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Federated Tackles Lead Times

Delays at Ports, Rails May Add to Costs

New York — Federated Department Stores' product development group is chipping away at supply chain lead times one day at a time.

The Macy's Merchandising Group three months ago launched a new method for loading offshore containers — loading both by brand and by East Coast versus West Coast store destinations, according to Harry Frenkel, senior vice president of the group.

“We feel we've taken one to two days out of the supply chain,” Frenkel said last week during the Emmanual Weintraub Associates' supply chain conference here.

Macy's Merchandising Group, which oversees all aspects of Macy's $2.5 billion in private label programs across the store, currently imports 8,000 40-foot ocean containers annually — “and that's growing,” Frenkel said.

But backups at U.S. ports and deterioration of the U.S. rail system may ultimately add costs and affect service for the whole retail sector, he said. Ports in the United States “are just not as efficient as the ports overseas,” he said, adding that the emergence of super-sized container ships has further slowed the off-loading process.

“It's a long-range problem and a complex problem. With imports growing at 10 percent, it's just going to get worse,” said Harry Frenkel, senior vice president, Macy's merchandising group.

Peter Longo, Federated's president of logistics, the company's Atlanta-based transportation division is going to work aggressively with suppliers on ways to cut time and cost out of distribution as well.

“We need to get away from Federated coming to pick up (merchandise) five days a week,” Longo said, adding that there is not only “an imbalance” in the amount of trucks available, but, more critically, in well-trained drivers to put behind the wheel.

The logistics department is also going to begin working with vendors on sourcing tagging, which Longo characterized as “the next big opportunity for speed to market.”

In addition, the Macy's Merchandising Group recently began rolling out CRLs (customer return labels) on all private label merchandise. The process should be completed within a year, Frenkel said.

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