TORONTO -- Food FleetXchange -- a free, consolidated, online transportation buying service for members of Food Distributors International, Falls Church, Va., and the National Grocers Association, Arlington, Va. -- expects to generate several hundred million dollars in volume within the next 12 to 24 months.
During a press conference here during the FDI's Midyear Executive Conference, Joe Ciolino, executive vice president, corporate development/sales, AmeriQuest, Cherry Hill, N.J., and general manager of the Food FleetXchange, made the projection while also presenting an updated list of vendors to the program. This followed a formal presentation about the revamped Internet exchange, launched on Aug. 1, to the boards of both organizations.
To date, the transportation buying and informational service developed by AmeriQuest has only just begun to scratch the surface with several million dollars in procurement purchases transacted since its launch last month, Ciolino told SN. Through the FDI's Web site, Food FleetXchange has received 12,000 hits from approximately 40,000 transportation professionals from the food sector who have registered.
In terms of procurement, Ciolino said between 20 to 30 major food companies are conducting business on the exchange. He mentioned Roundy's, Pewaukee, Wis., and Nash Finch Co., Minneapolis, Minn., as two companies that procure equipment through the portal, but Ciolino declined to name others, citing sensitivity over company confidentiality.
He expects between 25% to 50% of FDI and NGA members will be registered and procuring transportation supplies within the next 12 to 24 months.
The joint exchange was formed to provide FDI and NGA members with significantly discounted prices and rebates for transportation fleet products and services, such as tires, lubricants, brakes, tractors, transmissions, engines and forklifts. The joint venture brings together the buying power of more than 100,000 power units from both organizations.
Steve Smith, president and chief executive officer, K-VA-T Food Stores, Abingdon, Va., told SN "the initial process has promise to it. There are a few key items in which we are comparing pricing to see if it is efficient for us." K-VA-T presently works with a third-party, truck-maintenance company. The retailer owns 90 power units (commercial vehicles that burn fuel) and over 300 trailers.
Ciolino said that approximately 35% of the food industry may outsource its transportation needs to third-party leasing or service-maintenance companies such as AmeriQuest Transportation and Logistics Resources. Such companies would have less of a need for transportation procurement services but could still use the portal for its information content and other kinds of procurement, such as materials handling. A new vendor is Yale, which supplies forklifts.
With 450 locations across the country, AmeriQuest offers a full line of transportation, logistics and maintenance services. It is one of the country's top transportation and logistics companies supporting independent leasing companies such as Hogan Leasing and Rental and Transervice; both supply food retailers and wholesalers. Between the food sector and independent truck-leasing and rental companies, AmeriQuest's aggregate volume now represents between 230,000 to 250,000 power units. Ciolino said that about 60% of AmeriQuest's business is in the food industry.
"This is not just another pie-in-the sky promise by some dot-com company with no experience in our industry," said John Block, FDI's president and chief executive officer.
AmeriQuest has negotiated special pricing and rebate agreements based on its aggregate volume with 26 suppliers to date. FDI and NGA members have to meet a minimum fleet purchasing requirement of 50 power units, except in cases of rebate-only offers for big-ticket items like tractors or forklifts. Caterpillar engines, for example, require no minimum purchase. Rebates range from $1,000 to $2,000, depending upon the model purchased.
"This is a milestone for our organizations," said Stu Zlotnikoff, president, NGA Service Corp., during the press conference.
He pointed to the efficiency of the ordering process. The process is paperless. Invoicing is done online through the exchange. Members using multiple vendors who are part of the exchange receive one invoice.
Participants have access to their records anywhere, anytime. They can examine their order history to detect trends or patterns and plan for the future.