Create Capacity while Balancing Service and Rates through ...
-
Upload
khangminh22 -
Category
Documents
-
view
1 -
download
0
Transcript of Create Capacity while Balancing Service and Rates through ...
Create Capacity while Balancing Service and Rates through Collaboration
Panel Facilitator: Paul Newbourne, SVP Operations, Armada
Annual Conference
March 1-3, 2015
Agenda
• Panel Introduction
• Discussion Overview
• Tyson Foods
• Naturipe Farms
• McCain Foods
• Q&A
Today’s Panelists
• Lori Lammers, Director Transportation, Tyson Foods
• Rick Burden, Director of Trans. & Logistics, Naturipe Farms
• Charles Penrow, III, CSCP, Manager Logistics, McCain Foods
Changing Transportation Market
• Truckload utilization at historic highs
• Ongoing shortage of qualified drivers
• More difficult capital funding conditions
• Recent upward trend in carrier bankruptcies
• Increasingly complex regulatory environment
• Steadily improving economy driving demand
• Service and budget reliability feeling the effects
Key Carrier Priorities
• Carriers are and will continue to fine tune their operations:
– Adjusting rates or dropping inefficient customers:
– Those who take > 1 hour to load/unload
– Those who require extended transit lanes
– Those that have high day of the week volume variability
– Those with freight with undesirable handling characteristics
– Mandating changes in detention rules and fuel surcharges
– Migrating to truly “customer of choice” model
Key Carrier Customer Of Choice Criteria
• Level, breadth and potential of business:
– Multi modal “buy” (OTR, IM, Brokerage, etc.)
– Growth potential (volume and margin)
• Business philosophy:
– Bid Frequency and Administration
– “Fair” Accessorial and Fuel Schedules
– Collaboration versus Transactional
• Proactive Risk Mitigation Practices
• Financial Risk/Return Considerations
• Effective two way communication
The Tyson Foods Team
124,000 Team Members
11,000
Independent Farmers
130 + Countries
5 In-Country Operations
FY14 Sales $37.6 Billion
2014 Average Weekly Production
Chicken 41.4 million chickens
Beef 133,000 head
Pork 383,000 head
Prepared Foods 73,100,000 pounds
2014 Transportation Demand Nearing
Truckload 800,000 refrigerated
7,000 bulk
Rail 4,500 reefer
9,000 tank/hopper
Ocean 29,000 containers
65,000 metric tons break bulk
Facilitate Collaborative Relationships
with Knowledge and Communication
Be knowledgeable of the industry
Be trustworthy
Provide access to multiply layers of management
Give and request regular feedback
Allow decision making at the right level
HORTIFRUT • Leading producer of
Chilean Blueberry industry • Vital Berry integration
completed June 2013 • Pioneering leader of
organic blueberry production
• 300+ growers in Chile, Argentina, Uruguay, Mexico, Guatemala, USA and Europe
• 3 generations in farming since 1971
• Largest California blueberry grower
• Innovators: infused berries; ready-to-eat
MUNGER FARMS
• Strawberry industry leader since 1917
• Producer of proprietary strawberries, raspberries and blackberries
• Growing in California, Florida and Mexico
NATURIPE BERRY
GROWERS
• World’s largest grower cooperative of cultivated blueberries
• Grower-owned co-op since 1936
• Growers located in all major US growing regions from Florida to the Northwest & BC Canada
MBG MARKETING
Naturipe Farms Transportation Model
• 90% of full truck loads on asset based trucks
• Consistent best in industry equipment
• On time delivery on delivered loads above 99.5%
• Temperature issues extremely rare which eliminates majority of truck claims
• Real time temperature and truck position monitoring on all full truck loads
• Remaining 10% on broker based trucks
• Brokers with expertise in hauling berries • Most carriers can haul produce, very few can haul berries
Win-Win: Mandatory • With asset based carriers, shippers aspire to be on the “A” list
• Take care of your carriers when the economy is tough and the carriers will take care of you when the economy is good!
• Benefits of being on the “A” List:
• Capacity during crunch times
• “A” List shippers will get “A” List trucks during crunch times
• Consistent contract rates
• “A” List = Happy Drivers = Happy Shippers
• Fast payments so carriers can pay the drivers
• Treat drivers with respect at pick points
• Great advantage if drivers want to haul your loads
• This equates to premium drivers = good deliveries
• Clean facilities for drivers at pick points
True Relationship
• Establishing Trust
• Claims, with berries, take temperature as an issue out of the rejection or issue and eliminate 99.9% of truck claims
• Know who to fight for and when
• TONU, deadhead and waiting charges
• Fair rates = not beating up the carrier when capacity is high and they won’t beat you up when capacity is tight
• Overall, rates and service must create value for your company
Challenges Going Forward
• Challenges
• DOT/driver hours
• Driver shortage and turnover
• Delays increasing with receivers
• Some receivers forcing fees for missed appointments etc.
• Inconsistent lumper fees
• Continued consolidation of small to medium sized carriers to the larger carrier/brokers
• Refrigerated LTL
• Risk of LTL and cost increasing year over year
• Founded February 23, 1957
• New Brunswick, Canada
• 18,000+ employees
• Privately Held / Family Owned
• World's largest producer of French Fries and other oven-ready frozen food products (appetizers, frozen pizza and desserts)
• Supply one-third of the world's frozen French Fries products
• Distribute in more than 160 countries
• 46 production facilities spanning six continents
• $7 B (CAD) Annual Sales
• 19th largest private company in Canada
Company Background
• Business Segments
• Food Service
• College / University
• Convenience Store
• Government / Military
• Healthcare
• Hospitality
• In-Store Deli
• Ingredient Businesses
• K-12 School
• Multi-Unit Chains
• Retail
• Grocery
Company Background
Better Carrier Collaboration (CRM – Carrier Relationship Management)
• Focus on attributes to become a ‘Strategic Partner’: • Long Term Agreements – 3 year RFP cycle versus annually • Limit number of providers to select partners
• Asset based focus • Route Ownership
• Origin to Region • By Origin • By Direction
• 360 Carrier Performance Reviews • Reward Performance annually • Partner on cost savings and/or service opportunities
• Ex. Mode shift from OTR to IMDL • Onsite embedded resource opportunities when appropriate and viable.
Better Carrier Collaboration (CRM – Carrier Relationship Management)
• Focus on attributes to become a ‘Shipper Of Choice’: • More lead time • Consistent volumes • Routine shipment patterns • Multiple shipment opportunities using the same driver • Relay moves • Better turn times (loading / unloading)
…opportunity for drivers to have a known schedule and carriers to build stable network capacity.