Viewpoint: Transportation answers in unlikely places

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.