of the truckers’ base rate for line-haul service.
TACTICAL MANEUVERS
Transport costs were much on the
minds of an elite group of about 100
shipper executives gathered in
Atlanta in mid-April at a conference
hosted by Georgia Tech’s Supply
Chain & Logistics Institute.
Executives and analysts attending
the National Logistics &
Distribution Conference voiced con-
cerns that as fuel surcharges course
through the supply chain, the result
will be a surge in consumer prices—
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perhaps as early as the summer—to levels
the nation hasn’t seen for decades.
One executive, speaking without being
identified, said that unless oil prices
receded quickly and dramatically, “I don’t
see how we can avoid consumer price
inflation in the double digits later this
year.”
Yet there was also a sense that shippers
will find their way through the morass.
From the use of “load bars” that can
reduce damage claims by securing freight
aboard a trailer, to the development of
capacity-sharing arrangements, to paying
bonuses to drivers to finish local multi-
stop routes earlier than planned to save
time and fuel, to simply asking partners if
they could adjust their delivery schedules
to accept less-expensive services, shippers
and truckers will look under every rock in
their bid to neutralize higher fuel spend
with better productivity—and cost sav-
ings—elsewhere.
“I can’t offset it completely, but I can
minimize the hurt,” said Gough Grubbs,
senior vice president of logistics and distribution for Stage Stores, a Houston-based retail chain with more than 780
stores operating under the Goody’s,
Bealls, Palais Royal, Peebles, and Stage
brands.
Stage has begun a pooling program
with other retailers that operate in roughly the same geographic footprint, Grubbs
said. Under the program, Stage’s competitors bring their small parcels to one of the
company’s distribution centers, located in
South Hill, Va.; Jeffersonville, Ohio; and
Jacksonville, Texas. Once those shipments
arrive, Stage will break down the trailers
and cross-dock the shipments onto its
own trailers—along with its own goods—
for outbound truckload deliveries to its
21 hubs that augment the DCs.
The pooling agreement has three-tiered
benefits, according to Grubbs. Stage’s
rivals, which were forced to pay much-higher small-parcel rates because they
lacked the density to build less-costly
truckloads, now have access to truckload
pricing because their shipments ride
along with Stage’s freight. Stage benefits
by filling its trailers faster, thus avoiding
the cost of holding a rig and trailer
overnight to build a truckload. And the
