having multiple service providers at the U.S.-based end destination makes for a fragmented network from an entity perspective.

This situation is what led Averitt to go forward with the Asia-Memphis Express. However, he noted that the service goes beyond Memphis, which he described as a hub, as opposed to Los Angeles. The new service actually caters to the entire southeast region—and parts of the southwest region—of the U.S. out of the Memphis market.

“The way our service is going to work is that we are still consolidating in Asia, much like it works today,” said McGee. “We are consolidating cargo in Shanghai and building full container loads of mixed-customer cargo from that region and dispatching it from Shanghai once a week. And rather than sit and wait like they do in Los Angeles for a once a week departure, we rollout to various destinations every day.”

McGee added that when containers on the Asia-Memphis Express arrive at the Port of Los Angeles, they are shipped to Memphis intermodally. To do this, he said Averitt purchases a through-loop from its ocean carrier partners, which enables containers to be loaded on stack trains at the Los Angeles harbor and then moved with all the other interior point intermodal cargo to Memphis.

Memphis makes sense as Averitt’s main hub for this service, because it is one of Averitt’s main hubs for its LTL domestic network, as well as the location of its CFS Bonded Distribution Center.

The Asia-Memphis Express service will begin with one sailing a week out of Shanghai, and the service will then be expanded in Ningbo, Hong Kong, Shenzhen, the island of Taiwan, and Busan, Korea.

“We expect to attract a lot of customers outside of our network for this service,” said McGee. “We think this is the first product that is truly integrating a pure LCL operation domestically with an international operation, with very consistent transit times.”

McGee expects total transit times to be in the neighborhood of 23-to-26 days from Shanghai to all destinations served by the Asia-Memphis Express, depending how close to Memphis they are.