Some distribution center parking lots might start looking less crowded if certain transportation trends continue.
“Retailers are asking themselves how many suppliers are making deliveries and what is the right number?” said Bud Floyd, vice president of produce marketing for Eden Prairie, Minn.-based C.H. Robinson Worldwide Inc. “It takes time and energy to manage the flow of goods.”
Floyd said many receivers would rather have product consolidated on one truck by a third party rather than trucks from 10 shippers show up at their distribution center with two or three pallets each.
Floyd, whose company has four product consolidation warehouses around the nation, said handling less-than-truckload quantities is more costly and comes with a bigger carbon footprint.
Senior business development manager Mike Janiszewski said consolidation is a big business for Ephrata, Pa.-based Sunrise Logistics Inc., which is a subsidiary of Four Seasons Produce Inc., Ephrata.
“We recruit business from grower-shippers going to common receivers,” he said. “It benefits the grower-shipper because we can do it more efficiently than they can. It benefits the receivers because they’re seeing fewer trucks through their gates.”
Janiszewski said East Coast customers dealing directly with West Coast shippers have to order seven to 10 days ahead of time.
“They can call us two days before delivery now,” he said. “We pull it out of our inventory. It’s a better program for the receiver, and there’s less inventory management.”
That doesn’t mean there isn’t still demand for less-than-truckload deliveries.
Chuck Nelson, president of Chuck’s Transport Inc., New Braunfels, Texas, said his company specializes in less-than-truckload business from south Texas.
“We might have six customers on one truck, but it goes to one city,” he said. “There’s still a lot of mom-and-pop stores and smaller stores. They’re not Wal-Mart or SuperValu, but they’re out there competing.”
Director of logistics Mike Laws said Edinburg, Texas-based Frontera Logistics, a subsidiary of Frontera Produce LLC, Edinburg, offers consolidation services, but the shipments going to individual receivers aren’t necessarily full truckloads.
Laws said he has seen increased demand for smaller and more frequent deliveries, which allows receivers to use smaller warehouses and manage less inventory.
“It comes in the front door, and three hours later it goes out of the back door of your distribution center to a retail facility,” he said. “It reduces shrink. It’s a trend that makes sense as we look at the economy. Everyone is looking at it.”