The meltdown in the ABC warehouse meant restaurants ran dry and liquor store shelves went empty as they waited week after week for shipments that never came. ABC warehouse manager Ruan Transport chose to remove the conveyor belt system and replace software system at the same in January. However, Ruan was supposed to replace the conveyor belts last year. The replacement of the two systems at the same time resulted in a perfect definition of "SNAFU"
ABC contracted with Ruan in 2023 to manage its warehouse in Gluckstadt. The contract was worth $45 million. Ruan closed down the warehouse from January 7-12 this year to take inventory as it does every year. Unfortunately for all, Ruan was not satisfied with just counting cases.
The warehouse management software was installed in 2003 and at the end of life stage. Since there would be no more updates for the software, Ruan installed the Blue Yonder software system while it was shut down - but did so without beta testing. The system went live when the warehouse reopened. Disaster immediately ensued as Blue Yonder and ABC's software, MARS, did not communicate to each other as they should. Orders piled up while few cases went out the door.
Ruan piled on the projects during the shutdown as it also removed the conveyor belt system that had been in use for decades. State Department of Revenue Commissioner Chris Graham told the House State Affairs Committee Tuesday the belt system was obsolete and they could not longer obtain parts for it unless they were fabricated.
Commissioner Graham said replacing the conveyor belt system with new conveyor belts was not an option as the warehouse would have to shut down for 30-60 days during replacement.
After removing the conveyor belt, Ruan switched to a pick a pallet delivery system. No longer were orders sorted at the warehouse but instead were shrink-wrapped and placed on pallets. Thus a pallet might have multiple orders on the same pallet, leaving the truck driver to do the sorting.
Customers such as liquor stores, restaurants, and casinos paid the price for Ruan's incompetence. Orders were usually delivered within 48 hours but thanks to the snafu, customers had to wait 3 1/2 weeks for deliveries. The delay meant shelves went empty and restaurants ran out of liquor.
Those affected questioned (in not so nice words) why Ruan removed the conveyor belts at the same time it installed new software.
The conveyor belt system did not suddenly fail as Ruan planned to replace it for nearly a year.
Ruan and the Revenooers (Sounds like a band) executed an amendment to the contract in March 2025. The amendment states:
The amendment increased the amount paid to Ruan per case. The original rates are:
First year: $2.22
Second year: $2.35
Third year: $2.49
Fourth year: $2.64
The new rates are $2.65 for the third year, a difference of 16 cents, and $2.70 for the fourth year, an increase of 6 cents.
What is interesting is the amendment decrees Ruan shall be paid the higher rate starting March 1, 2025 even though it did not switch to the pick a pallet system until January 2026. So it appears Ruan was paid extra for a system it did not implement for another nine months.
Fortunately, ABC customers may soon see some relief. A source said the warehouse has cut and delivered 15,000, 16,000, and 18,000 cases each day over the last three days. The 18,000 shipment includes 2,000 cases of bulk orders for wholesalers.
ABC told customers it expects to ship 70,000 cases this week:
Kingfish note: Hmmmm...... ABC ships roughly 4 million cases of booze per year. Adjusting for a period of nine months yields 3 million cases shipped.
3,000,000 x 0.16 (increase) = $480,000.
Thus Ruan probably received nearly half a million dollars in higher rates for a system it never installed in 2025. Good grub if you can get it.
15 comments:
With a contract like that, I wonder if Coach Ellis Johnson is in management for Ruan Transport.
Graham should be fired, period. Even if he is an improvement over Frierson, there must be accountability. This is a bad management fiasco. Ball is in your court Governor Reeves. Put up or shut up time.
Seems like a more accurate acronym would be F.U.B.A.R.
I'm sure that "selection" of Management, was primarily predicated upon the proffering of the best "considerations" to the state's most key functionaries. Unfortunately, those best at doling-out "considerations" tend to be the least competent at doing whatever they've bought their way into being chosen to do.
Between the ice storm and the liquor shortage, Tate having a bad year as the man in charge.
Thank goodness i brew my own beer and don't like the taste of hard alcohol
Glad I quit drinking a couple years ago or I'd be wearing out I-20 to Delta, LA and back.
This entire ordeal is reminiscent of the cluster f*ck at Employment Security a few years ago.
"Commissioner Graham said replacing the conveyor belt system with new conveyor belts was not an option as the warehouse would have to shut down for 30-60 days during replacement."
Which is what happened anyway, without the benefit of new conveyor belts.
"Ruan Transport" - say it out loud and it sounds perfect.
$45 Million! That smells like a Jackson palm greasing sweetheart deal!
Makes you wonder about the bids from the local companies that were rejected in favor of Ruan and whether they were lower than these amended rates. Sounds like a nightmare!
I suspect that the Commissioner is not out of booze, nor is the guv's mansion.
Temperance is good for the soul.
Did UMMC provide the software support?
Shippers Express had that contract for 20-30 years and there was never no problem. Then politics got involved and they lost contract and here we are today!
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