Under Pressure

The economic challenges are certainly hitting the industry, but cold chain storage providers are meeting those challenges by developing programs and working more closely with their customers to achieve mutual efficiencies.


Kitz: There is a heightened focus on green initiatives that are efficient in addressing economic issues and more companies desire to document sustainability practices for their companies. Just a few years ago, there were not too many of us in this space that even knew what a carbon footprint was, let along what some of the key metrics are to measure it. But in the past two to three years, we have seen more interest in the way our customer base bids their business to the provider market and in the ways in which we are measured as a provider.

Certainly, the expenditure of fuel and how it relates to moving product is a primary concern. There are a lot of miles run on the highway purely to reposition equipment, drivers, and other necessary resources. Many of those miles are not filled with product. So for us as a transportation logistics provider, that means we must focus on the reduction of total miles travelled and assure the efficient use of the miles we do run by eliminating the consumption of unnecessary fuel throughout the supply chain. Our customers want to know what we are doing to reduce emissions and fuel consumption.

To this end, we took three areas we manage and combined them into one platform to create synergies for customers where there hadn’t been any before. This platform includes our dedicated business unit, which has empty miles inherent as it runs closed loop assignments for retailers, grocers, and manufacturers; our brokerage unit, which finds transportation solutions to meet specific shipment requirements; and our MTS solution that manages transportation for customers on other carriers. Our goal is to eliminate empty miles by putting freight on all miles driven, thereby increasing efficiencies for our company and for our customers.

Ampuja: Anyone in the industry who ignores sustainability and the green movement is doing so at their own peril. Larger companies with sustainability procedures in place within their organizations want their service providers to be green as well. Some of the bigger companies are setting up sustainability offices and they are incorporating vice presidents of green or sustainability. Many companies are linking sustainability with their supply chain practices; what was once a director of logistics is now a director of logistics and sustainability. Many companies have had such practices in place for quite some time, but they just haven’t tracked or documented them, which they are doing now under the green umbrella.

How have customers’ needs changed over the last five years?

Kitz: I think this goes back to the efficiencies of our customers’ networks. For example, five years ago when a provider received a request for quote, it would typically require meeting service requirements from origin to destination. It meant meeting cost requirements on miles driven while meeting the demands of the supply chain. But you wouldn’t see mention of filling backhauls, assisting in filling empty miles, or reducing fuel—but now all of these are common. Our customers are telling us they want our participation as a logistics provider to find ways to put product on trailers and to generate revenue for every mile traveled, both for us and for them.

Claassen: Simply put, they want us to perform things for them better, quicker, and less expensively. When you are trying to take cost out of the equation—which is what everyone demands now—you just can’t afford to redo things, so they must be done right the first time. The other thing you see more today is the way customers want to sit down with providers to try to find ways to take cost out of operations on both sides, for them and for providers. Our customers are asking what they can do for us that will help take cost out of the equation, which will end up in a savings for everyone involved.

For example, I have a grocery customer we worked with to help them gain efficiencies at their retail level. We agreed to reconfigure the warehouse in the same configuration as their department layout in their stores. We pick their orders according to how they will unload and put products away in their stores. Now all they have to do is just go right down their aisles and stock their shelves. By doing this, they were able to achieve efficiencies on their labor costs.

Finney: Our customers are shipping fewer truckloads and more smaller-sized shipments today. We are also seeing customers pushing more than ever before for cold chain data. Data in the cold chain has not advanced as quickly as it has in the dry LTL or dry TL arena. But customers want to have that cold chain information at their fingertips and the technology in the industry is catching up with the requirements of customers.

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