TOP 50 NORTH AMERICAN SHIPPERS - Focused on inventory turns, Dollar Tree chooses Port of Savannah

By: | at 07:00 PM | Channel(s): Ports & Terminals  

By Karen E. Thuermer, AJOTDollar Tree, a leading discount variety store chain, is a high profile customer for Georgia Ports Authority. Like many companies, Dollar Tree operates a regional distribution center in the Savannah area that also acts as a deconsolidation location.
“We trans load merchandise destined to our Olive Branch, MS, distribution center facility,” reveals Stephen W. White, chief logistics officer and senior vice president of Dollar Tree Stores, Inc.
Each year the company imports approximately 5,000 feus through the Port of Savannah. From this location, the retailer services its approximate 450 retail outlets in the Southeast United States (Florida, Georgia, South Carolina, North Carolina, the Eastern regions of Alabama and Tennessee).
The company works with four primary steamship lines, all of which are under confidential contracts. Dollar Tree executives focus on all components of the supply chain and, as a result, have steep requirements when negotiating with these carriers.
“You have to remember, our stores sell everything for $1.00,” says White. “Cost is very important to us. Cost, service, and space availability are top requirements. We are very focused on inventory turns and when merchandise needs to be in the stores.”
With transportation costs escalating, companies are especially scrutinizing and reviewing all aspects of the supply chain.
“In our case, cost is particularly important because for 20 years we have not raised price points in our stores,” White explains. “We have sold everything for $1.00 for 20 years.”
Dollar Tree offers a vast array of products including housewares, seasonal goods, food, toys, party goods, personal accessories, books, candles and more.
Although many steamship lines are looking to offer faster service, White maintains that consistent service is an important element to satisfying corporate needs.
Location advantagesSavannah works well as a distribution and deconsolidation location for Dollar Tree. For one, the port continuously offers a diversified steamship line portfolio. Sailings as fast as 22 days from Asian-based ports and nine days from Europe to Savannah make it possible for retailers to realize advantageous shore-to-door transits. Savannah’s port facilities are also located in close proximity to two interstate highways. Consequently, over 100 trucking companies service the port.
“From a logistics standpoint, the location is ideal because Interstate 95 is so close to the Port,” White says. “Our distribution center is about one-half mile from Interstate 95 and eight miles from the port. This fits perfectly.”
Two Class I railroads also provide convenient connections to key consumer concentrations nationwide. Plus, local and state governments support job creation and workforce development in critical logistics skills. Consequently, the port has earned the reputation “America’s Retail Port.”
White gives the Port of Savannah rave reviews. “The turn times at the gate are good, and we have great communication with the port,” he says. “The port is very pro-active.”
White should know. It’s been nearly six years since Dollar Tree opened its distribution center in Savannah. The retailer is headquartered in Chesapeake, VA.
Growth modelDollar Tree also ships via Virginia’s Port of Norfolk. Norfolk could have continued to serve the company well except for the fact that corporate goals called for growing the retailer.
“Five or six years ago we decided we needed to build a distribution center in the Southeast,” White says.
The company embarked on a site search predicated on the location of Dollar Tree stores in the Southeast and forecasts for store growth. The distribution center was slated to become the company’s fifth DC.
“When we did our analysis, the model indicated that we should actually locate the distribution center in Gainesville, FL,” White reveals. “But we import close to 50% of what we sell. When we looked at the import component of the analysis, it dri

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American Journal of Transportation