Food companies sourcing products from around the world are faced with a long list of critical and complex activities required in managing a global food supply chain. Managing truck, ocean, air and rail transportation components as well as numerous customs and individual country-by-country compliance regulations can soon overwhelm even the stout-hearted. Using multiple providers to handle specific links along that extensive chain can cloud visibility.
After all, successful and on-time delivery to customers is the primary objective for food companies sourcing products from around the world.
“The biggest concern is maintaining refrigerated and frozen foods at the proper temperature throughout the global supply chain,” notes Dick Armstrong, chairman, Armstrong & Associates Inc. in Stoughton, WI. “Spoilage concerns are the No. 1 complication if you don’t have refrigerated and insulated equipment in the right place at the right time.”
Managing the seamless and timely integration of multi-modal transportation from origin to final destination could involve trucking, ocean, rail or air transit to meet customers’ speed-to-market and expedited requirements. Sounds like a tall order, but 3PLs help eliminate the angst. Using one 3PL provider to manage every task along that global chain can provide consistent service, which increases the 3PL’s value to its clients. So how are U.S. food companies managing these complexities that allow them to control and manage their global supply chains while maintaining stellar customer service?
Managing A Complicated Supply Chain
The experts we spoke with reported that managing the chain is extremely difficult for any individual company to handle on its own. “There are so many pieces involved,” notes Bob Weist, vice president for logistics and sales for Crowley Logistics Inc. of Jacksonville, FL. “First they have to get their products to the States. Then they have to factor in speed-to-market requirements, and the new Customs and USDA regulations governing imported food products.”
International food accounts for about 25 percent of the company’s business, and the segment continues to grow, reports Weist. The majority of food products Crowley handles includes fresh fruits and vegetables from the Dominican Republic and Central and South America. The company also handles finished goods such as boxed and canned goods, rice and beans.
Using multiple freight forwarders and other providers along the global supply chain hinders end-to-end communication, adds Steve Simonson, partner with Tompkins Associates in Raleigh, NC.
“You want to maintain a unified link, without having several different providers touching the product because that just invites the potential for too many holes to develop in the chain,” Simonson says. “This is a major driving factor for food companies. They prefer having one unified company managing everything, especially when you factor in food safety and security issues.”
Visibility, of course, is the means to this end. “Uncertainty within the supply chain is the No. 1 cost escalator,” notes Jim Butts, senior vice president for C.H. Robinson Worldwide Inc. in Eden Prairie, MN. “For years, companies have been depending on 3PLs for technology support offering visibility into their supply chains. They want to know where their products are, if products will get to their customers on time, and if all of the compliances are being met. So visibility through technology reduces any chance of uncertainty.”
Complying to the rules and regulations relative to a range of countries—each with its own set of rules—is the biggest headache for food companies, continues Simonson. “This is where the value of having a 3PL comes into play, as they can take care of all of those details. Language barriers can also undermine efficiencies. By hiring locals, 3PLs can have folks with boots on the grounds who know the language and the business. For example, trying to handle these activities as an individual company could mean that you can be working with a distributor in China one day, only to discover that the following day the distributor has closed down business.”