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
Putting rail to work
So exactly how does the Averitt/UP partnership work for Tuesday Morning? Let’s examine the process and how the team put the intermodal process to work.
It starts with much of Tuesday Morning’s merchandise manufactured in the Far East. Those products are then shipped via ocean cargo to the West Coast ports of Los Angeles and Long Beach. Formerly, all that freight moved exclusively via truck to the Farmers Branch DC. But according to Brian Turner, Tuesday Morning’s director of transportation and planning, truck capacity concerns created worries that moving exclusively by truck might crimp the company’s lean distribution chain.
A few years ago, with the U.S. economy struggling, capacity concerns were not that great in the retail sector. “However, as the economy grew and capacity started to get tight, I needed to get ahead of the curve and do things like intermodal,” says Turner. “When capacity starts to get constrained on the road, I’m still flowing my goods.”
The transition was slow because they considered it a secondary option to its trusted over-the-road services. But after a few months, however, the roles reversed and intermodal service became Tuesday Morning’s primary mode of transportation from the West Coast. And when a delay is caused by an overseas provider, Averitt has the ability to make service promises through its expedited services.
This multimodal approach is “definitely indicative” of what shippers are asking for these days, according to Mark Richards, director of truckload sales at Averitt. And factors such as the looming driver shortage and increased government regulations on truck driver hours of service could only make things worse, he says, adding that it won’t take much of an economic uptick to make things even more challenging on the capacity front.
For Tuesday Morning, the streamlined service out of the West Coast is reliable and invisible to over-the-road truck. “Service has improved tremendously,” says Richards. “Back in the day, train service just wasn’t acceptable, and damage was a problem. But today, trains run straight from the West Coast into Dallas and Houston in 58 hours to 62 hours, and you can count on it.”
Solution in action
A generation ago, shippers who used rail service as a substitute for truck were shocked by the poor service levels. A series of messy rail mergers a decade ago did nothing to improve that service. But fortunately, times have change and the railroads have improved.
“Rail carriers are just as dependable as truckload these days,” says Kemper. “It’s a different service standard, of course. But once you get calibrated with that service standard, it’s been my experience the rails are very dependable.”
Kemper, who came to the retailer from the less-than-truckload (LTL) side, said that when LTL carriers began using rail a decade ago it was to compliment their over-the-road service. “That’s what we’re seeking to do as well—compliment our over-the-road carriers. Some of our over-the-road carriers are intermodal as well, so it works out,” he said.
“As we look at that strategy going forward, it’s a strategy we have to consider. Intermodal is cheaper than over-the-road. If we can do it and maintain the same level of efficiency, we’re going to do it.”
While Bailey declines to provide exact savings from use of intermodal, she did called it “significant.” Tuesday Morning currently utilizes intermodal for 20 percent of its overall transport, with 80 percent still going over-the-road. However, she says that the ratio could change going forward. “It will depend on how much we utilize rail for outbound,” she says. “We’re limited in storage space, and that’s the driving factor. If we don’t have a place to unload the box, we have to store it. If we return the boxes, we can bring more in.”
But given the cost savings, Tuesday Morning now looks at intermodal service as a viable transportation option in all lanes that exceed 500 miles. And Averitt, one of its main transportation partners, says its fine with that. “Tuesday Morning is an excellent customer,” says Averitt’s Richards. “Intermodal is a piece of that, and it’s going to grow a lot with them. In fact, I don’t want to call them a customer or client—it’s a true partnership. We share a lot of knowledge and we share a lot of ideas.”
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