To many, customer pick-up (CPU) arrangements appear like a simple method for circumventing the challenges of getting their product to distributors. After all, with CPU, the customer handles picking up your product from your facilities, which seemingly eliminates the time-consuming day-to-day execution of transportation scheduling.
But what is not always obvious is how surrendering control of your operation in exchange for CPU arrangements can cause greater logistics headaches and downstream effects for your organization than prepaid shipping.
This notion is especially true when working with distributors like UNFI. These organizations are often a necessary intermediary for brands aiming to secure shelf space at retailers like Whole Foods and others that use distributors.
However, that does not necessarily mean that arranging a CPU agreement with a distributor is the best choice for a young or established brand. Often, those arrangements can subject shippers to unnecessary risk and loss of supply chain control—two issues that can spell difficulties for small, mid-cap, and even large brands.
Before we discuss the approach vendors should consider for their distributor relationships, let’s dive into the basics of CPU and shipping specifications of many distributors.
What is Customer Pick-Up or CPU?
Customer pick-up refers to an arrangement between a vendor and, in this case, a distributor that calls for the distributor to collect orders. These pick-ups typically occur at a manufacturer’s or third-party partners’ facilities.
That sounds like it would be ideal, especially for brands that do not have sophisticated logistics departments. But issues can occur when you surrender control of your deliveries and subsequently parts of your supply chain.
Specifically, your organization can miss appointment times, incur warehousing costs, jeopardize retail relationships, create more work for staff, and cause downstream ripple effects that can impact your bottom line. That is especially true when working with distributors because of their requirements, which are not relaxed for brands that opt for CPU.
Why Customer Pick-Up Doesn’t Work at Distributors
As part of a contract with your organization, distributors will offer to pick up your product from your warehouse and store it in theirs before transporting it into a retailer’s supply chain.
While tempting for many, letting a distributor manage your transportation can cause service failures.
Distributors schedule pick up when it makes the most sense for their network, not necessarily yours. Without scheduling the appointment yourself, you lose the ability to set and monitor when a truck will arrive to grab your order.
This arrangement can cause issues as you might not have the lead time needed to prepare a delivery adequately. If this were to occur, the scheduled carrier will likely leave your product and require you to reschedule, which can result in missed appointment times.
These appointment misfires are always the vendor’s responsibility when working with a distributor, even in CPU arrangements. Your organization will be fined by the distributor as well as tasked with finding a delivery alternative.
And even more damaging than fines and fees for missed appointments, is the reverberation that can come as a result. Consistently missing appointments, even if they are due to poorly coordinated customer pick-ups, can also jeopardize your space on store shelves.
Furthermore, your organization will need to pay for warehousing space while waiting for a new pick-up. This can sometimes take weeks and even months before a new pick-up is arranged, which can throw your production facilities and parts of your supply chain into misalignment. Missed pick-ups require considerable time for your personnel to rectify. With a more brand-favorable approach, you can eliminate many of these issues.
What Should Shippers Do in Place of CPU?
Organizations of all sizes and levels of sophistication can benefit from consistently choosing delivered pricing options at distributors. Doing so allows brands to execute greater control and maintain the visibility of their deliveries.
If aiming to eliminate the time-consuming and challenging aspects of managing multiple deliveries into distributors like UNFI, brands can work with specialized logistics partners to manage these orders. This strategy still allows shippers to simplify parts of their day-to-day logistics duties while maintaining the critical competencies of control and visibility.
What Makes Delivering to Distributors a Challenge?
Now that we have discussed why CPU is often wrought with issues let’s look at why working directly with a distributor can cause its own set of difficulties.
Distributors, like UNFI, often have difficult receiving hours that occur in the early morning or late-night. These requirements can make it challenging to source capacity.
These receiving hours can change from warehouse to warehouse even within a distributor’s network. Successful delivery for off-hours requires a carrier that has adapted their schedule to meet these timelines.
It can be burdensome to find a trusted carrier that understands these receivers without consistently working with distributors.
A retail-specialized logistics provider can pair your organization with a driver who is familiar with specific.
Carrier Choice for Distributors
One of the most challenging aspects of delivery into a distributor’s supply chain is choosing the right carrier. Hundreds of carriers will pick up your product, but far fewer will execute delivery as you intend.
Some of these nationwide carriers do not deliver into a network. Unfortunately, the carrier will not always disclose this information prior to arranging shipment. And preferred carriers can change from warehouse to warehouse even within a singular distributor’s network.
Conversely, some carriers that will not make deliveries into most of a distributor’s network are the preferred carrier at another location.
For example, a nationwide carrier will not deliver into the overwhelming majority of UNFI locations throughout the country; however, they are a preferred carrier for a specific California location.
Meeting Retail Delivery Requirements
Complying with retail delivery requirements is crucial for long-term success. Suppose you are late with the delivery of your product to the distributor. In that case, even if it is out of your control, the chances of meeting on-time delivery are drastically reduced.
Since distributors work with hundreds, your product can be quickly replaced on a shipment ensuring that the distributor does not leave a retailer with out-of-stocks.
Work with a Specialized Logistics Provider
There is a lot to consider when beginning or continuing a relationship with a distributor. By not meeting delivery appointments with a distributor, you can permanently damage your retail relationships through missed customer pick-ups or poorly executed shipments.
To set your brand up for the best outcomes, consider working with a specialized logistics provider that understands what is at stake for your brand.
Zipline Logistics works with CPG shippers on a consultative level to excel at their retail-bound deliveries. Want to see the difference specialization can make?