Transload Insights: Better Flexibility and Cost Savings
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2 Transload Insights: Better Flexibility and Cost Savings John Paul Jimenez, The Home Depot Don Esterbrook, NorthWest Seaport Alliance Rob Brown, Union Pacific
3 Don Esterbrook, The Northwest Seaport Alliance
4 Significant Changes in the Industry Shipping Alliances Independent 15% Hyundai 2% Zim 2% Hamburg Süd 3% Wan Hai 1% PIL 2% Global TEU Capacity % All others 7% Maersk 15% 2M Alliance - 30% G6 Alliance - 18% NYK 3% APL 2% MOL 3% OOCL 3% 1 85% Of capacity controlled by shipping alliances 18.6 Million TEUs MSC 15% Hapag-Lloyd 4% CMA CGM 9% O3 Alliance - 16% CHYKE Alliance - 19% K Line 2% Owned, Chartered and Ordered Source: Alphaliner Dec 2015 Yang Ming 3% Hanjin 3% COSCO 5% Evergreen 6% UASC 3% CSCL 4%
5 Chassis Availability Vessel Industry Impacts CONGESTION = Reduce service efficiency, reliability & consistency Gates Intermodal Yard
6 How Our Gateway is Addressing These Service Delivery Challenges Efficiency Reliability Consistency
7 NW Seaport Alliance Progress Report Executive Advisory Council Infrastructure Operations Service Center Data sharing and visibility
8 Operations Service Center The Operations Service Center has been established with the mission of providing best in class service delivery and customer care to our customers and stakeholders. Key Initiatives PNW rail strategy Service delivery solutions for all modes of access Enhance visibility of shipment status Improve gateway performance through mutually agreed metrics
9 Transload Service Value Proposition IMPROVED Service efficiency, reliability & consistency Peel off piles for local delivery Associated speed gates & extended hours Equipment turn time Rail reliability
10 Transload Advantage 40 ISO container transload into a 53
11 Rail Transit Advantage
12 4 th Largest DC Center in the USA Ample space with room to grow Over 260,000 sq. ft. of active industrial space in the Puget Sound, much of it for warehousing and distribution 3.2 million sq. ft of new industrial space in the Puget Sound currently under construction or coming on line 136 warehousing and storage companies in King & Pierce County 30 transload facilities in close proximity of both Ports
13 A Retailer s Perspective: John Paul Jimenez, The Home Depot
14 Agenda The Home Depot Overview International Logistics at The Home Depot Why Transload? Network Overview KPIs and Challenges Product Examples
15 The Home Depot Founded in 1978 World s Largest Home Improvement Retailer 2,273 Stores US 1,977 Canada 182 Mexico K+ Associates 40K+ Store SKUs, 800K+ Online SKUs FY14 Sales $83.2B
16 The Home Depot
17 The Home Depot Values Based Organization focused on taking care of associates, giving back to communities, and environmental stewardship Inverted pyramid structure focused on customer service and store support
18 FEU International Logistics at THD 132K FEUs in 2015 Forecasting 9% growth in 2016 Import penetration at ~10% Import Volume 160, , , , , , , , , ,900 80, FEU
19 International Logistics at THD Origin Factory Origin Operations Origin Port On the Water Destination Port Destination Customs THD Facility 17 Countries 1,000+ Factories ~6K import SKUs 3 Origin Cargo Managers 10 CFS Facilities 4 Overseas Sourcing Offices 65 Origin Ports 250 Terminals 9 Global Ocean Carriers 1 Air Freight Broker 15 Ports Of Entry (US/CAN/MEX) ~125 Terminals 8 US Container Management Companies 2 Expedited Freight Service Providers 6 Railroads 3 Customs Brokers 4 Transload facilities 18 RDCs 12 SDCs 2,200+ Stores
20 2015 Container Volume by Destination 74% of THD import volume 6% 11% 1% 20% comes in at the four corners 1% 2% 1% 4% 4% 23% 4% 20% 1% <1% 1%
21 Transload Overview Transloading: The process of transferring a shipment from one mode of transportation to another Transloading facilities are designed with the intent of minimizing handling and much more
22 Why Transload? Optimal Value Termination Final Demand IB Delayed Local to Mode OB Added Aggregation Fulfillment Load Allocation Selection of Ocean Ratio Services Bill
23 Transload Service Area Map Sumner, WA Servicing 8 DCs North Bergen, NJ Servicing 11 DCs South Gate, CA Servicing 11 DCs Pooler, GA Servicing 7 DCs
24 Transload KPIs Level of Service (Lead Time) Outbound Cube Utilization Accuracy (ASN vs. Detailed Receipt at Final DC) Voice of Customer
25 Transload Challenges Port/Drayage Performance New SKUs High SKU Count/High Splits Demand Variability (Industry & THD) Outbound Equipment Availability Systems/Integration
26 Product Examples The Good High Cube Flush Mount Lighting Low Weight Stackable Able to be moved with MHE
27 Product Examples The Bad Low Cube Paint Removal Tools High Weight Needs to be Palletized to Cross-Dock Hand Unstack
28 Product Examples The Ugly No Words Needed
29 Thank you
30 Social Q&A
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