As they look to cut costs and reduce carbon footprint while swiftly serving consumers across a growing spectrum of purchasing platforms, the two largest U.S. importers are proving the truth of the aphorism that imitation is the sincerest form of flattery. Logistics leaders of Wal-Mart Stores Inc. and Target Corp., in separate March 19 presentations at the Georgia Logistics Summit, indicated that they look at and often imitate the practices of each other’s company in charting their supply chain courses. And they also keep a close eye on such firms as Sears Holdings Corp. and Amazon.com Inc., although, unlike Amazon.com, neither has any drones… yet. When eccentric British cleric Charles Caleb Colton penned his famous imitation aphorism in the early 19th century, he surely wasn’t talking about 21st century logistics, but his words were called to mind in the closing sessions of the Georgia Logistics Summit, hosted March 18-19 at the Georgia World Congress Center in Atlanta by the Georgia Center of Innovation for Logistics. The fact is that Walmart and Target face similar tests as they advance programs to open smaller stores in urban markets and aim to serve the burgeoning number of consumers who prefer to order online.
Kevin Jones, Wal-Mart Stores Inc. vice president of inbound transportation, looks to leverage global best practices. (Photo by Paul Scott Abbott, AJOT)
Kevin Jones, Wal-Mart Stores Inc. vice president of inbound transportation,looks to leverage global best practices.
(Photo by Paul Scott Abbott, AJOT)
In the summit’s closing keynote address, Kevin Jones, Walmart’s vice president of inbound transportation, referred to “leveraging global best practices” to deliver everything from pallets to Sam’s Club warehouse stores to “eaches” to Walmart.com shoppers. And, from the ballroom floor, Steve Carter, Target’s director of global logistics planning and strategy, challenged Jones to concede that such leveraging includes imitation of competitors. In a preceding breakout panel presentation, Carter – who, like Jones, happens to be a graduate of the U.S. Military Academy at West Point – focused on some of the toughest challenges faced by today’s mega-retailers. In addition to high fuel costs and deficient U.S. transportation infrastructure, Carter honed in on labor and regulatory concerns, as well as serving the omnichannel marketplace. Target, Carter said, is “hoping for the best and planning for the worst” regarding the impending June 30 deadline for the International Longshore and Warehouse Union to agree upon a new labor contract covering West Coast port workers. Contingency plans for rerouting could mean more Target cargo coming into East Coast ports such as Savannah and Norfolk, which now handle 35 percent of Target imports compared with 65 percent for Los Angeles/Long Beach and Seattle, he said. Meanwhile, according to Carter, the regulatory climate is “just becoming crushing,” from truck driver hours of service to food safety rules, and fulfillment of online orders is an area that “is moving fast, and there’s no approved solution.” While tactics of mega-retailers are similar in many ways, Jones, in his keynote address, said Walmart has gained a competitive advantage by operating its own trucking fleet and, through its American manufacturing initiative, is investing $250 billion over 10 years in a program to source products closer to home, with supply chain benefits meaning U.S.-made goods won’t cost more than imports. “When you look at our initiative, it’s a win-win,” Jones said, citing benefits for Walmart customers, the company and, through support of jobs, the nation. Fewer transportation miles also should lessen carbon footprint.
Steve Carter, Target Corp. director of global logistics planning and strategy, says today’s mega-retailers face many challenges. (Photo by Paul Scott Abbott, AJOT)
Steve Carter, Target Corp. director of global logistics planning and strategy, says today’s mega-retailers face many challenges.
