Transportation Best Practices: Tuesday Morning shifts modes
Left to right: Jerry Kemper, general manager of transportation; Cheryl Bailey , transportation logistics manager; Brian Turner, director of transportation and planning.
February 01, 2012
These days, trucking companies are facing increasing capacity constraints as the economy creeps toward recovery. Equipment is more expensive, drivers are getting harder to find, fuel costs are rising again, government regulations are becoming more restricting, and hours of service could be tightening. And when the economy finally does come around, it could become even more challenging to find precious capacity.
Logistics leadership at Tuesday Morning, a Dallas-based retailer specializing in upscale closeout merchandise with 865 stores across the U.S, saw these potential stumbling blocks forming as early as 2006.
And since Tuesday Morning’s stores function on an event basis, its major challenge was getting store merchandise from its origin through distribution channels and into their stores by a specified date and time for their more than 20 specialty sales events per year.
Taking all this into consideration at the time, Tuesday Morning started looking for ways to save money while meeting its tight deadlines—and what the team came up with was a solution ahead of its time. They decided to use rail intermodal out of the West Coast ports to a single, national distribution center (DC) just outside of Dallas.
To make this happen, Tuesday Morning got intermodal help from an unusual source: its trucking partner, Averitt Express. The carrier, like many trucking organizations these days, prides itself on finding multiple solutions for its customers, even when it might involve other modes.
“We started to take a hard look at intermodal for our inbound needs in the fall of 2006 during peak season,” says Cheryl Bailey, Tuesday Morning’s logistics manager for transportation. “We found that it gave us many options.”
Bailey says that because of physical limitations on how much product it could store at its Texas distribution facility, the logistics team realized that it could better manage its inbound flow when freight was put on the train. Line-haul savings were substantial; service was as good or even better than the truck at times; and there were no worries about capacity.
In turn, Tuesday Morning’s long-haul solution became as unique as its collection of one-time merchandise it sells in its stores. Here’s how the retailer’s relationship with its truck carrier lead them to ride the rails to increased profitability and rack up transportation savings that continue to this day.
Give rail a chance
According to Bailey, Tuesday Morning has worked in concert with Averitt, one of its primary truckload (TL) and less-than-truckload (LTL) carriers since 2005. Back in 2006, a portion of Tuesday Morning’s product was arriving at Averitt’s PortSide distribution center in Long Beach, Calif., and transloaded by the carrier to over-the-road trailers for movement via truck to Farmers Branch, Texas—a gigantic, 1.7-million-square-foot group of facilities located just outside of Dallas.
To get to that facility in the most cost-effective manner, Tuesday Morning began substituting the Union Pacific Railroad (UP) for the 1,420-mile linehaul between Long Beach and Dallas. Service ran about 58 hours. Tuesday Morning’s logistics team as well as their carrier partner both claim that the service reliability was identical to truck, with obvious dividends. “Simply put, the rates were better and the capacity was better,” says Jerry Kemper, general manager of transportation of Tuesday Morning.
Tuesday Morning’s distribution to its network of 865 stories is unique among national retailers in that it has chosen to cover the nation with its one DC in Farmers Branch—a move that puts planning and storage at a premium. In fact, due to the amount of freight coming inbound, the team found that storage actually became limited at the gigantic facility.
The logistics team discovered that with some advanced planning and coordination, rail intermodal deliveries could be spaced adequately apart to help alleviate storage concerns—without sacrificing service.
At the time, Tuesday Morning was utilizing about 30 to 40 core carriers. And while the shippers contacts at Averitt understood that sometimes the deadlines for this link of the supply chain were tight, it felt intermodal services could meet the majority of time demands while earning major savings. “It was an obvious decision,” says Bailey.
Subscribe to Logistics Management magazine
entire logistics operation. Start your FREE subscription today!