Walmart seems to be facing some serious headwinds with rising wages and increased competition from internet retailers. Will be interesting to see how the retailer's woes affect the rails over the next year or two.
Its way to soon to count wal mart out. But wal mart like all if its us competitors imports a good portion of its inventory from the far east. These arrive in containers and shipped East.
I have also seen Walmart 53' trailers on fec intermodal trains in the past. I don't know how many if any wal mart DC's have have rail sidings.
ROBERT WILLISONIts way to soon to count wal mart out. But wal mart like all if its us competitors imports a good portion of its inventory from the far east. These arrive in containers and shipped East. I have also seen Walmart 53' trailers on fec intermodal trains in the past. I don't know how many if any wal mart DC's have have rail sidings.
The DC next to Corporate HQ (Bentonville, AR) has no tracks and is wall to wall Walmart trucks, have not seen so many trucks parked or docking under one ownership emblem.......anywhere else in the country.
My guess is they favor trucking exclusively because it is faster and more flexible and well........they own the trucking service outright.
Sure am glad I only work there occassionally as a contractor, that Corporate HQ is largely windowless and they used the same building materials, paint, etc they use to build a local Walmart.........it has the of effect working in a very large Walmart. It is mostly designed as a people warehouse with no real common areas to relax or enjoy oneself. I understand Sam Walton wanting to economize but he did so at the expense of employee retention in the areas where Walmart could really use smarter people to run it.
Not much point in bringing up Sam Walton now, he's been dead 23 years. What he'd do now versus what he did then is anyone's guess.
Considering how Walton insisted on stocking his stores with American-made products it's ironic how Wal-Mart (among others) has become a retail outlet for Chinese made goods. Would Walton have gone for that? Who knows?
I think the original post isn't about "Wal-Mart" internal logistics at all, it's mostly concerned with the traffic between ship terminals and wherever the containers are stripped of their 'oriental' bulk stock and apportioned as needed to the DCs. I do not know the percentage of IM traffic in different lanes that this involves, or how it would be reduced on a container-per-train basis for various lanes -- but there will be people reading this who do know.
3 of the local WalMarts in the Memphis area use containers for additional stock storage during holiday times. I do not know if these are 'rented' only as storage space or actually contain some mix of items shipped directly from overseas. I suspect the former.
The essence of the WalMart stocking model is that the POS system continually tracks the SKUs and prepares the necessary shipment makeup from the DCs. All these shipments will be via standardized truck (hence WalMart's interest in hybrid tractors and other forms of reducing pure-truck shipment cost over roads).
Likewise, as noted, most of the DCs themselves do not have direct rail access (and would need a reasonable subset of the equipment used at an intermodal terminal to access a stack train directly, if they did). I do not know whether the containers from the Far East make it as far as the DCs to be stripped, but if they did it makes sense for them to be on chassis with appropriate height, level, etc. to be docked same as vans. Many of the container chassis I see around here (one of the predominant markets for distribution centers) do not have those characteristics.
One of the great points of Sam Walton's management model is to standardize execution and minimize unnecessary capital cost. (Equally great is the idea of throwing money at places that produce greater economies or performance, notably POS technology in earlier years, but that's a separate concern here.) That heavily favors 'trucks everywhere' (especially where the company actually owns the trucks; compare this with the old Post Office intercity model where you'd see the saddest cheapest-bidder folks with the city-pairs daubed on their ancient trailers...).
Now, with increased fuel cost I'd expect to see increased use of TOFC ... if the overall cost, net of tractor and driver allocation etc., is in fact lower consistently, and QoS to assure the necessary close-to-just-in-time deliveries to or between DCs and to stores is adequate.
While I don't think much of the post-Sam management of the Wal-Mart enterprise (among other things, the smaller-grocery model would have been a whole separate line of profitability done right) it does have to be said that in many ways common sense would run that company at 90% efficiency or better, just with the policies and procedures formalized when Sam determined what to do. It doesn't take much more than operational common sense to determine the participation of rail in any part of how Wal-Mart does logistics ... or to 'correct' it without much latency when conditions change. (And if more folks in 'the family' took an interest in common sense instead of the ways they do things now, there would be fewer observed problems in execution... but that's another issue.)
Incoming Walmart freight is increasingly via container from port to distribution center (DC). When I first started in trucking, I noticed zero containers at the Walmart DCs I'd deliver to.
In my last year before heallth issues stopped me from driving, probably 25% of their inbound freight was containerized and some DCs were at higher percentages. Not surprising those DCs with higher container usage were in the northeast and Florida, where getting outbound loads was more difficult than other areas of the country.
Target is another retailer with a high utilization of containerized freight going into their distribution centers. And if you look at the location of Target's newest DCs, they are all close to major rail intermodal facilities, which allows the drayage companies to maximize the numbers of loads delivered by a driver in a workday.
