Lowe’s Cos., the home improvement store chain, is assembling its own fleet of chassis to move containers to and from marine terminals.
Dean Tracy, director of import logistics at Lowe’s, said the company is paying for leases on 1,000 to 1,100 chassis from Flexi-Van that are being used to shuttle containers from ports to warehouses, and Lowe's plans to grow that fleet to over 3,000 chassis.
Tracy said Lowe's pays for the leases between trucking companies and Flexi-van and that maintenance is included in the leases.
The chassis are in a closed pool and used to move containers between container terminals and the Lowe’s regional distribution centers, transload centers, and so-called "coastal holding facilities" used by Lowe’s to absorb peak seasonal storage requirements and postpone allocation of imports to match varying sales rates throughout the country.
The company began the program over a year ago and so far the company is using the chassis in the Southeast to move containers between Atlanta, Jacksonville, Charleston and Norfolk, and it plans to expand it nationally.
Lowe’s moves about 120,000 40-foot containers annually (240,000 TEUs) - 60 percent move through ports on the East Coast and 40 percent through West Coast ports.
Tracy said the in-house fleet is currently handling about 30 percent of the company’s annual container volume, but that it plans to expand nationally and use it for 100 percent of its volumes.
Tracy said the company was motivated to lease its own chassis because it was unable to obtain a “single threaded solution” from container carriers as they began to divest themselves of their chassis fleets, a process that is on-going, but different companies are proceeding at different paces and they use a variety of chassis pools.
“I don’t know anybody who sits in my chair that can have 10 different solutions to on how to solve the chassis problem,” Tracy said.
Instead of obtaining door rates, the company now books cargo for delivery to U.S. ports and arranges inland transportation itself.
Tracy said the company plans to expand the program to include deliveries to and from rail ramps but said he did not know how that would work out since they “bring in more freight to the railroad than they can get out in a day.”
Speaking at the South Carolina International Trade Conference on Tuesday, Tracy said the program has been cost-neutral to his company and asked for help in “spreading this solution that we as importers can work with.”
He said carriers “seem to like it. Truckers definitely like it. They get a clean chassis.”
Tracy said the containers are not in a pool and that maintenance is done by Container Maintenance Corp., which he described as the largest chassis maintenance and repair business between Norfolk and Houston. He said Lowe's is not the intermodal equipment provider under the program.
The key to the program, he said, is “we keep turning the boxes. The key to this whole problem is turn time.”
“If turn time is 'x' days or less we are working; if turn time is 10-11 days it does not work for us,” he added.
Phil Connors, executive vice president of Flex-Van, said from a historical perspective what Lowe's is doing is unusual, and added the company "may be a leader."
He added that Flexi-Van has "a number of clients, beneficial cargo owners, come forward and asked us to assist them. There are several others we are working with and there are new models that are emerging."
Tracy also said Lowe's has found a way to make additional money by collecting corrugated boxes that are used to hold appliances and then exporting them to recyclers. - Chris Dupin