Aiming High
According to the Lombard, Ill-based Council of Supply Chain Management Professionals, logistics represented 17.9 percent of the U.S. gross domestic product back in 1980. But that percentage is down to 7.7 percent today, thanks in large part to an industry emphasis on continuous improvement.
Today’s logistics companies aren’t content to rest on their laurels, however. New technologies, facilities and more aim to further improve efficiencies and bring down costs for customers, including retailers participating in the store brand space.
Focused on fuel savings
At least two logistics companies recently made improvements intended to increase mileage per gallon across their truck fleets.
In January, Ryder System Inc., a Miami-based provider of commercial fleet management and supply chain solutions said it became the first national maintenance service provider to convert its entire bulk-oil program to low-viscosity high-efficiency engine oil The oil now is being used to service all Ryder lease rental and maintenance customer vehicles as part of the company’s Preventive Maintenance program Using the more efficient oil will allow the company’s customers to achieve as much as a 1.5 percent improvement in fuel economy. In addition the move will slash carbon dioxide emissions by approximately 120,000 tons each year.
“As a leader in our industry, we have a unique opportunity and ability to improve cost efficiencies and reduce the environmental impacts of our operations, as well as those of the tens of thousands of customers we serve,” said Scott Perry, Ryder’s vice president of supply management and global fuel products. “This initiative is the latest example of proactive steps we take to continually improve the performance and sustainability of our customers’ fleets.”
Fuel-efficiency enhancements also were one of the goals of RJW Transport, Woodridge, Ill., when it implemented TND 760 fleet management devices across its fleet last year. The devices, from Rand McNally, Skokie, Ill., also allow the provider of customized logistics solutions to automate hours-of-service logs and fuel tax reporting.
Five weeks after implementing the devices, Kevin Williamson, president of RJW Transport, reported a fuel savings of 0.8 miles per gallon, representing a $50,000 savings.
“But what’s been a truly unexpected benefit are the significant improvements in our fleet production — drivers are logging more miles, and we’re improving our fleet management with reporting provided by Rand McNally’s Connect Web Portal,” he said.
Expanding capabilities
The addition of warehousing and other facilities in areas across the country also helps to reduce costs by reducing the number of miles products must travel. Several logistics providers recently expanded operations here to better serve customers.
Atlanta-based Americold, a temperature-controlled warehousing, transportation and logistics company for the food industry, announced the opening of a new facility in Heyburn, Idaho, last fall. The 160,000-square-foot temperature-controlled building has the capacity for more than 17,000 pallets made up of 10,000 steel-racked and 7,000 bulk-storage positions.
Americold said it would condition the facility to accommodate the local dairy and agricultural market. The fully secured building, with 10 truck and seven rail dock doors, is able to maintain temperatures ranging from −5 degrees Fahrenheit to 50 degrees Fahrenheit. A full suite of services — including cross-docking, labeling and ticketing solutions, product tempering, and export full-truck load and LTL consolidation — will be available.
“Our customers have told us — and our research has shown — that the Magic Valley region is poised for exponential growth potential in the dairy and agriculture industries, and the demand for temperature-controlled, secure storage is rapidly increasing,” said Fred Boehler, president and COO of Americold. “We’re very pleased to open this facility to accommodate current needs and future demand. The facility’s close proximity to the Union Pacific rail line and I-84 provides customers greater transportation alternatives to suit their distribution models.”
The Heyburn facility is the company’s third campus in Idaho, complementing the Burley and Nampa locations, Americold said.
Also last fall, Federalsburg, Va.-based H&M Bay Inc., an LTL logistics provider within the frozen and refrigerated commodity space, announced the acquisition of a 68,000-square foot warehouse and consolidation facility outside of Dallas. The facility offers a 9,000-square-foot freezer/cooler and allows H&M to provide less-than-truckload service for shipments originating in Texas, Louisiana, Mississippi, Arkansas and Oklahoma to the 48 contiguous states.
“Expanding our capabilities in this region will mean increased services to our customers and allows us to be even more competitive in the temperature-controlled LTL market,” said Walt Messick, H&M’s chief operating officer.
And last summer, Allen Distribution, a Carlisle, Pa.-based third-party logistics provider, announced its intent to construct a 500,000-square-foot warehouse in the Mid-Atlantic region’s busiest transportation corridor along Interstate 81 in Carlisle. The new facility features 50 dock doors and more than 100 trailer parking spaces; it consolidates the space of five smaller leased spaces and brings Allen’s total distribution capability in the area to nearly 3 million square feet. The facility features high-efficiency lighting with motor sensors, as well as more than 200,000 square feet of cooler storage.
“Our new facility offers additional scale to support our growth and the growth of our customers while solidifying our position as a leading provider of custom logistics services,” said Ryan Heishman, president of Allen Logistics. “We’re extremely pleased to be able to offer customers even greater service capabilities from one of the country’s most strategic logistics locations.”
Focused on sustainability
A number of logistics efficiencies aim to not only drive costs down, but also reap environmental benefits. Recognizing that reality, CHEP USA, a provider of managed pallet pooling solutions with its headquarters in Atlanta, joined The Sustainability Consortium (TSC) last spring. The company is part of the TSC’s Packaging Sector Working Group, as well as the organization’s Transportation Committee.
As an active member of TSC, CHEP said it will work with other industry, civil society, academic and government stakeholder experts representing $2.4 trillion in revenue to drive improvement in product sustainability across the consumer goods industry.
“Sustainability is one of our shared values at CHEP, and is reflected in the pallets that we use and our pooling business model, which offer significant sustainability advantages,” said Vishal Patell, vice president, retail supply chain solutions at CHEP USA. “We are committed to using resources more efficiently, minimizing waste and encouraging the sustainable use of our products and services. The expertise and knowledge that can now be exchanged between CHEP and The Sustainability Consortium will advance the sustainability mission of both organizations while benefiting the supply chain.”