Transportation Cost Analysis of Dallas, TX, EDDS Vendor Consolidation
DEFENSE LOGISTICS AGENCY ALEXANDRIA VA
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Vendor consolidation under the Enhanced DLA Distribution System EDDS is the method of collecting small less-than-truckload LTL shipments from commercial vendors at or near origin and combining shipments to build larger LTL or truckload shipments for movement to the DLA supply depots for replenishment of inventory. Savings in transportation dollars are expected to accrue based on the difference in the cost of shipping many small LTL shipments direct to the depots versus collecting those same LTL shipments at a facility and consolidating them into one large LTL or truckload shipment for movement to the depots at lower volume prices. The savings should eventually be passed on to DLA in the form of lower item prices. Analysis showed that under the current method of operation at the Dallas, TX EDDS facility, an estimated savings of 85,024 resulted during the first 10 months of operation. However, during October, November, and December 1989 the Dallas EDDS site processed over 600,000 pounds monthly with an estimated monthly savings in transportation expenditures of about 35,000. The EDDS contractor is consolidating, on average, just over 2 days based on the number of shipments per month to each destination. There appears to be potential for some increased consolidation based on the days available for holding inbound vendor shipments.
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