As many American consumers embrace holistic health and are making healthier and fresher food choices, there are impacts to the country’s food supply chain. For retail grocers to capture market share, they must be able to guarantee the highest quality product at the lowest prices, giving transportation providers a vital role in the logistics of getting fresh or perishable foods to the end consumer quickly and efficiently.
This process is not simple and is only getting more complex. There is a significant and worsening labor shortfall in the trucking industry that affects critical pickup and delivery times across the country.
Heinkel’s Packing Co., Inc., based in Decatur, Ill., ships a variety of meat products to grocery stores and restaurants in 42 states, primarily by truck from the Midwest Inland Port.
“In our line of business, the biggest challenge we deal with is shippers not showing up on time—with several shipments going out at the same time, everything needs to be refrigerated,” says Wes Heinkel, president of Heinkel’s. “The inland port can give us a big advantage against competing manufacturers in Chicago.”
Trucking delays can often exceed seven days in major markets, which leaves food far from fresh. Seafood and other perishable foods that come from coasts need to be flown inland and get to their destinations quickly. Metropolitan cities with the heaviest wait times throughout the Midwest include Chicago, Detroit, Columbus, Cincinnati, and Kansas City.
Producers are in need of alternatives to get their goods to the final destination on time and are turning to solutions outside of the traditionally-used congested areas. They are finding that inland ports with access to highways, rail, and air can serve as central transportation hubs, and help them overcome current transportation challenges.
What’s Driving the Issue
The global fresh food packaging market is growing rapidly due to various government initiatives toward food safety and an upsurge for small portion food items, or demand for single-use packaging. Ready-to-eat and fresh products are one of the few segments of the industry that has shown consistent growth within the last few years.
Fresh sales comprise nearly one-third of food industry sales, according to website data from IRI. In a 2016 retail report from United Fresh Produce Association, sales of fresh produce rose 1.5 percent more in volume and 3.6 percent in weekly dollar sales. The global fresh food packaging market is estimated to grow at 4 percent annually over the next five years.
The logistics infrastructure of supply procurement, transport, storage, and end customer delivery is even more complicated when temperature-control and perishability come into play. This cold supply chain requires knowing when, where, and how your shipments are moving and constantly searching for innovations and improvements to current processes.
The clock is always ticking for fresh food delivery, from the time the food is ready to leave the supplier until it reaches store shelves. Equipment and technology are imperative to prolong the freshness of product, addressing the constant concern of spoilage, and the even more worrisome consumer health scare. The fresh supply chain must be faster and more focused on quality from producer to the final destination. With industry-imposed shelf life and sell-by dates, maintaining the integrity of the food is paramount.
Fresh Food Delivery Quickly Reaching More Retailers
When it comes to distributing fresh food, location matters. The Midwest Inland Port is a multi-modal hub located in Decatur, Ill., that delivers both domestic and international flexibility for companies through a well-positioned transportation corridor connecting the Midwest to the East, West, and Gulf Coasts of North America.
The market is consistently growing for easy access to fresh food, and quality—not price—is what often drives consumer satisfaction. That translates into new strategies to deliver highly perishable food as quick as possible. While retailers use various approaches to address perishability during shipment—such as picking and shipping produce that ripens en route or cutting fruit in-store—the most common request from grocers is simply more frequent deliveries with tighter time windows.
Decatur’s centralized geography allows for a one-day truck drive distribution reach to more than 95 million consumers within a 500-mile radius. There are more food and beverage expenditures in a 500-mile radius of Decatur than most other Midwestern cities: $284 billion from Decatur, $251 billion from Chicago, and $278 billion from St. Louis.
Decatur is home to global food giants Archer Daniels Midland (ADM) and Tate & Lyle. The Midwest Inland Port’s location can also provide a solution for smaller companies, like National Foodworks Services, a food incubator like many around the country taking hold to provide a more cost-effective solution to develop, market, and move goods; Soozie’s Doozies, a cookie dough company that moved to Decatur from St. Louis after they won ADM’s Food Innovation Challenge; and Stratas Foods, a supplier of fats and oils to the food service, food ingredients, and retail private label markets in North America.
Strategically located, the logistics complex encompasses rail, air, and trucking—offering uncongested, toll-free access to one of the country’s heaviest trucking and railway traffic flows, connected to Interstates 72, 55, 74, 57, and U.S. Highway 51.
In addition to its highway and rail networks, Decatur has a 2,000-acre airport with 8,400-foot runways capable of supporting wide-body cargo aircraft. The quick-access airport benefits companies transporting seafood and other perishable foods coming from the coasts that need to be flown in for Midwest territory distribution.
There’s also direct access to three Class 1 Railroads (NS, CN, CSX) connecting to all North American rail networks. And the ADM Intermodal ramp with 25-minute average turn times allows drivers to spend more time on the road covering greater distances rather than sitting in long lines cutting into valuable drive time.
Rural King, a farm and home store based 40 miles southeast of Decatur in Mattoon, Ill., has over 100 stores in 13 states. It relies on the inland port for some imports that are railed to Decatur from Canada and Los Angeles. The company picks up those goods with its own trucks and takes them to its distribution center at Mattoon.
“We used to bring everything in through Chicago. The wait time and delays continuously stalled on-time delivery,” says Alex Melvin, president of Rural King. “It made sense for us to move to the Midwest Inland Port. The ease of use and savings in both time and dollars has had a positive impact on our logistics operations.”
Getting fresh goods to market that are still fresh upon arrival remains a major challenge for retailers around the country. Taking advantage of inland ports can relieve pressure for companies that need quick turnaround and transport times.