Meat + Poultry - April 2005 - 44
its long distance and multiple-stop
moves, according to Carlos. "In the
past, we could negotiate the rates
down. For the first few months of the
increase, Simco decreased its profit
margin. Our solutions were to pick
and choose destinations at certain
times," he says. "We try to keep full
truckloads and use carriers that are
used to multiple stops. There is a
fine line between good rates and good
carriers. After that, we raised prices
to our customers, such as raising the
price of hamburger from $0.88 to
$0.95 per pound."
Logistics solutions
Custom Food made changes to
its logistics system to minimize the
freight rate increases. One change was
to increase the load factor, which is
the average percentage that transportation vehicles are filled, by 25 percent
to 35 percent.
"We did this primarily by consolidating shipments, and we are asking
our customers to wait on delivery,"
says Golangco. "Instead of shipping
two 20,000 pound L.T.L. shipments
separately and paying a drop-off fee,
we ship one full container."
Also, by making the box slightly
smaller, Custom Food is able to fit an
extra pallet into the truck sideways.
"Our average load has increased from
35,000 to 39,000 pounds. We sell 90
million pounds of meat and poultry
per year. By doing this we have managed to bring the price per pound for
freight under control. It is lower than it
would have been if we had not acted,"
Golangco says.
Anthony adds, "One way we are
able to minimize costs is by using between 40 and 50 truckers as opposed
to only a few, so that we may receive
more flexible service. Also, we do not
use a freight broker, which saves us
the intermediary fee."
Freight rate increases are affecting
all types and sizes of meat and poultry shippers. Although absorbing the
costs internally or passing them on to
the end user are widely used tactics,
making changes in logistics systemmay also be an alternative to incurring
additional costs.
The author is a freelance writer based
in Washington, D.C.
We would like to hear from you- your comments
and questions about this article are welcome.
E-mail the author at: meat&poultry@sosland.com
BRIDGE1..
I-
VERSATILITY
LIFT
LOADER
J
ER
y
rBMC
1
I BRIDGE
MACHI
CO..
lt
c.
Telephone (856) 829-1800
Fax (856) 786-8147
Write Or Call For Information
P.O. Box 45
www.bridgeon line.com
PaImyi ,New Jersey 08065
sales @bridgeonline.com
For more information, see Page 65
www.MEATPOULTRY.com
I
April 2005
I
MEAT&POULTRY
I
45
http://www.bridgeonline.com
http://www.MEATPOULTRY.com
Meat + Poultry - April 2005
Table of Contents for the Digital Edition of Meat + Poultry - April 2005
Contents
Meat + Poultry - April 2005 - 1
Meat + Poultry - April 2005 - 2
Meat + Poultry - April 2005 - 3
Meat + Poultry - April 2005 - Contents
Meat + Poultry - April 2005 - 5
Meat + Poultry - April 2005 - 6
Meat + Poultry - April 2005 - 7
Meat + Poultry - April 2005 - 8
Meat + Poultry - April 2005 - 9
Meat + Poultry - April 2005 - 10
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Meat + Poultry - April 2005 - 12
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