Everyday Low Prices Could Get Even Lower
May 21 (Bloomberg) -- "Wal-Mart Stores Inc., the world’s largest retailer, is seeking to take over U.S. transportation services from suppliers in an effort to reduce the cost of hauling goods. The company is contacting all manufacturers that provide products to its more than 4,000 U.S. stores and Sam’s Club membership warehouse clubs, said Kelly Abney, Wal-Mart’s vice president of corporate transportation in charge of the project. The goal is to take over deliveries in instances where Wal-Mart can do the same job for less and use those savings to reduce prices in stores, he said.
“It has allowed our suppliers to focus on what they do best, manufacturing products for us,” Abney said in a telephone interview yesterday from Bentonville, Arkansas, where Wal-Mart is based. “With lower costs usually comes increased sales.”
Under the program, Wal-Mart is increasing the use of contractors, as well as its own private fleet of trucks, to pick up products directly from manufacturers and transport the goods to its distribution centers and stores. The retailer currently moves most goods only from its distribution centers to stores. The plan allows Wal-Mart’s fleet of 6,500 trucks and 55,000 trailers to carry more per truck and improve on-time delivery rates, said Leon Nicholas, a director at consulting firm Kantar Retail. Wal-Mart would also have more sway in negotiating fuel prices."
MP: Another example of why Wal-Mart is the world's leading retailer and how its relentless pursuit of supply chain efficiencies and other cost-cutting measures allows Wal-Mart to keep lowering prices to consumers, and in the process make millions of Americans better off. In Wal-Mart's world, the consumers reign as the kings and queens, and there's probably no better example of consumer sovereignty than Wal-Mart.
Thanks to Norman Berger for the Wal-Mart link.