Dive Brief:

• Ashley Furniture's trucking subsidiary is set to buy "certain assets" from Wilson Logistics and its affiliates, the retailer confirmed in an email. The purchase agreement between Wilson and Ashley Pacific Northwest, an affiliate of Ashley Distribution Services, was made Nov. 22. It is set to close this month.
• "This acquisition is expected to expand ADS's brokerage and distribution operations in the western United States," Ashley Furniture said.
• ADS is the retailer's private fleet, which comprises more than 900 tractors and 3,700 trailers. Wilson's fleet comprises the Peterbilt 579 and the Freightliner Cascadia. Wilson also ordered Locomation's Autonomous Relay Convoy technology to be equipped on a minimum of 1,120 of its tractors, with deliveries originally set to start early next year.

Dive Insight:

It can be a capital-intensive burden for shippers to maintain a private fleet. The asset-heavy nature of trucking can be a deterrent, and some business even opt to convert their private fleet into a dedicated service run by a trucking company.

But large shippers with in-house trucking capabilities consider them an advantage. A PepsiCo Foods North America executive, for example, cited Frito-Lay's ability to allocate resources and follow consumers wherever they are — a strategy that became key during the pandemic as buying habits evolved.

Having a private truck fleet also lends itself to improved levels of customer service. It's the primary reason shippers with private fleets say they have one, according to a recent survey by the National Private Truck Council. Businesses want "to provide a differentiated value that is often tangibly rated by customers and measured by management," the report said.

Cost control is also a priority. Dollar General said in March it planned to expand its private truck fleet to help mitigate transport costs. After Q1 this year, the company reported high carrier rates and fuel costs.

"Customer service, cost and capacity-related issues all overlap to some degree. Those respondents that mention 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," the National Private Truck Council said in its report.

Expanding its private fleet in the western part of the U.S. would be a strategic move for Ashley Furniture, with severe congestion at the ports of Los Angeles and Long Beach in California. ADS' trucks on the West Coast are based in Redlands, California, some 80 miles outside San Pedro Bay.

Though Ashley Furniture didn't give details about which assets it was buying from Wilson, the trucking firm's West Coast offices are in Washington state — one in Pacific, about a dozen miles from the Port of Tacoma — and just across the border in Portland, Oregon.

The Northwest Seaport Alliance is a key area for some shippers looking to avoid clogs at Southern California ports.

"We do a lot out of Asia with the LA and Long Beach ports, but we've been expanding the different ports that we use. We've been doing a lot of Seattle-Tacoma," said Gretchen Blough, customs brokerage manager at Logistics Plus.

Shippers have been employing this strategy for months. During TPM 2021 in March, FlexiVan CEO Ronald Widdows said some customers were considering greater use of the Port of Seattle.

From the beginning of January through October, the Northwest Seaport Alliance has handled 18% more imported TEUs than the same period in 2020.

Widdows noted switching cargo from ports in Southern California to Washington is particularly handy for inland-point intermodal moves to the middle of the country. Some 70% of cargo that comes to the Northwest Seaport Alliance is destined for the Midwest and moves via rail, the organization said last year.