The new international logistics services unit will handle other verticals in addition to food and beverages.
Jacobson has several food clients already onboard awaiting the new international offering. “The key to the global food supply chain is maintaining the integrity of the product as it moves from its origin to final destination,” says Lutt. “If you have many handoffs along the supply chain, but you don’t have control of those connecting points—or you don’t have the visibility into the processes involved in each of those handoffs—then you have a problem. With individual links of the chain being handled by different parties, there could be a breach in terms of the security or integrity of the product when the handoffs take place.”
The initial point of visibility for Jacobson’s new model begins at the creation of a P.O. for a transaction, explains Lutt. Once the company takes receipt of the food product, it is transported to a warehouse where value-added packaging could be done—or it could be moved right into a consolidation mode. The shipment is then loaded into a container for ocean transit—or put onto an optimized pallet for air transit.
Once shipments hit U.S. ports, Jacobson handles customs brokerage and FDA or other required inspections at its port facility. “We can take products into our facility at the ports for further consolidations which could mean pooling products with other domestic products and then moving them to final destination whether that is a retailer’s warehouse or directly to the retailer,” Lutt explains.
Jacobson operates port facilities in Seattle, Los Angeles, Miami and New York, where it can provide de-consolidations, value-added services, packaging, and re-packaging. It also operates hubs at air facilities in Denver, Chicago and Columbus, and operates over-the-road border facilities in El Paso and Houston.
Jacobson expects its global reach will extend into Asia, Europe, Africa, and Latin America over the next few years. “This is a methodical, step-by-step process and not a launch that you can bring out all at once,” notes Lutt. “A first major step for us will be to roll this model out to Asia and then we will go beyond that selectively over the next few years so we will have a broad-scoped international service capability.”
Simonson notes that the number of 3PLs getting involved in providing end-to-end global food supply services will increase over the next few years. He reminds that the food supply chain is an expensive venture because of the strict refrigeration and freezing requirements.
“They are expensive distribution chains and the industry will become even more complex as the government imposes new rules and regulations. So as that complexity increases, food companies will want someone to manage that effectively. One of the most active private equity areas now is the 3PL providers,” says Simonson. “That activity was hot in 2006 and 2007, prior to the recession, and from what we are seeing now it is not slowing down.”