BENTONVILLE, Ark. — Retail giant Wal-Mart Stores Inc. is looking to take over more of its supply chain, thereby reducing the cost of goods at its stores and passing the savings on to consumers.
Bloomberg reported that the company is contacting manufacturers and seeking to provide its own transportation in instances where Wal-Mart can do the same job for less, according to Kelly Abney, Wal-Mart’s vice president of corporate transportation in charge of the project.
“It has allowed our suppliers to focus on what they do best, manufacturing products for us,” Abney told Bloomberg in a recent telephone interview. “With lower costs usually comes increased sales.”
The retailer currently moves most goods only from its distribution centers to stores. But Wal-Mart is increasing the use of for-hire carriers as well as its private fleet to pick up products directly from manufacturers and transport the goods to its distribution centers and stores, according to the Bloomberg report.
The price cuts Wal-Mart is seeking are twice as much as the cost for transporting goods in some cases, officials from two suppliers told Bloomberg. In two instances, Wal-Mart asked for a 6 percent reduction in the price it pays for products based on its own cost calculation, while suppliers estimated the actual expense was equal to about 3 percent, the people said.
“There may be a disconnect when we walk into the room on what that cost might be,” Wal-Mart’s Abney said. “But we work collaboratively. As soon as a supplier shares the data, almost always those differences are quickly resolved.”
Abney told Bloomberg that some manufacturers already have shifted their deliveries to Wal-Mart.
Bloomberg also points out that Wal-Mart is using Mike, a truck driver, who touts the company’s transportation system, saying packing fuller loads has cut fuel costs and retail prices.
Kevin Jones of The Trucker staff can be reached for comment at firstname.lastname@example.org.
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