Driving Efficiencies In The
Chain Reducing inventories and tightening delivery cycle
times create ongoing challenges for PRW and cold
transport providers. B Y A L A N R O B I N S O N
HEN PUBLIC REFRIGERATED warehouse (PRW) and value for their own bottom lines and those of their customers.
refrigerated transport operators survey the frozen and re-
r “The general trend in the industry is to trim costs and take waste out of
frigerated food landscape, they see challenges on all sides.
f the system; to not do what you’ve done in the past,” says Mark Petersen,
Consumer demand for frozen and refrigerated foods general manager, C.H. Robinson Worldwide Inc., Eden Prairie, MN.
is strong, but the cold supply chain operators face pressures from pro- Unlike hard goods, the food industry must work within seasonal con-
cessors and manufacturers who want to reduce inventories and move straints. “For perishable foods, there are supply adjustments necessary to
goods more quickly. get products closer to consumption,” says Petersen.
And with their own operating costs on the rise, it would seem rate in- Perishability creates its own demand cycles, on top of the ongoing
creases for the cold logistics providers could be justiﬁed, but telling their demands that “people will eat. Food is going to move one way or
manufacturer customers they must pay more in a severely depressed another,” he says.
economic climate is hard to pull off.
Driving efﬁciencies in the cold chain helps keep everyone on the
same page. If PRWs and cold transportation providers can wring more
efﬁciencies out of the system, they enhance
10 MARCH 2009 • F www.foodlogistics.com
The current economy drives efﬁciencies seeing a downturn on the foodservice side of but we’re seeing a pickup in retail volume.”
too. “We’re seeing a short-term planning ap- the business and some notable shifting within Overall, the economy is impacting what prod-
proach with rationalization for getting the SKU the grocer sector, where consumers are mov- ucts are being stored in cold storage facilities.
base down,” says Richard Kappmeier, senior ing to lower price points in the various frozen “Several of our members store seafood, and
vice president of engineering, transportation and refrigerated categories. because it is a high price item, it may be more
and Western Region U.S. operations, Versa- “We have found that the foodservice side is affected by the downturn,” says Hudson.
Cold Logistics Services, Vancouver, BC. softer with consumers moving toward value While higher price items are on the decline,
Manufacturers and retailers are looking to players like McDonald’s and away from higher- other products are picking up. “Private label
eliminate the slow movers from their product priced restaurant chains,” says Bill Hudson, products are growing at a fast pace,” he points
assortments, says Kappmeier. president and CEO, Global Cold Chain Alliance out. “We are seeing more frozen private label
Cold chain providers have a particularly (GCCA), Alexandria, VA. “With people eating and frozen national brands of prepared foods
keen perspective on the pulse of the food out less, customer business is down.” going to retail.”
industry as they move and store goods for Don Schoenl, president and CEO, Nordic So there are pockets of optimism, says Hud-
vendors who work with both foodservice and Cold Storage, Atlanta, agrees. “We are seeing son, but overall “customers are concerned and
grocery retail customers. They are deﬁnitely a decrease in volume in foodservice in general, that could be translating into lower volumes for
our member companies.”