August 21, 2005

The Largest Distrbution Center

Traffic World has an article($$) which talks about Wal-Mart now having the largest distribution center devoted to a single company:

Wal-Mart Stores is not known for doing things in small degrees. When the world's largest retailer launched its new inbound distribution center outside Houston this summer, it opened a new front in its ambitious direct import strategy that reverberated far beyond the immediate area and likely will be felt well outside Wal- Mart's own operations.

At 4 million square feet, the complex in Baytown, Texas, about 25 miles from Houston, is the largest distribution center in the country devoted to a single company, logistics industry experts say.

It's a site so big - 18 football fields, by one measure - feeding a supply chain so large that the impact of boxes hitting the floor can be felt in the Panama Canal, at California ports and even across the Pacific Ocean.

This is part of an overall strategy to link imports with key distribution links:

"The sheer size of Wal-Mart, they have the ability to force changes in the industry," said Satish Jindel, president of the SJ Consulting Group, a Pittsburgh-based transport consultancy. "They're letting the people in (the ports of) L.A. and Long Beach know, 'You don't control how we bring shipments into this country.'"

"The strategy is not unique to Wal-Mart," said Steve Banker, supply chain service director at the Boston-based ARC Advisory Group. "But 4 million square feet, that's a big statement."

...

For Wal-Mart, the distribution center is part of a larger strategy to fine-tune its supply chain pipelines to match its sourcing from outside the United States with distribution to its sprawling network of stores in this country.

Under what Wal-Mart calls its "direct import" plan, more volume is being spread to defined gateways, including Charleston, S.C., Los Angeles-Long Beach and Houston, where goods are staged briefly before moving to regional warehouses closer to final transport to stores.

Wal-Mart would not comment for this story, but in announcing the award a major logistics contract for the Texas site to UTi Worldwide in February, Tim Yatsko, vice president of direct imports for Wal- Mart, said the facility "will serve our Central U.S. distribution centers as part of our expanding direct import network."

There are some other reasons Wal-Mart may expand this further besides the congestion at West Coast ports:

Labor should also take note, Jindel said. By selecting a right- to-work state for its biggest new distribution center, Wal-Mart is signaling it is ready to work around logjams created by labor problems. However, he said the company could be opening itself to a backlash if unions try to organize dockworkers and thousands of other employees expected to take jobs as the region develops.

Posted by Bob at 4:06 PM

January 26, 2005

WM Distribution Center Welcomed

Gas City will be the site of a new WM distribution center, but it could have been in any one of 18 other locations, except that Indiana killed its "inventory tax":

Eckerle said that recommendation was among the motivators for Grant County to become the first Indiana county to get rid of the inventory tax, which had the potential to cost a distribution center a considerable amount of money....

"Mr. Mullis wrote a letter saying that it was a really good idea, so we had folks go about doing that," Eckerle said. "He wrote that the inventory tax was a true impediment to Indiana being a good location for logistical centers because Indiana was one of the few states that had an inventory tax...."

Then Mullis again visited the site in question. It was at that point that Eckerle knew Gas City had the edge.

"He was impressed that the community had done everything that he said they should do," said Eckerle, naming the repeal of the inventory tax and putting a traffic light at the Ind. 22-County Road 500 East intersection as examples. "A lot of this business is basically about listening to customers and delivering what the customer wants, and he was seeing that we were doing all that...."

I don't think WM's antagonists would be welcome in this crowd:
The meeting was interrupted repeatedly by applause from the crowd, including a standing ovation for Leach. Standing before the group, Leach held a glass of sparkling grape juice and said the events on Tuesday brought him as close to speechless as he gets.

"This is going to be the beginning of a new beginning for our whole county," said Leach, who spent Monday evening purchasing all but one of the Wal-Mart gift certificates for auction at the Indiana Wesleyan University Telesale. "If we've got 600 jobs out there, the great majority are going to be people living in Grant County today."

Among the comments from the almost 200 residents and well-wishers on hand were questions about when construction would begin, how officials planned to handle increased traffic near the site and what type of corporate neighbor Wal-Mart would be.

Officials hope the needed zoning and building approvals and the annexation of about 150 acres into Gas City will be complete in time for a September 2005 construction start, said Joe Certain, Gas City's city attorney. As he answered the question, the comment "Tomorrow works into my schedule" came from the crowd.

"This is an investment the likes of which we haven't seen for many, many years," Certain said.

Although she worried about the amount of traffic 600 Wal-Mart employees would create on Ind. 22 and 500 East, MaryEtta Ruley marveled at the size of the company's investment.

"We're talking almost 1 million square feet," said Ruley, who lives on 500 East. "The size of the investment, the jobs. This is not just the start. This is the big thing."

Before the meeting was adjourned, county resident Michael Duke thanked the assembled boards for their work on the project.

"We needed to win here for the county, and this is a very good one," he said. "It will bring good quality jobs into the community."

Posted by Kevin at 10:25 AM