Retailers and distributors make regular updates to their supplier guidelines and warehouse networks. These changes are often related to billing, packaging, appointment scheduling, hours of operation, and/or chargeback structures. All changes are made with intentions to improve business processes.
Zipline goes in and out of big-box/grocery retailers daily, so we have a strong pulse on these updates and what impacts they will have on our customers’ operations.
So far in 2019, both H-E-B and United Natural Foods Inc. (UNFI) have announced supplier updates.
Here’s what you should know:
Retail Supplier Update: H-E-B Warehouse Unloading Changes
Starting March 18, 2019, product unloaded at H-E-B warehouses will need to be unloaded by H-E-B staff.
Previously, carriers could unload their own trucks and charge 3PLs/shippers for the added service. Drivers could charge a lumper fee for unloading a truck and for additional driver work like restacking or recounting of pallets.
Now, H-E-B will bill suppliers directly for unloading services for supplier managed freight. H-E-B will deduct the unloading service fees from the supplier’s payment.
H-E-B will not bill suppliers for unloading services for H-E-B managed freight but unloading fees will be part of the cost evaluation with CPU (customer pickup) allowances, efficiency programs, and cost of good negotiations.
Additionally, the unloading fees will no longer be based by run-out or pallet. Instead, H-E-B will implement a new unloading rate structure based on warehouse-specific level of complexity.
H-E-B hopes this update will bring cost clarity and help with reducing trailer unload times.
Shippers should pay close attention to billing changes and communicate H-E-B updates to drivers to ensure change is managed smoothly.
Retail Supplier Update: New UNFI Facility in Centralia, Washington
UNFI announced plans to optimize its distribution center network in the Pacific Northwest. This includes the consolidation of five distribution centers into a new 1.2 million-square-foot facility in Centralia, Washington, and a newly expanded facility of 800,000 square feet in Ridgefield, Washington.
UNFI will close its Tacoma, Portland, and Auburn warehouses and expects the Centralia and Ridgefield facilities to be fully operational in the second half of 2019 with customer transition completed in early 2020.
The distributor’s goal is to “enhance customer product offerings, create more efficient inventory management, streamline operations, and incorporate best-in-class technology to deliver a better customer experience.”
Additionally, the organization’s optimization of the Pacific Northwest distribution network will also help deliver meaningful synergies contemplated in the acquisition of Supervalu in October 2018.
Zipline feels that this change will open consolidation opportunities for suppliers. Instead of moving two to three pallets into six locations, shippers could be moving 12-18 into one. This means fewer LTL shipments and more truckload or partial deliveries.
This also means that shippers may need to switch up carrier utilization. Drivers may be willing/unwilling to take on the new routes and volumes. A 3PL partner will be essential for determining optimum cost efficiencies.
If you need assistance with managing H-E-B or UNFI transitions, give Zipline a call.