Executive Briefings

How Much Will Carriers Lose Under Walmart's Plan to Take More Control of Its Transportation?

Walmart's fleet of 6,500 trucks and 55,000 trailers is used primarily for their outbound logistics for regional DC to store delivery. That won't change. The inbound logistics that they take over will be handled primarily by carriers, rather than Walmart's own fleet. While carriers have expressed concerns that major network changes may occur, Walmart has publicly stated that their goal is to work with the incumbent carriers as much as possible. They already use carriers for over 2 million shipments annually and have relationships with many of the carriers that their suppliers are currently using.

In typical Walmart fashion, they are driving a hard bargain with suppliers, whether via price cuts or allowances deducted from the invoice, to offset the transportation cost incurred by Walmart. Some suppliers are complaining that the price cuts that Walmart are asking for are nearly twice the current actual transportation costs paid by the suppliers. Kelly Abney, Walmart's vice president of corporate transportation, said: "There may be a disconnect when we walk into the room on what that cost might be. But we work collaboratively. As soon as a supplier shares the data, almost always those differences are quickly resolved." Maybe so, but it would not be surprising if some suppliers experience a net loss from this conversion.

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Walmart's fleet of 6,500 trucks and 55,000 trailers is used primarily for their outbound logistics for regional DC to store delivery. That won't change. The inbound logistics that they take over will be handled primarily by carriers, rather than Walmart's own fleet. While carriers have expressed concerns that major network changes may occur, Walmart has publicly stated that their goal is to work with the incumbent carriers as much as possible. They already use carriers for over 2 million shipments annually and have relationships with many of the carriers that their suppliers are currently using.

In typical Walmart fashion, they are driving a hard bargain with suppliers, whether via price cuts or allowances deducted from the invoice, to offset the transportation cost incurred by Walmart. Some suppliers are complaining that the price cuts that Walmart are asking for are nearly twice the current actual transportation costs paid by the suppliers. Kelly Abney, Walmart's vice president of corporate transportation, said: "There may be a disconnect when we walk into the room on what that cost might be. But we work collaboratively. As soon as a supplier shares the data, almost always those differences are quickly resolved." Maybe so, but it would not be surprising if some suppliers experience a net loss from this conversion.

Read Full Article