Transportation makes the difference in Food Logistics

Posted by Dieter Roman on 30/09/2016

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Coconut water, granola’s, pomegranate superfoods or berries & seeds organic paleo raw bars... A quick scan in a retail shop makes it already clear — food trends come and go with the passing of time.

This makes the food industry so challenging. Every day there is a new trend or product. And consumers want it immediately available at their local grocery shop or order it online (same day delivery of course – what else).
Food logistics can or…?

 

Taking a fresh look at the food industry

Food industry and food logistics are facing enormous challenges these days.

  • ensuring product safety (from field to shelf)
  • escalating prices to transport (raw) materials.
  • more demanding customers
  • rapidly deliver new products
  • trimming cycle times

And of course, food companies must solve all these issues in the most environmentally friendly way.

 

Transportation is the next big thing in food

A recent study in the food industry in US stated that:

83 percent of food supply chain leaders identifies transportation as their top concern. 5 years ago transportation was not even mentioned in the top 10…

The biggest concerns in transportation are structural:

  • Focus lies on capacity and planning constraints.
  • Complexity and transparency is high on the food logistics agenda.
  • Tracking and tracing requirements are greater than ever.

The admirable goals of trimming transportation costs and boosting supply chain efficiency must be balanced against customer demands, and that’s another ball game. It isn't easy to satisfy local groceries' desire for smaller, more frequent deliveries, for example, while consolidating shipments into full truckloads on the other side.

 

Focus on technology

The future of food logistics is paved with technology and innovation. Drone deliveries, driverless vehicles, 3D printing, … New technologies will change the way we think and work in the next 5 to 10 years. But even today apps, mobile point of sales, (cloud-based) software and algorithms are already in place to provide cheaper, faster, reliable and sustainable deliveries. Retailers are more than willing to embrace these latest technologies to create logistical advancements for the coming years.

The “supply chain efficiency” game has started. In 2014, the average logistics cost reduction was 9%. And the average inventory went down with 5%. So a 15% win. The overall expectation is that it will further rise in the next years as technology and automation will be playing an even more important role. The “logistics cost-cutting strategy” is not only a planner’s issue anymore. Food producers become aware that transportation and logistics are key differentiators with a considerable competitive advantage.

Transportation is no longer a tactical decision influenced only by cost. It has become a strategic management issue based on factors as customer experience, sales channels, product design, and product availability.

Staying competitive and winning market share is the ultimate goal.

 

Topics: Route optimization, Transport, Research

Dieter Roman

Written by Dieter Roman

Digital Marketing Manager