How To Leverage Provider Collaboration to Improve Logistics Productivity

The North American food logistics market, estimated to top U.S. $40 billion in 2023, is forecast to almost double by 2032, rising to $79 billion, according to market research firm Global Market Insights (GMI).

The sector also is becoming more complex. GMI notes that the jump in online grocery shopping is boosting demand for efficient and reliable delivery of all food products. “This shift requires advanced logistics solutions, such as improved cold chain management and rapid fulfillment processes, to ensure timely and safe deliveries,” GMI states. Innovations in last-mile delivery and tracking technologies can enhance the customer experience and boost operational efficiency, GMI notes. They also add complexity.

Shipments to grocery distribution centers and stores also present challenges. Deliveries often need to occur within specific delivery windows and comply with service level agreements.

Succeeding in this competitive, complex environment requires solid collaborations between food shippers and logistics providers. Food companies that collaborate with their supply chain partners can cut inventory and costs, while improving performance and customer satisfaction, as these examples illustrate.

Perspectives from Providers

“The importance of building a collaborative working relationship between food shippers and their providers is critical,” says Joe Schulz, Founder of Nebraska-based Schultz Logistics, which has partnered with more than 13,000 carriers and arranged for over 70,000 food shipments since its founding in 2016.

“Our commitment to customer success is reflected in our 98.5% on-time delivery rate and our ability to provide enhanced value beyond just pick-up and delivery of a load,” he continues.

Case Study: ODFL’s Grocery Distribution Program

While less-than-truckload (LTL) shipments generally account for a small percentage of the volume moving into distributors’ warehouses, they’re often among the more difficult deliveries, says Ed Garner, Director of National Accounts with Old Dominion Freight Line (ODFL). One reason is that vendors often include multiple purchase orders on one LTL shipment, so the distributor has to separate the pallets by purchase order or product type.

In addition, when multiple LTL providers try to schedule appointments, dock utilization becomes unwieldy and visibility to incoming deliveries is lessened.

For the past several decades, ODFL has provided a grocery consolidation solution that streamlines the LTL receiving process. In one option, the company will fill a trailer with goods from multiple vendors and bring the trailer to the distributor’s yard, at its convenience, Garner says. The distributor will send an alert when the trailer is empty, and ODFL will swap it out with another load.

ODFL also can deliver products to a designated express door at a time scheduled by the customer.

“We’re in and out,” Garner says. In another option, ODFL will consolidate LTL shipments onto equipment the distributor has placed at ODFL’s local service center. At a scheduled time, the distributor’s driver will return to pull the loaded trailer to the distributor’s facility and leave an empty trailer to be filled.

The relationships ODFL has established with distributors enable it to understand and enhance their receiving, delivery, scheduling, and operational requirements. “Without a doubt, the improved efficiency, the seamless integration, and the reduction in total dwell time has made a significantly positive impact on our overall profitability,” says Clyde Coleman, Director of Logistics with Performance Food Group.

Uber Freight Helps Beverage Distributor and Importer Cut Costs

One reason partnerships have become critical is that determining on one’s own which digital offerings can deliver the most value can be tough, says Armon Shahpar, Senior Lead of Enterprise Partnerships at Uber Freight.

“No one understands the ins and outs of the supply chain more than the people working in it every day,” he says, noting that logistics providers can help shippers determine the goals that best fit their businesses.

Uber Freight partnered with a global distilled beverages importer and distributor to evaluate its workflows and address warehousing inefficiencies. By working closely with the company’s leadership team and third-party logistics partner, Uber Freight leveraged its findings to guide a new warehousing design. For example, they found that the facility’s ineffective use of warehouse space and slow stock replenishment process, as well as a misalignment of systems and labor, frequently delayed shipments.

Limitations in the warehouse management system (WMS) also contributed to inefficiencies in stock replenishment. Because completing large-scale improvements with a WMS could extend for years, Uber Freight recommended manual augmentations to shore up existing gaps until system updates could be completed.

Through the partnership, units per hour at the facility jumped by 47%, while staffing adjustments lowered overall equipment costs. Six months in, the company’s warehouse redesign had hit $10 million in annualized cost savings, or almost half of its original annual spending.

TQL’s Moves That Matter Helps Communities in Need

Through its charitable program, Moves that Matter, Total Quality Logistics (TQL) contributes its logistics expertise and covers the costs of transporting donated freight to nonprofits and communities in need, with an emphasis on food insecurity, says Kerry Byrne, President. In 2023, TQL moved 12.2 million pounds of donated goods through Moves That Matter. “It has been incredible to see how far the program has come,” he says.

Recently, TQL partnered with Whirlpool Corporation and HelloFresh as part of Whirlpool’s Feel Good Fridge program. TQL moves donated refrigerators on behalf of Whirlpool and food on behalf of HelloFresh to fill fridges at food pantries. Together, they’re impacting 13 cities, with Whirlpool Corp. providing 2,000 refrigerators which TQL will transport and HelloFresh will help fill with wholesome, fresh ingredients.

“We launched Feel Good Fridge to fight food insecurity in a sustainable way, and collaborating with HelloFresh and TQL allows us to expand our impact in the communities that need it most,” says Pam Klyn, Whirlpool’s Executive Vice President of Corporate Sustainability.

Food shippers are looking for experienced logistics providers that are focused on service and compliance, Byrne says. “We have moved millions of loads of food over 27 years. Food shippers rely on TQL for procedures and programs that keep food safe while transporting or storing,” he says.

Related Articles:

• How Musco Family Olive Company Leverages Outsourced Expertise
• The Name of the Game for Providers: Value
• Connectivity: The Key to Ready Your Supply Chain

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