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In today’s world of inbound freight management demands, it is easy to get wrapped up in the hype over the Amazon effect. Essentially, Amazon’s continuous push for world domination is forcing shippers and carriers to rethink their strategies. However, another effect exists-the Walmart Effect. The Walmart Effect refers to the brick-and-mortar Giants capability to enact changes on a global scale through its vast network, including inbound freight management capabilities. For shippers, the Walmart Effect is tantamount to understanding how proactive management of inbound freight contributes to success in their organizations.

Why Have Retailers Overlooked the Walmart Effect?

The Walmart Effect is a complex topic. As the brick-and-mortar Giant has moved into the world of e-commerce, it has developed relationships with third-party resellers. Amazon has followed suit, but Walmart is taking its demands to a new level. In fact, Walmart is changing its delivery expectations for suppliers, requiring them to deliver goods on time and within Amazonesque timeframes. In other words, Walmart is moving full steam ahead toward becoming a strong competitor with Amazon, requiring two-day delivery on 87% of shipments, and suppliers using LTL shipping must hit a 70% on-time threshold. Unfortunately, this will require suppliers and vendors to redevelop their freight shipping systems and speed along production, which will naturally lead to an expectation among other reseller partnerships to except even faster delivery.

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The Walmart Effect on Inbound Freight Management Demands

Take a moment to consider inbound freight management demands. Effective inbound freight management rests on integrated systems and collaboration between suppliers and shippers. With Walmart investing in technology and preparation for online grocery pickup and delivery services, reports the Wall Street Journal, the effect on vendors will be extensive. As a result, the inbound freight management demands of Walmart will carry over into similar inbound freight management demands for other shippers. Ultimately, as Walmart moves to stay competitive with Amazon, shippers will see vendors and suppliers expect greater accuracy in dock scheduling, better control over inbound freight management and revisions to their existing inbound freight routing guides.

How to Stay Competitive and Take Advantage of Walmart’s Changing Narrative

Shippers looking to stay competitive with Walmart and Amazon can learn from the experiences of the retail giants. Some of the best practices to remain competitive and take advantage of Walmart’s commitment to a faster inbound freight management schedule include:

  1. Developing an infrastructure that contributes to better collaboration and communication throughout your supply chain network. This infrastructure might consist of the use of a dedicated transportation management system (TMS) to track inbound freight management and track data.
  2. Using real-time alerts to ensure shippers can track delivery dates, transit times, and estimated time of arrival. Real-time alerts provide greater visibility into your supply chain network and better dock scheduling and planning. As a result, the tension times and issues with unloading trucks should decrease.
  3. Use LTL consolidation to avoid capacity issues and keep freight costs under control. Unfortunately, capacity problems still exist throughout the industry, and the use of LTL consolidation can reduce the congestion in your yard, on your loading dock, and throughout your supply chain network.
  4. Utilizing backhaul opportunities to reduce fuel emissions and assessorial charges further. Taking advantage of backhaul opportunities eliminates the costs associated with hauling an empty cargo trailer, keeping inbound freight spend under control.
  5. Creating a dynamic inbound freight routing guide, considering changes within existing supplier and vendor networks, as well as giving vendors access to information to make the right decision for each shipper. Moreover, dynamic freight routing guide evolves with time, avoiding issues that arise from outdated information.


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The Big Picture

Walmart’s commitment to stay competitive with Amazon is having a profound impact on the industry. Both Walmart and Target shares have risen at least 12% over the last 12 months, reports Forbes, and Amazon shares have raised just over 6%. Traditional retail, namely brick-and-mortar retail stores, are becoming more focused on supplementing e-commerce, not just beating, and as Walmart and other major retailers look for ways to reduce costs and stay competitive, vendors and suppliers will naturally evolve. This evolution must carry over for shippers that also hope to remain competitive and maintain relationships with existing suppliers and vendors.