(Photo by Paul Scott Abbott, AJOT)
One of the first companies to sign onto Walmart’s latest buy American campaign after it was unveiled in early 2013 was 1888 Mills LLC, a Griffin, Ga.-based maker of towels and one of scores of Georgia businesses represented at the Georgia Logistics Summit. Jones said 1888 Mills has increased sales by 24 percent over the past year and is doing so well that it is adding a second factory. Indeed, Georgia success stories highlighted the two-day Atlanta summit. Monte Galbraith, president of Columbus, Ga.-based Denim Textile North America and chairman of the Georgia Association of Manufacturers, said his company, which supplies dyed fabric to jeans makers, said innovation, service and speed are keys in meeting customer expectations, commenting, “We never talk about price. “The thing that I expect on logistics is that I expect it to work,” Galbraith added. Jack Rittenhouse, director of logistics operations for Duluth, Ga.-based farm equipment manufacturer AGCO Corp., said a flexible network utilizing partnerships with third- and fourth-party logistics providers has propelled growth, while James Hawk, chairman of Toyo Tire North American Manufacturing Inc., said his firm has continued to expand its facilities in White, Ga., since beginning production there in 2006.
James Hawk, chairman of Toyo Tire North American Manufacturing, has no regrets about locating in Georgia. (Photo by Paul Scott Abbott, AJOT)
James Hawk, chairman of Toyo Tire North American Manufacturing, has no regrets about locating in Georgia.
(Photo by Paul Scott Abbott, AJOT)
“The decision to locate in Georgia was absolutely correct,” Hawk said, noting that Toyo’s site 50 miles northwest of Atlanta offers ready Interstate highway access that links to the Port of Savannah and the world’s busiest passenger airport, Hartsfield-Jackson Atlanta International Airport. “Logistics played the biggest part in it.” Stu Thorn, president and chief executive officer of Carrollton, Ga.-based electrical cable producer Southwire Co. LLC, echoed that sentiment. “Logistics is a big part of why Georgia is attractive for business,” Thorn said, noting that 80 percent of the U.S. population is within a two-day truck drive or a two-hour plane ride. In a plenary session, Georgia Gov. Nathan Deal pointed to state legislative efforts to deepen the harbor at the Port of Savannah, already the fourth-busiest U.S. containerport, as well as to the Atlanta airport, several Interstate highways, and multiple railroads with port access and key intermodal yards, commenting, “They all work positively together.
Georgia Gov. Nathan Deal extols the numerous logistical benefits offered by the Peach State. (Photo by Paul Scott Abbott, AJOT)
Georgia Gov. Nathan Deal extols the numerous logistical benefits offered by the Peach State.
(Photo by Paul Scott Abbott, AJOT)
“More and more of the world is discovering that Georgia is a good place to do business,” Deal said. Toby Carr, director of planning for the Georgia Department of Transportation, noted that one of Deal’s four top goals has been to expand Georgia’s role as a major hub for logistics. “Our intermodal network is first class,” Carr said. “We want to continue to grow and support that.” Ed Crowell, executive director of the Georgia Motor Trucking Association, said collaboration among transportation modes has been critical. “There’s probably no other state where all the modes get it and all the modes work together than Georgia,” Crowell said. Looking out at an audience filled with businesspeople, Curtis Foltz, executive director of the Georgia Ports Authority, cited GPA plans to invest $1.4 billion in infrastructure over the next 10 years and said, “Team Georgia gets it. Hopefully, most of you are here because of that.” Whatever the reasons, the Georgia Logistics Summit has grown from a 2009 luncheon-only function that attracted 450 to Midtown Atlanta’s Atlantic Station to this year’s two-day event, which drew more than 2,300 registrants from 35 states and 11 nations to the fourth-largest U.S. convention center. The 2015 summit, set for March 31-April 1, should pull even bigger numbers, space permitting. Page Siplon, executive director of the Georgia Center of Innovation for Logistics, part of whose Georgia Department of Economic Development job it is to play host to the summit, said the modest $50 registration cost isn’t the only reason for the impressive draw. “The formula for success is putting on a show that has value to the companies,” Siplon told the American Journal of Transportation. “The summit brings companies together, to help them compete and grow, showcasing what we do as a program every day. “Georgia is all about logistics,” Siplon said, citing the fact that Georgia is the only state with a logistics innovation center that serves year-round as a free supply chain consultancy. “Moving freight all over the world is something we help our companies do.” (For reception photos, see next page.)