Updated:
6/3/2009 8:50:00 AM
Shorter Supply Chains Mean More Growth for Truckload Carriers, Officials Say
By Rip Watson, Senior Reporter
This story appears in the June 1 print edition of Transport Topics. Click here to subscribe today.
NEW YORK — Truckload carriers are well-positioned to grow faster as supply chains continue to shorten in the next several years because of their speed and flexibility advantages over intermodal movement, major shippers and carriers agreed.
That was the message from top logistics officials at Wal-Mart Stores and MillerCoors, as well as major fleet operators such as U.S. Xpress Industries and Schneider National Inc. that also have nationwide intermodal options.
The executives spoke at the Wolfe Research Global Transportation Conference here recently. Also speaking were representatives from intermodal providers such as J.B. Hunt Transport Services, who said rail-truck business will capture business from the all-highway option.
Comments from both carriers and shippers were focused on long-term trends, since both shipping options have seen volumes decline steadily as the recession has deepened over the last six months.
Officials such as Kelly Abney, vice president of corporate transportation for Wal-Mart, and Eduard Jimenez, manager of logistics strategy and controls for MillerCoors, linked long-term truckload growth to the shortening of supply chains and steps to streamline distribution and reduce inventory.
Peter Goulding, executive director of global transportation for Estee Lauder, also tied expected future truckload growth to more efficient supply and manufacturing patterns affecting his company.
“Our business strategy causes us to look more and more at speed from the DC [distribution center] to the store,” Abney said, adding that truckload is a better tool to optimize smaller freight movements.
Intermodal still may be a viable option, Abney explained, especially if those operators can create more capacity for refrigerated shipments. Intermodal’s attractiveness also is linked to rising fuel prices, he noted.
Abney added that streamlining of the supply chain is “moving inventory backwards out of our stores and utilizing capacity upstream” in distribution centers. Wal-Mart is in the process of reviewing its store-stocking policies and shelf space allocation, which will take even more inventory out of the system, he said.
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