You are here
WASHINGTON - In an effort to optimize transportation cost savings and service throughout the food retail industry, the Food Marketing Institute and Grocery Manufacturers of America have issued the Manufacturer & Distributor Customer Pick-Up/Backhaul Fairness Statement.
"Ever since deregulation in the early 1980s allowed trucks to make multiple pickups and deliveries on the same round trip -- so-called backhaul or customer pickup -- the food industry has made enormous gains in distribution efficiency," said FMI president and c.e.o. Tim Hammonds. "In recent years, however, more companies have used their own carriers to reduce costs when greater collaboration could have allowed trading partners to share in the savings and increased the benefits for all."
Manly Molpus, GMA president and c.e.o., said there are "significant cost-saving opportunities when you consider that the food industry spends $26 billion a year on transportation, equal to 4 cents out of every consumer food dollar."
The Fairness Statement includes suggested best practices to help retailers, wholesalers, and suppliers reduce those costs, and ultimately benefit both the industry and consumers. Specifically, it recommends that trading partners form a joint team to manage backhaul, bringing together their experts in logistics and transportation, sales, category management and procurement. This will help ensure that backhaul discussions are not limited to rate information, but are elevated to transportation capabilities, and to meet the needs of all parties and consumer demand.
The FMI Distribution and GMA Logistics Committees crafted the Fairness Statement under the leadership of Dennis Donelon, director, customer services, at Quaker Foods and Beverages (now PepsiCo Beverages & Foods), and Mike Scott, vice v.p. logistics, at Ahold USA.
A copy of the statement can be downloaded from the Web sites http://www.fmi.org and http://www.gmabrands.com.