SUPER KMART TO OUTSOURCE DISTRIBUTION SERVICES AT 4 DCS

PATRICK SCIACCA

TROY, Mich. -- In a move to consolidate logistics and transportation services, Super Kmart Centers here has entered into a distribution-services agreement with a third-party logistics company for two of its distribution centers in the Midwest. Two more facilities, one in the mid-Atlantic region and the other on the West Coast, are also scheduled for outsourcing.

The program is aimed at reducing costs by integrating and consolidating less-than-truckload distribution, according to a source familiar with the situation. Other potential benefits include allowing Super Kmart to minimize its stock requirements, as well as globally view which products are in inventory and which are in transit. This will help the retailer perform ordering and delivery on a just-in-time basis, according to the source.

During the first quarter of 1999, the third-party company, working out of distribution centers in Indianapolis and Carthage, Mo., will initially distribute more than 150 million pounds of food product in five product categories.

Super Kmart confirmed that it has signed the distribution-services agreement with Americold Logistics, Atlanta, but would not comment on the details of the agreement.

The third-party company will use multitemperature transportation to transport deep-frozen, frozen, fresh-meat, chilled and dry-goods products to Super Kmart stores. Although there is no projected date, expansion to distribution centers located in Ontario, Calif., and Strasburg, Va., is expected in the future.