Transportation & Logistics International - Spring 2017 - 56

MANUFACTURING

"Your paper mills aren't going to move but your customers are moving
around so you have to be flexible." -Howard Lortz, director of supply chain

Riding
the Rails
BOISE PAPER REACTS
QUICKLY TO CHANGES
IN RAILROAD ACCESS
THANKS TO THIRD PARTY PARTNERS.
>BOISE PAPER

BY TIM O'CONNOR

The short lead times required by
today's market and competition from
overseas mean that paper maker Boise
Paper must create efficiency wherever
possible. That is why the company is
so heavily reliant on one of the nation's
most cost-effective and consistent
means of transporting products: box
cars and trains.
Boise Paper's distribution strategy is
centered on access to railroads. Most
distribution centers (DCs) are located
on a rail spur, reducing the cost and
time of delivery. "Only about 10 percent
of distribution centers are rail served
anymore," Director of Supply Chain
Howard Lortz says. "There's a lot less
railroad access than there used to be.
We try to position warehouses so we
get the best rate to the DCs and as close
to the customer for outbound delivery
by truck."
The reliance on rail presents its own
problems for the company. This limits
where Boise Paper can locate its distribution centers, for instance.
"The challenge is rail rates change and
if you're captive in a particular building - if you own the assets and it's not
open to reciprocal switching - you're
really kind of caught," Lortz continues.
"That's one reason we've switched to
third-party warehouses with short-term

56

TLIMAGAZINE.COM SPRING 2017

// Boise Paper takes pride in keeping its
operations safe, and rewards employees for
maintaining a safety culture.

agreements. So if things change, we can
relocate to a new site."
The company used to operate more
of its own distribution centers, but
working with third-party partners gave
it the flexibility to move operations as
rail rates and service changed. In 2016,
Boise Paper closed its last remaining
distribution center, a 30-year-old,
200,000-square-foot facility located in
Bensenville, Ill., and switched operations to Nexus, a third-party warehouse
in Bedford Park, Ill.
Most third-party distribution agreements range from month-to-month
contracts to up to three years. The short
length of the terms enables Boise Paper
to react quickly to changes in the rail-

road. "It's been the answer for keeping
costs down by finding the best facility for
service, location and cost," Lortz says. "If
you're not willing to relocate your distribution centers and have the systems
to support that, you're at a disadvantage.
Your paper mills aren't going to move
but your customers are moving around
so you have to be flexible."
-------------------------------------- [ PROFILE ]
Boise Paper
www.boisepaper.com
Revenue: $1.1 billion
Headquarters: Boise, Idaho
Employees: 1,500
Specialty: Paper products
---------------------------------------------------


http://www.TLIMAGAZINE.COM

Table of Contents for the Digital Edition of Transportation & Logistics International - Spring 2017

Table Of Contents
Transportation & Logistics International - Spring 2017 - Cover1
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Transportation & Logistics International - Spring 2017 - Cover3
Transportation & Logistics International - Spring 2017 - Cover4
http://www.nxtbook.com/nxtbooks/knighthouse/tli_vol8issue4
http://www.nxtbook.com/nxtbooks/knighthouse/tli_vol8issue4A
http://www.nxtbook.com/nxtbooks/knighthouse/tli_vol8issue3
http://www.nxtbook.com/nxtbooks/knighthouse/tli_vol8issue3a
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