Inside look at transload operations
Tuesday, January 22, 2013
By Eric Kulisch
Yusen Logistics (Americas) and Pacer Distribution Services are two of the biggest providers of transloading services in the Los Angeles area, and visits to their facilities in Carson, Calif., illustrate the range of capabilities necessary to manage the high-velocity flow of import cargo and make sure it gets deconsolidated and accurately consolidated on trucks to the correct destinations.
An orchestrated mix of skill, well-executed manual processes and technology brings order to these seemingly chaotic cross-dock operations as workers move in every direction maneuvering boxes and pallets from one door to another.
Years ago transloading simply involved swapping the entire contents of international containers into fewer domestic trailers or containers, but technology now enables retailers to divert heterogeneous products at the carton level to multiple destinations.
Yusen Logistics, the logistics arm of Japanese ocean carrier NYK Line, has a unique campus and more real estate than most of its competitors. Located eight miles from the Los Angeles-Long Beach port complex, the facility has three warehouses totaling 678,000-square feet with 268 dock doors.
One of the three buildings on the 60-acre property is a narrow “L-shaped” structure that originally was a less-than-truckload terminal. Most warehouses in the region are large, square buildings, but the narrow footprint of an LTL cross-dock is ideally suited for transloading. It has almost the same number of doors as its sister warehouse next door that is more than three-times its size.
The main transload facility can process 1,700 TEUs per week. Overflow capacity in the adjacent warehouse enables the company to handle about another 2,600 TEUs per week. The highest throughput it achieved in a 24-hour period is 450,000 cartons.
A primary consideration for a successful transload operation is parking capacity. Yusen has 1,600 parking positions for containers and trucks and, if necessary, could lease an adjacent property with about 500 spaces.
It also has more flexibility to make infrastructure modifications because it owns, instead of leases, the property.
Most industrial property developers build warehouses as large as possible within an available footprint to maximize their rental revenue, but the facilities don’t have a suitable number of parking spots and dock doors for logistics companies with cross-dock operations. Yusen built two of the three buildings on the campus to meet its needs, John Hurst, the company’s vice president of operations, said.
“Our combination of doors, yard and proximity to the port is hard to replicate,” he said.
Transloading requires close coordination between customers, outsourced logistics providers and drayage companies, and the IT systems to manage the communication flow and track shipments.
At Pacer, the process typically begins with a retailer sending an electronic-data-interchange (EDI) transmission notifying the third-party logistics provider several days in advance about the number of containers on an arriving vessel. About three days out, the 3PL receives another message set with information on how the contents of each container are to be allocated among the retailer’s various DCs. Pacer arranges with independent truckers to have enough 53-foot containers or trailers delivered to its yard to handle the arriving merchandise. It tracks the containers at the terminal and dispatches truckers to pick them up after clearing U.S. Customs. Managers also have to make labor plans to optimize the number of workers for the expected volume.
Dock workers unload the packages and scan the label or UPC code to identify each one and, depending on the customer requirements, apply bar-coded sort labels with the embedded routing instructions before moving the boxes to the outbound doors. Extra labels at the end mean there is a shortage and extra cartons mean an overage in the order. Sort personnel at the doors scan each carton with a radio-frequency device and load the packages into waiting containers. When the trailer door is closed an electronic trailer tag is scanned, immediately associating every carton inside with the conveyance. The system automatically creates an outbound bill of lading and packing list, as well as an advance shipping notice showing the quantity of cartons received and loaded by purchase order and stock keeping unit. Upon arrival at the destination warehouse, personnel scan each carton to verify order accuracy.
Information systems are critical to ensure stuffing accuracy, which becomes more complicated as the number of stock-keeping units (SKUs) in an inbound container and number of outbound doors increases.
Pacer uses a warehouse management system from LogiMax built for 3PLs that has an added cross-dock module to manage unloading, product confirmation, picking and store allocation, Michael Stark, president of Pacer Distribution Services, said.
