EFFICIENCY -- AND EFFECTS

DENISE ZIMMERMAN

BUFFALO, N.Y. -- Companies pursuing more efficient distribution methods that change the dynamics of labor, such as cross-docking, anticipate more vocal opposition from unions this year.

"I think the Teamsters have awakened to the fact that this cross-docking that's gotten ballyhooed in the industry is ultimately going to mean less members for them," said a senior level distribution executive for a major wholesaler, who asked not to be identified.

"But that clearly isn't going to impede the progress that the industry makes because it is affecting the ultimate cost of goods on the shelf," he said.

Cross-docking and other efficiency initiatives will continue to flourish in the industry because of heightening competition, distributors told SN.

"We cannot ship our product without the maximum efficiency that our competition -- vis a vis a lot of the mass merchandisers -- are enjoying," said one East Coast retailer whose cross-docking successes have been well documented.

Retailers and wholesalers familiar with labor issues raised at Tops Markets here, which is building a cross-docking facility, said they've not experienced such intense opposition from their own unions -- but that may soon change.

"Tops has taken a terrible public beating on this. We'll probably catch a little of the backlash," the retailer said in reference to civic and union allegations that cross-docking at the new facility will eliminate more than 5,000 area jobs.

Another major wholesaler told SN, "I think the bigger issue is the whole topic of outsourcing. And outsourcing has gone primarily to a nonunion environment" for cost-containment reasons.

"Teamsters see this as another erosion," he added. "I think as we get further into the year, it's going to become a bigger issue."