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As food retailing becomes more complex and sophisticated, supply chain challenges are being met with a variety of strategies and innovations.
?Today?s food retailers are facing tough times in regards to transportation,? affirms Steve Covey, EVP at Choptank Transport, a third-party logistics (3PL) supplier in Preston, Md. ?Costs are rising due to a number of factors. There is a severe driver shortage, which translates into the much-talked-about capacity crunch, meaning there is more freight than there are trucks to move it.?
Government regulations have also created an added layer of difficulty for carriers, and the new hours-of-service ruling is taking its toll. ?Choptank?s job as a broker is to find our customers the right equipment, in the closest proximity, for the right price,? Covey says. ?That is how we add value for the shipper and try to keep costs down.?
At Atlanta-based NexTraq, VP of Marketing Wyn Partington notes that the supply chain process is complex, and that with the Food Safety Modernization Act (FSMA) and other regulations requiring cold-chain and container safety monitoring, traceability and transparency are more important than ever.
?NexTraq Fleet Management Solutions let companies know where their vehicles are in real time and provide ?breadcrumb trails? of where they?ve been,? he explains. ?Customers are becoming more and more concerned about tracing food to its source. Our solution provides complete transparencies so companies can show exactly where produce has been, from farm to store.?
Kerry Byrne, EVP of TQL, in Cincinnati, says: ?The tight truck market is by far the biggest challenge affecting transportation and logistics right now. This gives our company a chance to shine and show off what we do best: accessing quality capacity. We?ve spent the past 17 years developing a deep and broad network of quality carriers.?
TQL helps customers modernize their supply chains by helping with rate and market analysis of the lanes they ship, and consolidating shipments based on the lanes they run. ?We can take some of the burden of customers? traffic departments by integrating their internal management and load-building software to work with ours,? Byrne notes, ?and providing advanced tracking and reporting capabilities, freight bill auditing, filing and even management of claims services.?
Adam Kahn, SVP of marketing at San Diego-based SmartDrive, says his company ?enables good drivers to become great drivers ? keeping them on the road safely, making their pickups and deliveries when scheduled, and getting home at night to provide for their families.?
At Miami-based Ryder Dedicated, VP of Operations Jorge Salas notes that ?as the driver shortage continues to grow, the biggest challenge for our food retailers is to continue to drive down cost without sacrificing service. With the level of flexibility, hours of operation that are required, high-touch freight requirements on the driver, and the requirements to work most holidays, it will get more and more difficult over time to attract drivers to this industry at current pay levels.
?One of our strategies continues to be to find ways to increase overall compensation to the driver by working with our customers to optimize the routing and deliveries to their stores,? he continues. ?We also combine and leverage resources across accounts to maximize pay and minimize variability in drivers? schedules that enable them to be home most nights.?
According to Bob Biesterfeld, VP of North American truckload at C.H. Robinson, in Eden Prairie, Minn.:?Cost and service are no longer differentiators for logistics providers, as a strong provider must be able to add incremental value throughout the supply chain. Retailers are asking logistics providers to earn business in nontraditional areas. Some services C.H. Robinson offers are consolidation and distribution of LTL (less-than-load) shipments, ranging from temperature-controlled to floral and dry shipments.
C.H. Robinson also is seeing appointment scheduling or other task-driven events being sourced to logistics providers because they can do things with greater scale and drive down costs. ?Retailers are asking for more robust business analytics in general,? Biesterfeld says, ?so we are seeing retailers turn to 3PLs with greater technology and business intelligence tools to help them move their business forward.?
?Supply chain pressures today are greater than they were yesterday,? observes Mike Mulqueen, senior director, product management at Atlanta-based Manhattan Associates. ?And tomorrow?s will be greater than today?s. The key is always making sure you?re ready with the right solution.?
The grocery supply chain changes dramatically over the course of a year, Mulqueen acknowledges. ?From summer produce to crazy peak volumes in November and December that are 10 times the norm, knowing not just how but when a supply chain needs to flex is what makes today?s needs so extreme,? he notes.
Mulqueen says that Manhattan Associates offers supply chain commerce solutions that help grocers get commerce ready, and better handle these wild ebbs and flows in their supply chains.
Spoiled for Choice?
?Today?s consumer expects nearly limitless variety and options, all available immediately, similar to what Amazon provides in retail,? notes Ginger Stegmier, VP marketing at Llamasoft Inc., in Ann Arbor, Mich. ?As a result, companies are scrambling to increase their product offerings, rolling out new products more frequently and searching for strategies to get a wider variety of products to shelves for customers, while ensuring freshness and lowest logistics cost.?
Llamasoft provides technology and expertise to support supply chain and transportation modeling projects that enable a true end-to-end view of the supply chain. ?We help companies quickly create digital models of their supply chain, enabling them to design a supply chain that better adapts to these changing demand conditions,? explains Stegmier. ?Companies can use the same model data to create efficient multistop vehicle routes and run what-if simulations to see how routes change with the implementation of new network designs.?
At TransCold, in Edina, Minn., meanwhile, VP of Business Development Jason Stafford believes there are too many touchpoints in food distribution, adding cost and risk by total events in the supply chain. ?Our service offers the option of a more streamlined forward distribution where our transportation hubs can be utilized as forward distribution or mixing centers,? he says.
As Frank McGuigan, president of transportation management at Dallas-based Transplace, sees it: ?To address the challenge of tight and highly regimented delivery windows, Transplace closely tracks all appointments and establishes alerts indicating if a driver has not provided an arrival status update within two hours of the delivery time. We also have employees strictly dedicated to tracking all delivery appointments and contacting the driver or carrier at designated times during transit.?
At Fleet Advantage, in Fort Lauderdale, Fla., Chief Sales Officer Fran Flynn says that a difficult challenge a transportation manager faces is lack of time and analytical and technical resources to closely monitor fleet metrics.
?We help our clients assimilate all the information and organize it into a cohesive and logical format,? he explains, ?and then perform a comparative cost analysis and set a course of action for fleet modernization, resulting in immediate savings.?
With such supply chain services, there will be more green lights on the road to retailers.
?From summer produce to crazy peak volumes in November and December that are 10 times the norm, knowing not just how but when a supply chain needs to flex is what makes today?s needs so extreme.?
?Mike Mulqueen, Manhattan Associates