July 6, 2017
Would you ever ship dry, non-perishable goods on a temperature controlled trailer?
Most often, the answer would be no. Temperature-controlled trucks can present higher costs and lower capacity than traditional vehicles. Reefers are 10-20% more expensive and cold chain as a whole can be as much as 50% more expensive.
Note: Temperature controlled vehicles, including refrigerated trucks (reefers), are just one part of the cold chain. The larger cold chain refers to all points where a product may require temperature management – production, storage, distribution, etc. – in addition to required equipment.
Yet, in a recent scenario, Zipline Logistics helped a client realize transportation savings by taking this exact approach.
Being unbiased with logistics strategies can help cut transportation spend and open doors to new capacity solutions. There is always potential to approach a freight issue differently than it’s been handled in the past, even if the previous method was successful.
So, what prompted our customer to explore using a more expensive mode for transport of a dry product, and how did it save them money?
Creativity with Refrigerated Trucking
The customer, a beverage producer, was introducing a new temperature-controlled SKU to its product mix. At first, they were shipping their established, shelf-stable product via less than truckload (LTL) to customers and then also shipping their new product via refrigerated LTL or partially loaded refrigerated full truckload (FTL) to surrounding, often identical, receivers.
Noting that there would be no negative impact to the dry product if shipped at a lower temperature, Zipline Logistics explored the possibility of combining order volumes to cut costs.
Note: Food and beverage products must adhere to strict transportation guidelines set forth by the Food Safety Modernization Act (FSMA). Some foods can’t go above or below certain temperatures and many are restricted to what other products they can be transported with. These rules help prevent contamination and prolong shelf-life, but can often make logistics and consolidation tricky.
It was determined that consolidating all SKUs onto a refrigerated trailer would allow the customer to slash its transportation spend. Rather than paying for multiple LTL shipments, or partially loaded trucks traveling empty miles, they were able to limit expenses to just a singular reefer truck.
To be exact, the cost for 9 pallets going from NJ to FLA on a refrigerated truck was $1,950. By consolidating 9 additional pallets of dry product to the order and having the driver make 1 stop-off for an extra $200 the rate for delivery of 18 pallets was just $2,150.
Cold Chain Logistics Solutions
This situation is not all that unique in today’s beverage marketplace. Ingredient and formulation trends in the beverage industry are pushing for the use of more temperature-controlled forms of transportation and production. For many, this means expensive shipping and handling as they add new SKUs to their product mix.
To combat the reality of lower capacity and higher costs with temp-controlled shipments, find a third-party logistics (3PL) service provider who will step up and identify unconventional solutions and savings for your operations. Cold chain logistics challenges can be overcome with the support of a logistics partner’s expertise and ingenuity.