MEMPHIS, Tenn. -- Wholesalers need to improve the operations efficiency and overall work environment of their warehouses or they may face a transportation crisis.
That was the warning sounded by manufacturers and truck carriers, who called the wholesale warehouse the weakest link in the food distribution chain. Wholesaler executives countered that all parties share responsibility for warehouse inefficiencies.
Delays in deliveries, stemming from a lack of drivers to inefficient pallet exchange programs and poor communications among suppliers, carriers and wholesalers, are wreaking havoc in the distribution pipeline, said executives during a session at the NAWGA/IFDA Food Industry Productivity Conference here late last month.
Carriers said the typical wholesale warehouse is fraught with productivity problems and that most drivers would avoid those facilities if they could.
"The more we can haul for manufacturers and retailers who have more driver-friendly freight, the less need we're going to have to haul grocery warehouse business," said Jerry Moyes, president of Swift Transportation Co., Phoenix.
"I'm telling you that's coming down the pike and you're going to see a lot more of it," a trend that could lead to severe driver shortages, he said. The driver turnover rate at Swift can run as high as 80% to 100% -- or 4,500 drivers -- in a year.
When drivers have to deal with extra tasks like breaking down pallets or other wholesaler
requirements they weren't informed of, costly delays result. "Wholesalers need to work with suppliers to better package products," he said. "A Sam's Club is much better [than the average food wholesaler] in this area."
Some delays at the warehouse, however, are the fault of manufacturers not following their wholesaler's requirements, said Russell Jahn, corporate manager of traffic, Fleming Cos., Oklahoma City.
"We require product to be delivered in a specific pallet configuration. That requirement is specified on our purchase order, but too often the information is being lost and not being communicated to the carrier," he said. "As a result, the driver is getting an unwelcome surprise when he shows up at the receiving dock.
"Manufacturers and distributors need to jointly develop programs to facilitate product flow from the trailer to storage without any work at the dock," he added. "[But] the supplier needs to understand the terms of the purchase order. They need to communicate our surface requirements to their carriers."
While less-than-ideal working conditions can further reduce an already shrinking driver pool, the trucking industry is also facing intense consolidation, Moyes said. "That's bad news for [wholesalers]," he added. "When trucking firms can haul for companies with more driver-friendly freight, there's less need to haul grocery warehouse business."
"The major carriers are not going to be putting up with the problems we've had over the last five years. Wholesalers need to have a better attitude," he added.
Troubles with trucking are compounded by ineffective pallet exchange programs, some panelists said. Many such programs are wasteful and inefficient, delaying drivers and damaging products.
"Get out of the pallet exchange program. Often our drivers get back a pile of junk and [manufacturers] say, 'We don't take those.' It's not our responsibility," Moyes said.
Though the panelists favored alternatives like pallet pools and plastic pallets, some said the expense of such programs was still a major obstacle.
"You need a pallet that doesn't create damage, a pallet that doesn't cause cost in the system," added Donald Biggs, director of logistics for Welch's, Concord, Mass. "For manufacturers, pallet rental programs are pretty expensive."
Jahn said the main impediment to pallet pooling is that all parties have not yet agreed on how to share the costs. "We fully encourage third-party programs," he said. "We don't have to worry about pallets, and the carriers don't have to get involved in pallet handling."
The panelists agreed the easiest problem to correct would be faulty communication among links in the distribution chain.
"What we really need to be doing is [establish] the communication links we need to have with the vendors initially and our carriers," Jahn said.
"Something close to real-time performance measurement must be established that will permit us to find out exactly where problems are occurring, who we have to deal with and what we can do to fix the problems."