Walmart launches LTL truck consolidation program for suppliers

Walmart is simplifying inbound logistics and reducing costs for suppliers that prepay for freight service by enabling them to more easily combine less-than-truckload shipments into full truckloads at automated consolidation points that feed the company’s regional distribution centers.

The new prepaid consolidation program allows suppliers that leverage Walmart’s supply chain network to merge shipments under a single national purchase order to one location, which combines the inventory and ships it to the company’s 42 regional distribution centers, creating more transportation efficiency, Walmart (NASDAQ: WMT) said in a news release on Tuesday.

Vendors will benefit from the streamlined consolidation program through cost savings on pallets and labor, plus improved order cycles and sales quantities as Walmart takes advantage of the added flexibility to place a supplier’s product in the correct location based on customer demand, Walmart stated.

Suppliers experience longer lead times and higher costs when they ship merchandise to Walmart facilities, but can’t fill an entire trailer. Under the previous process, suppliers might create up to 42 purchase orders, pick 42 cases and load 42 separate pallets onto trucks for distribution to each regional distribution center.

Now, those cases can go on a single pallet with one purchase order. Walmart said it is using new automation technology to optimize inventory allocation across its DC network. The program will expand in phases and participation will be prioritized based on volume alignment and capacity expansion.

“We’re focused on making our supply chain simpler, faster and more efficient for suppliers, while also keeping products in stock for our customers,” said Mike Gray, senior vice president of supply chain at Walmart U. S.

“By strengthening our first-mile capabilities, we’re reducing complexity and keeping goods moving, so we can deliver even more value every day.” The prepaid consolidation program is designed to make shipping more convenient for suppliers because Walmart manages the process, which means suppliers don’t need to change their prepaid freight terms.

Walmart said vendors can move shipments directly through Walmart or work through company-approved third-party logistics providers such as C. H. Robinson, Hub Group and RJW Logistics. Suppliers pay a transparent, price-per-case rate that covers handling at the automated consolidation center and outbound transportation to Walmart’s regional DCs.

Pricing varies by region, but there are no additional markups applied by participating providers to services performed by Walmart. By consolidating inbound shipments and allocating inventory across its regional DCs, Walmart said it improves the consistency of product flow and reduces variability.

That makes replenishment more precise and better ensures products are always in stock. Click here for more FreightWaves/American Shipper stories by Eric Kulisch. Write to Eric Kulisch at ekulisch@freightwaves. com.

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