Subscribe to our free, weekly email newsletter!


Viewpoint: Transportation answers in unlikely places

By Michael Levans, Group Editorial Director
February 01, 2012

This month’s cover story on the evolving relationship between Tuesday Morning, an upscale retailer with 865 stores, and its motor carrier partner is an inspirational sign of the times—and contains a theme that we may be hearing repeatedly from other shippers if the economy kicks into high gear.

Back in 2006, the logistics team at Tuesday Morning was just beginning to feel a capacity pinch in its long-haul moves between Port of Long Beach and the retailer’s massive 1.7-million-square-foot distribution center (DC) in Farmers Branch, Texas. So, on the suggestion of its motor carrier, Averitt Express, the shipper decided to experiment by substituting over-the-road carriage with rail intermodal on occasion to get a feel for how the service would perform.

And as the retailer’s logistics team tells our John Schulz, it felt pretty good. The service ran about 58 hours on average, and due to Averitt’s evolving relationship with the Union Pacific on the lane, both the shipper and carrier began to realize that service reliability was right on par with truck the more they made the run.

“After a while it was pretty simple,” Tuesday Morning’s General Manager of Transportation Jerry Kemper tells Schulz. “The rates were better and the capacity was better.” But how could the team work rail intermodal into their lean, time-sensitive transportation plan that hinged on the flexibility of trucking?

The retailer is pretty unique in that it services all 865 stores out of the one DC in Farmers Branch, a reality that does, in fact, put delivery timing, storage, and inventory turns at a premium. But after sitting across a table with its motor carrier, the shipper began to see that with better advanced planning, their rail deliveries could be spaced to help relieve any storage concerns without sacrificing service levels.

And, of course, if the rail is caught up or an overseas supplier can’t make a deadline, the carrier is able to jump in with expedited over-the-road service to make up any lost time. As Schulz’ case study reveals on page 24, Kemper and the team felt comfortable with the multimodal plan and decided to roll it out in full force in March 2010—an implementation that came with a few surprises and some pretty impressive benefits.

Tuesday Morning is calling this move “transformational,” and judging from the cost savings the logistics team has realized, that lofty designation is most certainly deserved. The decision process was driven by foresight, some experimentation, and in what might come as a surprise to many, from the advice of an open-minded trucking partner.

Considering the regulatory, capacity, and general operational challenges our trucking partners continue to face, it wouldn’t be going out on a limb to say that savvy shippers may find the answers to some of their biggest questions in unlikely places this year.

About the Author

image
Michael Levans
Group Editorial Director

Michael Levans is Group Editorial Director of Peerless Media’s Supply Chain Group of publications and websites including Logistics Management, Supply Chain Management Review, Modern Materials Handling, and Material Handling Product News. He’s a 23-year publishing veteran who started out at the Pittsburgh Press as a business reporter and has spent the last 17 years in the business-to-business press. He’s been covering the logistics and supply chain markets for the past seven years. You can reach him at .(JavaScript must be enabled to view this email address)


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

For November, which is the most recent month for which data is available, the SCI came in at -3.2. While this is still entrenched in negative territory, it represents an improvement over October and September, which were -5.5 and -6.6, respectively.

Total December shipments––at 1,150,810––were 3 percent better than November and up 5 percent annually. And total 2014 shipments––at 14,092,551––were up 5.61 percent, setting a new record for annual shipments during the time which Panjiva has been collecting this data since 2007.

The biggest story in the energy sector has to be the 30% decline in oil prices since June to a level not seen since the global recession cut a whopping 6% from global consumption back in 2009.

The challenge for air cargo operators to fill capacity, and the confidence to add capacity, remain the same as the demand curve for air freight services recovers.

For the fourth quarter of 2014, UPS said it anticipates adjusted diluted earnings per share of roughly $1.25, with full-year 2014 adjusted diluted earnings per share at $4.75, which represents a 3.9 percent annual gain over 2013’s adjusted earnings per share of $4.57, with full-year 2014 diluted earnings pegged at around $3.28 per share, which is 28.9 percent below 2013’s $4.61.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA