Long Beach, California USA
April 14, 2008
James Gill, VP Sales
Recently, I had the opportunity to find out more about Cal Cartage, a highly respected deconsolidation specialist based in Long Beach, CA.
My tour guide was Jim Gill, vice president of sales at Cal Cartage who has been employed there for 43 years. He is 69 years old and sharp as a tack.
Gill took me on a tour of Brookvale International warehouses and the major deconsolidation center in Wilmington, CA. In addition to Brookvale, Cal Cartage has Cal Cartage Express (intermodal carrier ramps, 30 drivers), California Multimodal LLC (275 drivers) and K & R Transportation (250 owner-operators involved in port drayage). California Multimodal is the primary distribution operation. It provides service to and from Mexico with owner-operators.
Cal Cartage was a Teamster operation in the old days. Because of union related issues, Cal Cartage’s primary owner, Bill Curry, has tried to keep his companies out of the public eye. Little effort has been made at publicity and Cal Cartage has operated below the radar screen. Gill said that this costs them at times – IBM referred to them as an “unknown”.
Its current revenues are over $300 million a year (40% warehousing and 60% transportation). Profits are good and Curry pays significant bonuses to managers. Each distribution center (DC) has an incented manager who is responsible for their operation’s profitability. Also, all top managers get a large 401-K contribution from Cal Cartage.
The managers I met were engaged and very capable. They run a lot of “A” operations with large name customers and the good compensation system has had an impact.
Our review is detailed below:
At the Long Beach Brookhaven Warehouse, Puma Apparel is the anchor customer with 22,000 stock keeping units (SKUs). There is heavy piece picking and order fulfillment. Dell, Mohawk Tile, and Kohl’s fill out the space which totals 200,000 sq. ft. Brookhaven owns this facility and the racks. (An effort is underway to bring Puma Shoes on board.)
About a mile from the first warehouse is a dedicated contract warehouse. It is 250,000 sq. ft. and provides services to Babies “R” Us. This is a highly automated operation utilizing RedPrairie’s warehouse management system (WMS) with heavy automation including extensive piece picking with tilt tray feeds to packing lines. This is an owned facility.
In Ontario, there is a 250,000 sq. ft. operation for New Balance Shoes (leased building).
In Compton, there is a 180,000 sq. ft. warehouse primarily servicing New Balance Apparel. This is a heavy piece picking and value-added warehousing operation.
Cal Cartage also has about 400,000 sq. ft. dedicated to Li & Fung (a retail and apparel procurement and supply chain company) in four warehouses.
In Wilmington, Cal Cartage has 75 acres and three 200,000 sq. ft. cross-docks leased from the Port of Los Angeles. Containers are spotted in 100 slots on the west side of these buildings and shipments are deconsolidated and loaded into trailers on the east side. Toys “R” Us, Target and other retailers are major customers. This location has a trailer/container capacity of 2,500. Suzuki Motorcycle loads through this facility on an average of approximately 10,000 units a year.
There is an on-site temp agency at the Wilmington deconsolidation center. About 60% of employees are $8/hour temps. 40% are higher skilled positions. Employment ranges from 500-1,000 employees at peak. Cal Cartage has 1,000-1,200 full-time regular employees. Lowe’s, Bed, Bath & Beyond, Sharp, Sony and Panasonic are its major customers. It is currently replacing its legacy WMS Maves/Andlor with RedPrairie.
Cal Cartage utilizes special tractors with extra axles for handling over weight containers.
In City of Industry, there is a 180,000 sq. ft. operation. It is primarily piece pick and has four customers.
Cal Cartage handles 600-800 container loads a week from Boron, CA (Borax) to the Port of Los Angeles.
There are two operations in Savannah, GA. There is a 600,000 sq. ft. operation for anchor account Target and transload operations for Lowe’s and Kmart/Sears. It also runs a smaller operation in Carteret, NJ and a larger one in Elwood, IL next to the Burlington Northern Santa Fe Intermodal Yard (a major transcontinental TOFC/COFC (trailer on flat car/container on flat car) termination point).
Owner-operators for K & R are compensated 70% of total load revenue. Werner, Hunt and other major truckload carriers are major Wilmington deconsolidation outbound carriers.
Cal Cartage describes itself as the “best in class” deconsolidation expert and in our opinion are very good. Curry, Gill and the team have done a very good job.
Sources: A&A Primary Research