PRWs: The Cold Facts

Public refrigerated warehouses are fighting the good fight, including an unpredictable economy, severe customer demands and costly regulations.


 

Lemonade From Lemons

With all of these pressures on PRW operators coming from the government, customers, and the world economy, how do operators keep from being squeezed to death? The answer is they are developing close relationships with agencies like OSHA and the EPA. They are also thinking nimbly, developing diverse innovative value-added programs for their customers.

Proactive relationships with agencies like OSHA: Someone once said that life is 10 percent what happens to you and 90 percent how you respond to what happens to you. PRW executives might have written that axiom themselves. For instance, Don McGraw is stepping up to the plate to assure his company will have no problems during any inspection. “We are assuring our operation is safe, that our warehouse is clean, and that our valves in our ammonia system are running properly and have up-to-date inspections,” says McGraw, president of Columbia Colstor Inc. in Moses Lake, WA.

Like other leaders in the industry, Colstor trains its employees extensively in its training center devoted to teaching a two-week safety session for new employees, who receive continuing training every two years in safety policies including the safe operation of warehouse equipment. “In doing this, we have seen a huge improvement in our overall accident rate,” notes McGraw. Colstor plans to implement technology that recycles or evaporates wastewater from the ammonia condenser system.

Paradigm shift: Galiher at Preferred Freezer notes a paradigm shift from what had been unrealistic customer price demands. “Customers were always concerned about cheaper prices, thinking that the lowest price was the best value. That challenge was exaggerated even more when the recession took hold.” So on the one hand, Galiher says customers were squeezing price, while sending less inventory.

As the economy flirts with signs of a slow recovery, some better customers are realizing they had been overly zealous in demanding lower prices because their level of service with their own customers was being undermined, reports Galiher. “They began to understand there are costs associated with late deliveries, incorrect orders, product damage, and dissatisfied customers. Their reputations were being put on the line when they shopped strictly for the lowest price.”

Trusted relationships: Customers are more determined to build long-term relationships with their PRWs, notes Kaplan at Cloverleaf. “In the past, it often seemed that whoever quoted a penny less would get the business—then a month later that business moved to the next-lowest bidder. Now it’s about who will be cheaper and prove to be a more reliable partner over the long run because moving from provider to provider is costly and difficult. Customers want to be comfortable with their business partners, because business complexities require long-term relationships.”

Recognizing the importance of building beneficial partnerships with customers, Americold instituted two new programs. Its Voice of the Customer feedback program periodically assesses customer experiences and prioritizes action plans based on areas most important to customers, reports Falcone. And its Customer Advisory Board provides customers a forum to share ideas openly. “This has helped improve our planning and new service development,” Falcone says.

Lower inventories: “We have to be able to operate more in a crisis mode today, such as responding to last-minute changes,” notes Henningsen. The economic downturn is causing PRW customers to watch their bottom lines by not carrying the amounts of inventories they had been accustomed to in years past. “They would produce more and store products in warehouses so they would have safety inventory to compensate for anything requiring a safety net. Now they need to plan and forecast a lot better.”

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