BUFFALO, N.Y. -- The much anticipated cross-docking facility under construction by Tops Markets here is pushing hot buttons among distributors seeking to cut costs and labor unions fearing large job losses.
The 880,000-square-foot center in Lancaster, N.Y., will include about 150 dock doors on three sides of the building and facilitate what could be the highest volume cross-docking operation in the industry. Pallets will be marked with bar codes, scanned as they are unloaded from supplier trucks and directly moved across the dock to Tops trucks.
"The center will have a minimal amount of warehousing. The goal is to have zero" inventory placed in storage, said one source familiar with project, who asked not to be named.
Steel erection for the distribution center, now under way, should be completed in March, said sources involved with the project. Larry Castellani, president and chief executive officer of Tops, told SN the facility should be operational by year-end.
According to industry observers, the new Tops facility represents the most aggressive cross-docking push yet for all six U.S. chains owned by Ahold, Zaandam, Netherlands. It may also mark an important step in Ahold's plans eventually to integrate much of the distribution network for serving all its U.S. operations.
In addition to Tops, Ahold owns Bi-Lo, Mauldin, S.C.; Edwards Super Food Stores, Windsor Locks, Conn.; Finast, Maple Heights, Ohio; Giant
Food Stores, Carlisle, Pa., and Mayfair Super Markets, Elizabeth, N.J.
Although other retailers and wholesalers are engaged in cross-docking, none has drawn as much labor opposition as has Tops.
"They've stirred up a real hornet's nest," said one retailer whose cross-docking operations date back several years. He said labor relations have been smooth at his chain thus far but "I believe at some point we'll catch a little backlash of what they've [Tops] done."
Industry observers and union leaders said the new facility will likely result in closings of Tops' seven warehouses. Ahold declined comment on the matter. The potential loss of jobs has galvanized labor and civic opposition.
The International Brotherhood of Teamsters placed advertisements earlier this month in several Dutch newspapers, claiming the new facility would cost more than 5,300 Buffalo-area jobs.
Better communications with the union might have alleviated some of the tensions, said one retailer.
"Some of our cross-docking programs are actually adding work for our teamsters and we've pointed that out to them," he said. "Our drivers are delivering more product than they've delivered in the past and our warehouse people, because this product has to be received, are actually picking up work."
An Ahold spokesman confirmed that the new center will take over the distribution of some direct-store-delivered products but would not comment further.
Taking over DSD shipments allows a retailer to make more frequent deliveries to the stores without sacrificing load sizes, said Ken Wagar, partner in PRG, Kohler, Wis. Wagar was vice president of procurement and inbound logistics at Spartan Stores, Grand Rapids, Mich.
"It's hard to cross-dock only twice a week without building inventories in the stores," he said. "But if I'm delivering all the Coke, all the Pepsi and Frito-Lay, now I can go to the stores five times a week with a full truck."
