The Pool Distribution model has proven to be cost effective for supply chain operations by eliminating direct LTL shipments from suppliers to customers while reducing the overall product cost per mile. This is often executed through regional terminals with geographic responsibility of customer shipments. Inbound freight arrives to a regional terminal from various shipping points and suppliers. The bulk freight is then broken down and reassembled into individual orders for individual shipping points. Product from several suppliers is combined onto one shipment.
There are three components to the Pool Distribution model. This model frequently requires significant investments in facility infrastructure, including conveyor systems and logistics technology to accurately sort and segregate items according to the destination lane. There is also a substantial investment in transportation infrastructure in terms of both cost and coordination. The third component of the Pool Distribution model is labor. In order for product to be processed through a regional terminal there must be labor to unload each trailer, register inbound freight, assemble and stage pallets, and load outbound freight. Inadequate labor practices and oversight can result in operational deficiencies that can produce less than optimal service levels. This will often translate to higher costs. We believe that in order for the Pool Distribution model to function optimally, labor methodology must be incorporated into the overall strategy of the customer. The way in which labor management is executed will have a dramatic financial impact. A motivated workforce that is honed in on customer necessities will result in greater operational efficiency and cost control.