Food retailers and wholesalers are just starting to use the Internet to negotiate the dangerous curves on the transportation and logistics highways.
"There is very little Internet usage being done, if you look at the big picture," said Richard Kochersperger, a Philadelphia-area logistics consultant.
However, with the recent relaunch of Web portal Food FleetXchange.com amid hopeful projections of increased volume (several hundred million dollars in 12 to 24 months), the landscape could change (see SN Sept. 24).
Two operators willing to be early adopters in this arena include Nash Finch, Minneapolis, and Roundy's, Pewaukee, Wis.
In recent interviews with SN, both operators said they are beginning to see some cost savings from participating in the recently revamped online transportation exchange, Food FleetXchange.
"The Internet is a more efficient communication tool," said Christopher Brown, executive vice president of merchandising, Nash Finch.
"It gives us the opportunity to explore our savings and other efficiency opportunities. It also streamlines the sharing of data so that companies can come together on the same platform.
"Some Internet sites have benefits, others have little to none. We look at the Internet not as a tool, but an information stream with leverage," Brown added.
"The Internet is a better conduit to behaviors already there. These are not new behaviors. The Internet has allowed communication to speed up tremendously over phone and fax methods," Kochersperger said.
For now, the main source for using the Web to improve transportation and logistics efficiencies is coming from the joint effort between Food Distributors International, National Grocers Association and Cherry Hill, N.J.-based logistics provider AmeriQuest, operators of Food FleetXchange.
These organizations partnered to take over a fledgling transportation and logistics exchange started about a year ago.
They relaunched the site on Aug. 1
The site is aimed at the procurement of maintenance, repair and operations supplies, including tires, lubricants, batteries, brakes, engines, transmissions, tools, truck bodies, shop tools and lift trucks.
In some cases the technology of Food FleetXchange.com is secondary.
The hope is the leverage of the trading partners will result in lower pricing because the speed at which transactions can be processed and the paperless possibilities bring cost-saving benefits to users.
Site members are also eligible for rebate opportunities as a part of the total program.
Site officials report that this portal is different than those that have come before.
Nash Finch, for one, is hoping to gain a competitive advantage.
"There is a tremendous source of information [on Food FleetXchange.com] that will help lower the acquisition costs by enabling a network of sourcing broader than what we currently have," said Brown.
"It isn't the program we have in place that is expected to bring immediate payback, it is the addition to what we have -- bringing a broader scope of vendors, rebate programs and the like -- that will assist us in lowering the cost of acquisitions."
The immediate benefits Nash Finch has encountered using Food FleetXchange.com have been lower costs as a result of having better access to systems and parts.
"Via the exchange, a deeper amount of information is available," said Brown. "We intend to look at it and make something of it.
"First off, we can take the whole list of vendors and analyze where we can get more efficient. It's an additional tool in keeping with our focus of lowering our cost of goods."
Nash Finch had previously used the Internet for internal projects and communications between the wholesaler and its vendors.
Opportunities with transportation and logistics had also been explored, Brown said.
Fulfillment is one major strategy Food FleetXchange.com has shifted to existing dealer networks.
"There are additional soft benefits to a site like this," said Kochersperger. "There is information that will make people better informed and help them to make better decisions."
The site also includes trade journal article links, an "ask the expert" area and chat-room-style areas, plus up-to-the-minute information on fuel pricing and weather.
Roundy's is another operator using the Food FleetXchange.com program.
"The FDI connection sparked my interest," said Russ Weber, corporate director of transportation.
"But the ability to ask Fleet questions or talk to competitors in a noncompetitive environment gives me the chance to problem-share and discover ideas on a range of topics such as interoperation of laws and regulations.
"This aspect makes the site larger than simply addressing purchasing-side issues," Weber added.
The site also keeps visitors up to date on breaking news.
This provides Weber with a one-stop-shop for reference materials.
"It also gives our divisions the opportunity to look at topics that give a commonality to all nine divisions," he said.
"They each can look at information on maintenance or changes in laws. This brings us all closer together. Web sites in general are glitzy and full of hype. There is very little practical use. This one, I walk away from feeling value."
On the corporate side, Weber can view pricing in order to stay involved and keep in touch with his company's vision on procurement.
"These connections drive people to stay involved with the process," said Weber. "This exchange allows everybody to stay involved. Other exchanges have not made the local connection and have lost big when it came to relationships. They helped people lose touch."
FDI members say the main criticism of the site is that the number of vendors is low; however, more are being added to meet that challenge.
Others report that the pricing was not as good as they had hoped, or that the items/brands offered were ones they did not usually use.
Companies are also exploring how the Internet can improve logistics, said Kochersperger.
Trips can be posted on Internet sites for trucking companies to bid on, and the Internet is also being used as a resource to locate third-party providers.
"Rather than going through a broker, now logistics people are going through Web sites."
Consolidation of services is another option operators are eyeing while exploring the capabilities of the Internet. Communications and information exchanged through the Internet allow some companies to pool products to get a full load.
"The Internet simply gives us more tools available in one place and in good time," said Kochersperger.
Operators report that the added benefit of Internet usage is stripping out some costs through systems.
Distributors have been able to consolidate traffic departments, in some cases eliminating divisional departments.
