BY MARK B. SOLOMON, EXECUTIVE EDITOR–NEWS
MOTOR FREIGHT
transportationreport
POOL DISTRIBUTION, THE PRACTICE OF DISTRIButing freight from multiple shippers from distribution
centers to store locations using a network of specialized
truckers, is not new. Nor is it generally on many logistics
radar screens. But with brick-and-mortar retailers continually challenged to cut costs and improve store service, the
potential value of pool distribution might be worth a closer
look.
The model is as elementary as it is somewhat long in
the tooth: Specialty retailers, companies that hold all their
stock-keeping units (SKUs) in their stores as opposed to
mass-market retailers that have physical store space to
hold inventory, arrange for their cartons to be moved from
their DCs to pool distribution points. The pool distributor
receives the shipments, processes and sorts the packages
based on their final destination, and then loads up trucks
for deliveries to the customers’ stores within specific geographic regions.
Because distributors “pool” a sufficient density of freight
from multiple retailers to build full truckloads, each retailer
achieves economies of scale it couldn’t get with less-than-truckload (LTL) or parcel service. The pooling model
extends those efficiencies to regional deliveries, which
benefits retailers whose store count in an individual market
isn’t dense enough to justify full trailerloads. For example,
by leveraging eight regional pooling nodes that each feed
multiple individual markets, a specialty retailer can have
national coverage at a significant discount to using other
forms of transport or utilizing a private truck fleet.
The pool distribution model is built around the concept
of catering to the unique needs of each specialty retail cus-
tomer. A pool distributor can deliver into multiple time
windows. It can move merchandise in the morning and
non-merchandise such as displays in the afternoon. It per-
forms what is known in the trade as “trap and hold,” where
product is shipped to an offsite location and held there until
it is authorized for release.
Most important, it must be able to execute every movement with precision. That’s because for specialty retailers
that hold no buffer inventory at the store level, stockouts
are verboten. “Specialty retailers compete at the store, not
in the supply chain,” said Jeffrey S. Berichon, senior vice
president, product strategy–retail distribution for Canadian
logistics software giant Descartes Systems Group. Berichon
founded BearWare Inc., a Cleveland-based pool distribution and technology company that Descartes acquired in
2015.
HEALTHY SAVINGS
GNC Holdings, a Pittsburgh-based retailer of health and
nutrition products, switched entirely to pool distribution in
2013 after years of running its own fleet between four distribution centers and 4,200 stores. Today, GNC’s nationwide
pool network consists of 12 distributors that operate out of
54 terminals.
GNC’s DC workers fill trailers using a “fluid load” process, where cartons are placed directly on special conveyors
leading into the trailer and software sorts them for their
specific delivery markets. The fluid load, or “shot-gunned,”
method (so named because of the speed at which the cartons move on the conveyors into the trailers) is consid-
Everyone (maybe)
into the pool!
Pool distribution has been around for
30 years or so but has not been high on
most logistics priority lists. Time to take
another look?