My understanding of Wal-Mart's problems is (in no particular order): 1. Customer dissatisfaction with messy stores and too few checkout clerks. This in turn stems from diffficulty in hiring and retaining good personnel (in the stores) because of low wages. 2. Marketing confusion. 3. The ongoing decline in disposable income by their primary customer base. 4. Market saturation.
C&NW, CA&E, MILW, CGW and IC fan
Here's the Walmart distribution network A to Z.
http://www.mwpvl.com/html/walmart.html
One of the keys to Walmart's success has been its logistics efficiency. They keep the products moving until the retail customer goes through check out.
Walmart is also getting squeezed by Costco, Meijers and Target and also the various "dollar" stores.
schlimm My understanding of Wal-Mart's problems is (in no particular order): 1. Customer dissatisfaction with messy stores and too few checkout clerks. This in turn stems from diffficulty in hiring and retaining good personnel (in the stores) because of low wages. 2. Marketing confusion. 3. The ongoing decline in disposable income by their primary customer base. 4. Market saturation.
Last time I was in Bentonville their flagship store there.........Store Manager lost track of inventory with some shelf items going completely bare. It made the local news too because well.......this was their flagship store they show to everyone that visits the true Walmart operation. Had to be embarrassing to Corporate....and IBM as well since IBM has the point of sale contract that should produce accurate inventory at all times.
How the mighty have stumbled. Oh well, we'll see if they are able to recover.
1. Over half of WalMart sales are now groceries, where the price avantage over conventional grocery chains is largely gone. WalMart's smaller market sector was the only bright spot in Q2.
2. Bulk sales at its Sam's Club stores are losing market share to the larger Costco.
Just wondering, but I suppose Wal-Mart's troubles are coming from an influx of what are referred to as "interchangeable executives." These are people who understand business theory and ledger books all right, but don't understand the business they find themselves in.
If you're going to work retail, you'd better undertand retail, at least that's from my own experience.
Firelock76 Just wondering, but I suppose Wal-Mart's troubles are coming from an influx of what are referred to as "interchangeable executives." These are people who understand business theory and ledger books all right, but don't understand the business they find themselves in. If you're going to work retail, you'd better undertand retail, at least that's from my own experience.
+1
Yes. I have no idea if there has been an influx of outsiders to WalMart, but that move often leads to confusion about market niche, eg., Sears and J.C. Penney.
But I've always heard that a person with a business degree doesn't need to know how a particular business works to manage that business. You mean it isn't true?!!
You don't suppose that might be one of the problems with our economy in general for the last 20 or 30 years?
Jeff
Could be Jeff, could be.
Here's the thing: In the old days companys used to promote and advance from within. As a rising executive moved up through the ranks those above him always had a good look at him and how he performed. How well did he lead others? How well did he manage the responsibilities he was given, and most importantly did he understand the business?
I'm not saying the system didn't have it's flaws, if it was perfect we'd never have heard of "The Peter Principle." But on the whole, it worked.
The boss at a place I worked years ago had a lot of well-heeled aquaintances who were always giving him tips to "buy into this business, buy into that business." He always turned them down saying, "No thanks! I understand the business I'm in, I DON'T understand those others. I'd rather not get involved."
He had his faults, trust me, but he was smart enough to know what he didn't know.
Let me tell you, I always wondered what was meant by the old saying of someone being "Too smart for his own good!" Looking at the fiascos in business, banking, and government in the past few years I sure understand it now!
Wayne
jeffhergertBut I've always heard that a person with a business degree doesn't need to know how a particular business works to manage that business. You mean it isn't true?!! You don't suppose that might be one of the problems with our economy in general for the last 20 or 30 years? Jeff
An emphatic YES from me.
_____________
"A stranger's just a friend you ain't met yet." --- Dave Gardner
jeffhergertBut I've always heard that a person with a business degree doesn't need to know how a particular business works to manage that business. You mean it isn't true?!!
One quick glance at the sad state of corporations that once were giants of the industry should provide the answer. Today's method is run 'em into the ground and collect millions for doing so. No competence necessary.
Norm
Norm's comment made me think of Hostess. My God, what kind of idiots or combination of idiots could take a colossus like that, who's products were national institutions and practically sold themselves, and totally wreck it?
It just boggles the mind.
Firelock76 Norm's comment made me think of Hostess. My God, what kind of idiots or combination of idiots could take a colossus like that, who's products were national institutions and practically sold themselves, and totally wreck it? It just boggles the mind.
From what I've read about the Hostess situation it wasn't management. The employees refused to budge at contract time and talked themselves right out of their jobs.
