Wal-Mart Shifts More Traffic to Intermodal

Wal-Mart Shifts More Traffic to Intermodal

Wal-Mart shifted more of its traffic from truckload to intermodal in its just-completed bidding cycle. In just one example of adjustments to traffic planning cited by Greg Forbis, senior director of corporate traffic, at the Dahlman Rose investment firm's annual global transportation conference, U.S. inbound shipments now are divided about evenly between the two.

Forbis, who oversees inbound transportation for Wal-Mart's non-perishable collect shipments, acknowledged that intermodal isn't always best. On some routes Wal-Mart switched back to truckload after finding that intermodal handoffs made delivery times too slow.

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Wal-Mart opted to "build allegiance" with its truckload carriers by not pressuring them to slash rates during last year's recession, said Forbis.

"We didn't take advantage of the market," he said. "We held to a two-year bid cycle. When we had the opportunity to really put hundreds of thousands of dollars back on Wal-Mart's bottom line, we continued to hold firm on our pricing and actually gave a rate increase for '09 going into 2010."

Forbes also said the retailer continues to make adjustments to its program that offers to take over management of transportation for its suppliers.

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He emphasized that the program aims to be collaborative, not coercive, and seeks efficiencies for vendors and service providers as well as Wal-Mart.

"If you read most of the supply chain articles it looks like we're trying to control the world and that's really not our intent," he said.

Forbis said Wal-Mart's learning curve includes developing a better understanding of how suppliers manage their networks and carrier relationships. He said that during the coming year the program will focus on small and medium-size suppliers that may lack the volume and expertise that Wal-Mart can add to their transportation management.

"We've had a few that have already converted," he said. "We've tried to keep incoming carriers with their suppliers." He said some carriers have been unwilling to cooperate but that others have recognized "the good, consistent volume that Wal-Mart offers them" and the opportunity "to build their network around that business."

-- Contact Joseph Bonney at jbonney@joc.com.