Chill Challenge

Capacity shortages and smaller shipment sizes are creating a meltdown for cold chain participants, according to our exclusive survey.


Collaboration

Although not categorized as an improvement program, respondents overwhelmingly believed that collaboration with suppliers, customers and carriers will help mitigate transportation issues. Furthermore, 60 percent believe that collaboration and communication will improve somewhat in the future. Collaboration with trading partners is fundamental to doing business within the cold chain and can occur at the most basic level through communication, relationships and sharing plans and information.

From a supply chain technology perspective, multi--platform messaging with other supply chain partners and systems provides companies with real--time visibility of supply and demand. This enhances collaboration between cross--functional pro­cesses and allows inventory to be tracked and events to be managed. This can lead to more informed and rapid decision--making, improve transportation reliability and provide the ability to proactively address the impact of exceptions or unexpected events throughout the entire supply chain.

In Summary

Cost and capacity availability will only get worse before it gets better. Fifty--six percent of the respondents believe that costs will continue to rise over the next year and 41 percent believe that capacity will still be a challenge. With this said, only 20 percent of the respondents were pessimistic about the direction in which their transportation component of the cold chain is heading.

Forty--three percent are at least somewhat optimistic that the transportation component of the cold chain is heading in the right direction. This positive outlook may be attributed to the fact that companies are planning for the future and rolling out programs and technologies that will address transportation challenges. Addi­tion­ally, companies are strengthening their relationships and increasing collaboration with supply chain partners.

ABOUT THIS SURVEY:

To determine cold chain trends in the food and consumer goods industry, Food Logistics and AmeriCold Logistics, an Atlanta--based third--party provider of temperature--controlled storage and distribution services, conducted an e--mail survey of subscribers to Food Logistics. The survey was conducted between December 2004 and January 2005.

Tracy Sobeck, a supply chain consultant wirh AmeriCold, and Darren Frost, a manager in AmeriCold's supply chain service, conducted the survey and compiled the results. One hundred and twenty--five companies representing a good cross--section of upstream and downstream participants in the cold chain submitted responses to the survey questionaires.

The survey was conducted to determine how companies in the cold chain are adapting to changing business requirements and what programs and technologies have been implemented to address these transportation challenges. It also provides insight as to what supply chain initiatives are being planned or thought about for the future and what their anticipated impact on key performance indicators will be.

Overall, 31 percent of respondents manufacturer product, 27 percent provide warehousing, distribution or transportation services, and 42 percent demand product.

The majority of respondents represent smaller companies with annual revenues of less than $100 million (62 percent) and an annual transportation spend of less than $10 million (64 percent). These companies are not spending significantly more or less on transportation as a percentage of revenue than other companies within the same revenue bracket.

Most survey respondents handle product requiring temperature control, with the greatest percentage handling a random mix, followed by refrigerated and frozen. Almost 80 percent handle and transport packaged/processed foods;

72 percent handle meat;

67 percent handle baked goods; 65 percent handle dairy; 52 percent handle seafood;

51 percent handle non--food items;

47 percent handle produce;

45 percent handle liquids;

45 percent handle seasonings; 40 percent handle raw materials;

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