Someone correct me if that is wrong.
Not totally wrong, however it's a "yes, but..." situation. There was enough blame to go around, but most belonged to management. You can find the whole sordid story with an Internet search, it's too complicated to go into here, but it kind of gets back to people getting involved with a business they know nothing about.
Considering how they made a ton of money selling off the product lines it was enough to make me wonder if that's what Hostess management, or more precisely the holding company that owned Hostess, had in mind all along.
Just so eveyone knows where I'm coming from on this, my thoughts mirror what the late conservative columnist James J. Kilpatrick (anyone remember him?) once said:
"I'm a conservative, and a capitalist, and business has no bigger friend than me, but they make it awful hard for me sometimes!"
http://fortune.com/2012/11/16/the-end-of-hostess/
http://www.theatlantic.com/business/archive/2012/11/whos-to-blame-for-the-hostess-bankruptcy-wall-street-unions-or-carbs/265357/
There was a lot more to the Hostess deal than what the wingnit sites stated. Many concessions were made by the unions, but in the end it was just a failed business. Why many believed that management had no hand in that failure is beyond me. I mean, come on... get real.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
While I agree that knowing the nature of your business is an asset at any level of management, promoting strictly from within can lead to a "We've always done it that way" mentality which can stifle needed change. Also, a top-notch line worker may not always be a good foreman, since management involves a different set of skills from being good at your job.
CSSHEGEWISCH While I agree that knowing the nature of your business is an asset at any level of management, promoting strictly from within can lead to a "We've always done it that way" mentality which can stifle needed change. Also, a top-notch line worker may not always be a good foreman, since management involves a different set of skills from being good at your job.
Johnny
Beware of folks like Ripplewood Holdings, who buy a lagging comany like Hostess cheap and then "go private." That allows them to do many things a publicly traded company cannot. And often that means piling up the debt, even in bankruptcy, while fattening their own coffers and then selling off what's left. It's sometimes called "vulture capitalism" for that reason.
Remember, I never said the old way of doing things was perfect, I said that most of the time it worked, and worked pretty well.
Also, sometimes a top-notch line worker, or any worker at any level for that matter, won't get promoted because those above him aren't sure they'll be able to find a replacement who's just as good! Another issue entirely...
schlimm Beware of folks like Ripplewood Holdings, who buy a lagging comany like Hostess cheap and then "go private." That allows them to do many things a publicly traded company cannot. And often that means piling up the debt, even in bankruptcy, while fattening their own coffers and then selling off what's left. It's sometimes called "vulture capitalism" that reason.
Beware of folks like Ripplewood Holdings, who buy a lagging comany like Hostess cheap and then "go private." That allows them to do many things a publicly traded company cannot. And often that means piling up the debt, even in bankruptcy, while fattening their own coffers and then selling off what's left. It's sometimes called "vulture capitalism" that reason.
Shades of Carl Ichan.
DeggestyA top-notch line worker will have the skills necessary for his work, and works well with other people--but it may be that he does not have the skills necessary for overseeing other people--and knows he does not have them. The truly excellent worker knows his limitations and will not want to be promoted above his capabilities.
To play devil's advocate:
That excellent worker probably didn't have all those skills when he started his current position. He/she learned them along the way. Same with management. You are not going to find someone who is a perfect fit with all the right skills out of the box.
Not everyone wants to go into management. But there's a lot of people that want to rise above their current capabilities.
Railroads have trouble finding decent managers from teh ranks because it is usually a pay cut for the first several years (and forced relocations). That and the working conditions, but I digress..
Norm48327 schlimm Beware of folks like Ripplewood Holdings, who buy a lagging comany like Hostess cheap and then "go private." That allows them to do many things a publicly traded company cannot. And often that means piling up the debt, even in bankruptcy, while fattening their own coffers and then selling off what's left. It's sometimes called "vulture capitalism" that reason. Shades of Carl Ichan.
Or Bruce Rauner's company before he became Illinois' guv.
I see a lot of complaining about capitalism on here, but name another system that has generated so much prosperity for so long for so many (until we chose to give our advantage away in stupid trade deals).
Sure, a corpse like Hostess attracts vultures. Why not? The value the vultures salvage from it is not just for private pockets but finds its way back into the economy. The way things have always worked here.
Hostess was supposed to stay on the same old track, overpaying people to make food the public is gradually getting too smart to eat?
dakotafredI see a lot of complaining about capitalism on here, but name another system that has generated so much prosperity for so long for so many (until we chose to give our advantage away in stupid trade deals).
But if those trade deals benefit the companies and shareholders, isn't that the essence of capitalism? Why complain about it? Can't have it both ways.
Maqybe we could bring back slavery or indentured servants. Get rid of that pesky labor cost.
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