Dive Brief:
- The store confirmed in an email that Ashley Furniture’s trucking division is scheduled to purchase “certain assets” from Wilson Logistics and its affiliates.
- Wilson and Ashley Pacific Northwest, a subsidiary of Ashley Distribution Services, entered into a purchase agreement on November 22. It is scheduled to end this month.
- Ashley Furniture stated, “This acquisition is expected to expand ADS’s brokerage and distribution operations in the western United States.” The retailer’s private fleet, or ADS, consists of 3,700 trailers and over 900 tractors.
Dive Insight:
Increasing capacity in the western portion of the United States would be a smart strategic move for Ashley Furniture, given the extreme congestion at the ports of Los Angeles and Long Beach in California. Approximately 80 miles outside of San Pedro Bay, in Redlands, California, is where ADS’s trucks are headquartered on the West Coast.
The trucking company’s West Coast headquarters are in Washington state, one in Pacific, roughly a dozen miles from the Port of Tacoma, and another right across the border in Portland, Oregon, however Ashley Furniture did not disclose which assets it was purchasing from Wilson.
For certain shippers trying to steer clear of bottlenecks at ports in Southern California, the Northwest Seaport Alliance is a vital resource.
“We have been increasing the number of ports we use, but we still conduct a lot of business out of Asia through the LA and Long Beach ports. Logistics Plus’s customs brokerage manager, Gretchen Blough, stated, “We’ve been handling a lot of Seattle-Tacoma.
For months, shippers have been using this tactic. Ronald Widdows, CEO of FlexiVan, stated at TPM 2021 in March that some clients were thinking about using the Port of Seattle more frequently.
Compared to the same period in 2020, the Northwest Seaport Alliance handled 18% more imported TEUs from the beginning of January through October.
Widdows pointed out that inland-point intermodal transfers to the middle of the nation benefit greatly from shifting freight from ports in Southern California to Washington. According to the Northwest Seaport Alliance, around 70% of its cargo travels by rail and is intended for the Midwest, as of last year.
Having a private truck fleet also makes providing better customer service possible. The National Private Truck Council conducted a poll recently, and the results showed that shippers with private fleets cited it as their main motivation for having one. According to the report, companies aim to offer a unique value that is frequently evaluated by clients and assessed by management.
Maintaining a private fleet can be costly for shippers in terms of cash. Since trucking requires a lot of assets, some businesses may decide to turn their own fleet into a specialized service that is managed by a trucking company.
However, shippers who do have in-house trucking capability view it as a benefit, especially major shippers. For instance, a PepsiCo Foods North America executive highlighted Frito-Lay’s capacity to deploy staff and track customers wherever they go—a tactic that proved crucial during the epidemic when consumer behavior changed.
Another key concern is cost minimization. In an effort to reduce shipping costs, Dollar General said in March that it intended to increase the number of its own trucks. Following Q1 of this year, the business disclosed elevated carrier rates and gasoline expenses.
Issues pertaining to capacity, cost, and customer service all overlap somewhat. According to the National Private Truck Council’s research, “Those respondents who mentioned capacity explained that their private fleet provided control against capacity spikes, leverage from escalating rates, guaranteed levels of committed service, and control over the supply chain.”
