CALIFORNIA PORTS 2005 - Best Buy in Rapid Growth Mode

By: | at 08:00 PM | Channel(s): International Trade  

By Karen E. Thuermer, AJOTThink of Best Buy Co. and all sorts of technology and entertainment goodies automatically come to mind. This innovative Fortune 100 growth company certainly strives to create superior customer experiences. Some 39% of its business is in consumer electronics and 34% is in home office equipment. Software and entertainment make up 21% of its sales mix, while the remainder is appliances.
Through more than 830 retail stores across the United States and in Canada, the company is now on the rampage to operate at least 1,200 superstores in North America, up from its prior growth plan of 1,000 superstores.
Best Buy currently operates 838 stores in North America and typically opens 75 new stores per year in that footprint.
To meet the growing needs of the retailer’s expansion in the West, in 2003, Best Buy expanded its existing 600,000-square-foot West Coast Distribution Center in Dinuba, CA by 442,163 square-feet bringing it to over one million square feet. The distribution center facility was originally constructed in 1999.
The purpose of the expansion was to support the delivery of technology and entertainment products to Best Buy stores in California, Nevada, Arizona, Montana, Oregon and Washington and help supply the retailer’s future expansion in the Northwest.
The facility features 38-foot clear-height ceilings, state-of-the-art HVAC and security systems and an 8,000-square-foot shipping and receiving area served by 160 dock doors.
Tim Kuckelman, director of distribution for Best Buy in California, explains that the distribution center was necessary when the retailer decided to make a big entry into the San Francisco market.
“From here we can serve Denver, CO and all markets along the US Pacific Rim,” he says. “It is only a four hour drive to Los Angeles and four hours to San Francisco from here. Seattle can be reached within two days as can Denver. We consider those reasonably short trips. We do split loads to those markets.”
Kuckelman reveals that freight flows from the ports of Oakland and Long Beach makes Dinuba a convenient location.
“Plus, the cost of land and labor is affordable here,” he says.
To ship the freight from the distribution center to Best Buy stores, the company operates a dedicated fleet of trucks.
All products are purchased by Best Buy’s buyers in Minneapolis. Products sold under the Toshiba and Mitsubishi label are assembled in the United States, whereas products manufactured by Sony are shipped by vendors from overseas. Most of those vendors are located in Asia.
To help transport the products from the seaports, Best Buy utilizes BNSF Railway Co., which provides intermodal transportation service through Best Buy’s truckload carrier partners and third-party logistics providers. Best Buy Co. recently recognized BNSF’s service by presenting the rail company with its Quality Partnership Award at a Best Buy Annual Carrier Conference in July. BNSF was the only railroad presented with an award at the conference.
Criteria for the award included on-time performance, technology, equipment condition, customer service, account management and assistance with projects and special needs.
“Best Buy is one of BNSF’s fastest growing intermodal customers and we look forward to strengthening our relationship further with Best Buy by continuing to provide transportation products that deliver reliable and consistent service,” says Steve Branscum, BNSF group vice president, Consumer Products.

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American Journal of Transportation