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minimizing inventories.

Just-in-time is the norm in the wood products industry. Just-in-time optimizes inventories, buying as need demands, and moving product efficiently before coming back into the market for more. Often, this results in buying customer-friendly mixes of orders that are placed within hours instead of days of the desired time of delivery, allowing retailers to increase turns, conserve financial resources, and minimize exposure and storage costs. Retailers can better utilize display space when goods are stored offsite, but still in close proximity.

Some large producers first frowned on reloaders doing business in certain areas, but have since come to view the reload community as strategic allies and extensions of their own marketing efforts rather than competitors or parasitic subcontractors. It doesn't do much good to produce something at lower cost if higher cost competition can deliver it cheaper with more value.

Some producers are using independent reloads after closing their own DCs.

Many manufacturers, such as Georgia-Pacific, use public transloaders to supplement their own captive distribution centers, serving areas where they don't have DCs or providing overflow capacity when their DCs are at capacity. Some producers are using independent reloads after closing their own DCs, which were burdened with unrealistic transfer pricing, corporate accounting allocations and high fixed overhead staffing. Others have expanded business in some markets by using high-volume transloaders with lower unit costs. Historically, facilities have been classified as "origin" or "destination" reloads, depending on whether they are located near a manufacturing site or near end-use destinations. "Those located near a manufacturer are often controlled by that manufacturer and involve higher hidden costs than shippers expect," warns Patty

Schlaeger,

executive director of the 500-member Transload Distribution Association, Springtown, Tx. "Transloaders located near end-users are not volume-oriented, but are usually specialty companies whose function focuses not only on shipping, but other services shippers require for smooth business operations."

In addition, full-service transloaders closely monitor costs, offering total accounting of all shipping and value-added processes. By assigning a price to every step of the process they avoid formula costs and transfer prices used by manufacturers having hidden costs.

A shipper can shift from straight rail, truck or TOFC/COFC to a reload using trucVrail/truck. Transloaders may own and/or control rail, truck, storage and equipment functions, influence transit times from origin to end use, and minimize turnaround on equipment by managing a total network flow process. This provides a more reliable time/place/utility in the cost and benefits of strategically positioning goods close to the end-use market.

Forest City Trading Group handles more than 8 billion bd. ft. of lumber and panels annually and uses a vast network of independent public transloaders to ship forest products throughout North America from pro- ducing areas to consumers.

Smaller quantities and "super tallies" of mixed inventory can be strategically positioned close to the market without the manufacturer providing captive expensive, capital-intensive infrastructures requiring massive investments in geographically decentralized distribution centers. Transloaders can often create more responsiveness to changing customer needs at lower total logistics costs by combining existing public storage/truck/ rail than networks of captive distribution centers. Growth of transloading is the proof of this burgeoning reality.

Transloaders work with rail partners to optimize available equipment by decreasing turnaround of rail cars. They contribute to this improved cycle time by deploying trucks in short haul movements and rail in longer hauls, for which each are best suited economically. Class I railroads now have marketing business units to work with transloaders. Class 1 railroads including BNSF's Network Extension Services, CSXT's TransFlo, and Norfolk Southern's TBT are aggressively expanding transload networks through agreements with transload operators to become intermodal extensions of their railroads. In the case of Canadian National and Canadian Pacific Railway. expanding captive megarailroad-owned facilities which handle many commodities in key market areas. Union Pacific Distribution Services functions like a third party, non-asset-owning broker to bundle deals and help customers utilize the lowest cost modes. Regional and short line railroads cite transloading as a major growth strategy and are opening new transloads in remote hinterlands and providing service to areas not previously served by rail. o Are their facilities neat, clean, safe and well maintained? o Are the companies flexible and customer oriented?

I Fnsure refoader$ have adequate insurance and bonding.

I Check their financial strength and potential for growth and expansion. Do they have a favorable business report?