Cannon Copes With Loss of Wal-Mart Business

When Wal-Mart Stores implemented a software program last year to automate its freight bidding and lane assignment processes, the company expected to save millions of dollars annually in transportation costs.

Indeed it has. And most of the savings appear to have come at the expense of one carrier.

After years of riding Wal-Mart’s coattails, Cannon Express of Springdale, Ark., finds itself scrambling to recover from the loss of approximately $20 million to $25 million in Wal-Mart freight revenue over the past year.

“It hurt us, no doubt about it,” owner Dean G. Cannon said of the changes, which have cut Wal-Mart’s business from 47% of Cannon’s revenue in the fiscal year ended June 30, 1998, to 29.7% in the latest quarter ended March 31.

In fiscal years 1996 and 1997, Wal-Mart accounted for more than half of Cannon’s annual revenue.

Cannon, who has been hauling for Wal-Mart since 1981, said he simply couldn’t match low bids submitted by other carriers using a system called OptiBid.

For the full story, see the May 17 print edition of Transport Topics. Subscribe today.