Sure ain,t what it used to be.

There are some scheduling shifts coming. We have known that since November. Until the changes are announced I don't see why so many are all doom and gloom.

A few claim to have left because they "knew" what was coming. Oh well. More spots for those wanting to work.

 

This is unlikely. My class actually had a lecture from one of the Walmart execs as to why they utilize a private fleet. Essentially, and this is true of any company, outsourcing logistics means a loss of control and usually, a reduction in service.

The reason companies use outsourced logistics, be that warehousing, inventory control or trucking is up front cost. Let's stick with trucking. The cost to buy, equip and man a fleet of trucks is extremely high. However, these trucks also bring value. Today, companies are trying too lower operating cost and all the old tricks are already being used. The new approach is inventory control. JIT (just in time) is the new wave. Not having to keep large amounts of inventory on hand means a much higher cash flow. Push pull methods of stocking have traditionally favored the push method. This is because prediction and forecasting were the only way to ensure that you didn't get caught with empty shelves. Now, with the massive increase in information technology, the pull method will become more widely used.

While Walmart will never be a pull dominate company, they will seek to lower inventory levels. In order to do this though, they need a solid, stable and predictable logistics system. The heart of which is their trucks.

Also, you must remember that in order to compete with Amazon, Walmart has had to invest heavily in their dotcom business. This might actually cause them to increase their fleet. Look at Amazon, they already purchased their own trailers. There is talk of them buying trucks as well. If speed is your selling point, your own fleet really helps that goal.

 

Very well stated!

 

Ochelata Ok. England L/O pulled their little stunt, PF was back to 99.5 LOS in 72 hours.


That and the bragging rights of ATA National Champions etc.......

 

That is the other thing. Few, if any mid to large size carriers rely solely on one customer. A terminal might, but not the whole company. All it takes to lure away capacity is a higher bidder. It can even be temporary, such as a disaster happening in one part of the country and shippers paying through the nose to get trucks in there.

But this cannot happen with Walmart trucks unless they authorize it. They have complete control. That means they have a floor which capacity bottoms out at. This offers them predictability.

Also, we can't forget about the actual physical value of their trucking division. All of those trucks, trailers, tools, software and personnel are worth a lot of money.

That control is why so many food companies have thier own fleets. Any delay to them could mean millions of pounds of food (inventory) that cannot be sold ever. That is a massive hit if it were to occur. Don't discount control, it is valuable but it cost so much money to implement if you don't already have it.

 

They are starting to use a JIT philosophy lately as we have what we call carrier due date, product cannot be delivered early anymore, including by the private fleet. They want inventory to come in and go to the store as quickly as possible. They are fining suppliers for shipping early. Makes it a little more challenging as a driver, but other than the thick headed ones that won't comply with walmart wishes its not been a big deal.

 

Quick question, is the product coming from a DC or from a vendor? Just to make sure I'm clear, are you picking up those shipments directly from a supplier?

 

One problem i see with getting rid of the private fleet is what happens if they realize they screwed up, there would be almost no way of going back. They would have to do a couple of test markets maybe and see how it goes, but a lot of guys would jump ship if they saw that happening elsewhere.

 

Yes

 

Indeed, they wouldn't try to get it back for decades. Any profit made off of it would be swallowed immediately by the new investment. Once it's gone, it's gone.