Improved Trailer Utilization for Direct Shipments

Negotiated arrangements between a contract packer and key customer to improve trailer utilization on direct shipments.


Company

US alternate channels division of multinational Fortune 500 food company


$242,000 Annual Freight Savings

Reduced Inventory

Situation

  • Distribution network capacity was strained at peak periods.
  • Significant volume of some items was packed into final consumer format at a large copacker, mostly for alternate channels.
  • Company did occasional direct shipments of single items from copacker to large customers, but only single items direct from production.

Solutions

  • Negotiated agreement for copacker to hold inventory to build mixed loads for direct shipment to large foodservice distributor.
  • Developed process for company customer service and distribution planners to reserve inventory at copacker for direct shipments.
  • Worked with copacker and company IT to develop process to track inventory at copacker, reserve for specific shipments, and schedule shipment once all items were produced.

Benefits

  • $242,000 annual freight savings through better trailer utilization.
  • Reduced inventory at company DCs by increasing direct shipments from copacker.