Shorter transit times. The growth of the omni-channel sector—including in the grocery business—means customers expect things at the click of a button. Case in point: A recent report from Internet Retailer details the online grocery boom, noting that the sector is expected to grow by 157 percent to $42.1 billion this year alone, according to Morgan Stanley.
Continual analysis of transit time data along with proactive communication can help suppliers plan and execute an effective transportation strategy as the omni-channel food retail market continues to grow. For example, by combining partial loads into fully utilized truckloads, suppliers can achieve shorter, more predictable transit times. With proper pre-planning, loads can be consolidated, which typically allows more direct transportation routes. This, in turn, reduces the risk of damage and errors.
A comprehensive network optimization effort can drive major reductions in landed costs while maintaining—and in some cases, even improving—transit times. Considerations include production, warehousing, and inventory needs, in addition to transportation. Warehouse location, growth projections, and potential new markets should all be closely considered and included in forward planning to ensure that today’s working solution does not become tomorrow’s roadblock to scalability.
The decision to work with a single national warehouse provider or multiple regional warehouse providers is driven largely by two things: 1) cost and 2) the consideration of utilizing a single or multiple warehouse management system(s). This analysis complements a mode optimization effort, allowing shippers to control costs and enhance service through the optimum blend of intermodal, truckload, and less-than-load services.
A good retail consolidation program allows the entire supply network to comply with retailers’ requirements while also increasing visibility, reliability, and quality of product. Overall, this creates value for the shipper and end-customers through improved service. Everyone wins.
Given the benefits, there’s a clear case for implementing a retail optimization strategy when it comes to ensuring quality and safety of food, given the logistic complexities involved with managing perishables.
Bass, director of sales at AFN Logistics, has held several positions at AFN, giving him broad experience across operations, carrier relations, and developing supply chain solutions. Reach him at email@example.com.