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Global Logistics Focus Sept.19, 2016

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GLOBAL LOGISTICS FOCUS 2016 For more information, visit odfl .com or call 1-800-432-6335. OD Global offers: • Personalized, single point of contact for status on all shipments • Nationwide Container Drayage from most major rails and ports • Direct service to or from Canada, Mexico, Puerto Rico, Alaska and Hawaii SPECIAL REPORT declined 6.5 percent from the same period a year earlier, the $482 billion retailer said in mid-August. That inventor y improvement, a $1 billion year-over-year reduction, helped boost free cash flow at Wal-Mart by 96.3 percent from the first half of 2015 to $10.3 billion. "The team did a great job of managing the flow of inventory," Wal-Mart President and CEO Doug McMillon told Wall Street analysts in an Aug. 18 earnings conference call. On a smaller scale, department store chain JC Penney also cut inventories in the quarter, reducing merchandise stocks 1 percent, to $3.0 billion. "We feel good about the content and composition of our current inventory position during this all-important back-to-school selling season and as we head into the back half of the year," Chief Financial Officer Ed Record said on Aug. 12. Inventory in the quarter rose 4.5 per- cent, to $8.6 billion, at Target Stores, however. Target executives stressed that the retailer is investing in non-seasonal inventory to reduce the risk of stock- outs, either on the shelf or online, when customers pick or click on an item to buy. "To prepare for this holiday season surge, we are investing to ensure our stores can continue to deliver a great pickup experience in the face of rapidly increasing demand," Chief Operating Officer John Mulligan said in an Aug. 17 earnings call transcribed by Seeking Alpha. As consumer demand evolves and e-commerce sales rise, getting the in- store and online inventory mix right is increasingly difficult, as is determining inventory needed to avoid out-of-stock situations and managing inbound freight, all while competing with Amazon.com. Inventories have been piling up for years at retailers, wholesalers and man- ufacturers, depressing freight demand, contributing to overcapacity in truck- ing and filling every nook and cranny of available warehouse space. Total U.S. business inventories increased 0.2 percent in June from May to $1.8 trillion and were up 0.5 percent from a year earlier, according to US "When customers build a basket of goods online rather than ordering one item at a time, shipping economics are in their favor and ours."

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