Yusen’s process is similar, but the way it assigns incoming orders to outbound trucks is manual. Customer sorting instructions come via EDI to Yusen’s proprietary transload system, but huge stacks of paper with each carton’s assignment have to be printed and rolled out to the inbound bays to guide the packing process. The necessary quantities are unloaded and run to the appropriate outbound door, where loaders verify the carton count, scan the load slip and scan the barcode on the trailer. The transload system then sends an alert to the Zebra Technologies yard management system notifying drivers that the container is ready to be pulled out and to retrieve an empty to take its place.
The company plans to complete installation of a paperless scanning system in the first quarter, Hurst said. Employees will enter the container number and the system will pull up the allocation breakdown. Cartons will be scanned as they are unloaded and the DC instructions will be displayed on computer screens.
Yusen and Pacer differ in how they manage the physical flow of goods through their facilities. At Yusen, inbound containers are unloaded in the middle of the building. Bundles of cartons going to the same destination are moved by forklifts with clamps, while small quantities are loaded in push carts and wheeled to the outbound door. High-volume distribution centers have doors closest to the inbound doors.
Yusen uses several metrics, such as time from availability of container to pick up and time from devanning to trailer dispatch, to measure its level of service.
Hurst said Yusen is exploring several different options for a high-tech automated package handling system in its campus. The upfront capital investment of $15 million to $20 million plus limitations on irregular-size products that can ride on conveyor belts make the decision complicated, he said. Manual operations, he added, give the company flexibility to handle a wide array of clients.
A regular Pacer loop might consist of three receiving doors next to five loading doors. Forklifts move heavy goods, but personnel mostly rely on waist-high, non-automated conveyors with ramps placed within the container to manually slide cartons from one door to another. The 3PL can sort to 13 outbound locations at a time.
At peak configuration, Pacer has its receiving doors on each end of the line and the doors for outbound DCs in the middle. Pacer will add an automated line running the length of the Carson facility if negotiations on a contract with a large retailer are finalized, Stark said. The configuration would consist of two inner loops plus an automated outer loop that merges with the manual lines. The system is viable because all the packages for that customer are four to six cubic feet, he said.
Very little freight loaded by each 3PL goes out palletized because customers want to maximize trailer cube. In a direct-to-store model with products pulled from the warehouse, pallets are used to ease handling and because there are multi-stop, less-than-truckload deliveries.
Pacer Distribution, a unit of asset-light intermodal-transportation and logistics services provider Pacer International, is currently reloading about 40 ocean boxes per day, handling about 15,000 cartons in a two-shift operation. The Carson facility has the capacity to handle double that amount of trailers and up to 35,000 cartons per day using a 24-hour shift and all 24 doors, company officials said.
The 3PL has two other facilities in Southern California.
Both companies retrieve most of their customers’ containers from the port at night to avoid the PierPass fees charged during the day to reduce congestion at terminal gates and on the highways. When the truck arrives at Yusen’s facility, a transponder is affixed to the container so the yard management system knows its location.
Having a fluid yard is the most critical aspect of a transload operation, Yusen officials said.
“The yard can bring an entire operation to a standstill if it’s not properly managed,” Steve Frasco, the general manager of the Carson campus, said.
Good yard management is also important to prevent the loss of trailers and make sure shuttle truckers take an empty trailer after dropping off a box.
Yusen and Pacer Distribution both outsource trucking. Containers are shuttled to and from their facilities by trucking companies with which they have relationships or by draymen under contract to some retailers.
A control tower monitors every piece of equipment entering the Yusen facility and serves as the 24/7 single point of contact for customers and truck drivers about their loads. The Web-accessible IT system used in the tower applies rules issued by the customer about which trucking companies to use for deliveries to particular DCs. The tower also monitors empty and loaded-trailer switching, dwell time, whether outbound tractors are matched to the proper trailer and a host of other performance measures. At all five gates, the company handles 2,000 to 3,000 transactions per day of international and domestic equipment for transloading and traditional pick/pack service.
In an age of lean inventory management and just-in-time supply chains, routing the order on the fly “so it never touches the ground is really how you want to move freight today,” Stark said.
Pacer officials expect more companies to shift to transloading from short-term storage models because the inventory savings far outweigh the additional labor involved. One large retail customer downsized from six catalog centers to three after implementing a transload strategy, Jose Tobias, vice president of distribution services, said.