<p>By: Doug Baker, Vice President, Industry Relations, FMI <br /></p><p><img src="https://www.fmi.org/images/default-source/blog-images/man-in-warehouse.tmb-large-350-.jpeg?Culture=en&sfvrsn=5f7402df_1" style="float:right;margin:10px;" class="-align-right" alt="Man in warehouse" sf-size="1372837" />In the fast-paced food industry, time is of the essence for both shippers and receivers. When a replenishment order is placed by a retailer, suppliers must act quickly to ensure their products arrive on time and in full. This demand for speed and efficiency is essential for maintaining a seamless supply chain and meeting consumer expectations.</p><p>Fortunately, recent developments have eased some of the pressures previously faced by the industry. Challenges related to transportation capacity, supply chain disruptions and employee recruitment have seen significant improvement. Additionally, the average out-of-stock rates have dropped dramatically, reflecting the positive impact of these changes.</p><p>These improvements are largely due to strategic investments in supply chain technologies aimed at enhancing speed and boosting efficiencies. Collaboration between retailers and suppliers has also proven to be a critical tool in overcoming supply chain hurdles, driving progress and innovation across the industry.</p><p>Despite these advancements, there is still considerable room for improvement. The recently released <a href="https://www.fmi.org/forms/RedirectForm/?dest=https%3A%2F%2Fwww.fmi.org%2Four-research%2Fresearch-reports%2Ffood-retailing-industry-speaks&utm_campaign=supplychainforum24&utm_source=blog_SCF24_August2024&utm_medium=blog">The Food Retailing Industry Speaks</a> 2024 report highlights that while supply chain and transportation capacity issues have become less problematic for retailers and suppliers in 2023, significant gaps remain. The percentage of retailers experiencing negative impacts from trucking and transportation capacity dropped sharply from 79% in 2022 to 35% in 2023, with a similar decline for suppliers.</p><p>One of the major barriers to reliable transportation capacity is the reliance on outdated systems and manual processes. To meet market demands and reduce inefficiencies, the food industry has been focusing on building capabilities through technology. However, transportation challenges persist, driven by factors such as driver shortages, regulatory and environmental challenges, infrastructure issues, supply chain disruptions, demand volatility and macroeconomic factors.</p><p>Addressing these challenges requires a multifaceted approach, combining strategic planning, investment in technology and collaboration among all stakeholders in the supply chain. Freight costs typically account for about 5% of the cost of goods sold or roughly 3% of sales for food companies. With numerous macroeconomic factors influencing the cost of transportation, it is crucial for companies to find ways to optimize their logistics operations.</p><p>One promising solution is collaborative transportation, which is gaining momentum within the industry. By sharing shipping lanes, potential industry partners can put aside competitive concerns and work together to drive supply chain performance benefits. Collaborative transportation networks establish shared transit lanes, reducing the likelihood of trucks traveling with empty miles, thus improving cost efficiency and financial performance.</p><p>Beyond the financial benefits, collaborative transportation also presents sustainability opportunities. Companies that participate in these networks can reduce their carbon emissions by taking inefficient or empty truckloads off the road. To successfully implement collaborative transportation, companies must identify potential partners, align routes and lanes and engage in continuous reporting to understand what works and what doesn’t.</p><p>To further address transportation challenges, the food retail industry can take several strategic steps, including investing in technology, enhancing workforce management, engaging in collaborative planning, ensuring regulatory compliance, implementing green logistics and employing data-driven decision-making.</p><p>These topics, along with other innovative strategies, will be explored in depth during the <a href="https://www.fmi.org/forms/RedirectForm/?dest=https%3A%2F%2Fwww.fmi.org%2Fsupply-chain-forum&utm_campaign=supplychainforum24&utm_source=blog_SCF24_August2024&utm_medium=blog">FMI Supply Chain Forum in Nashville on September 16-18, 2024</a>. This event offers a valuable opportunity for industry leaders to connect, share insights, and collaborate on solutions that will shape the future of transportation in the food industry.</p><p>We look forward to seeing you in Nashville as we continue to drive progress and innovation in the food retail supply chain. </p><p><a href="https://www.fmi.org/supply-chain-forum?utm_campaign=supplychainforum24&utm_source=blog_SCF24_August2024&utm_medium=blog" class="button">Register today</a></p>
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