Logistics Trends and Freight Strategy

Changing Trends in Freight Logistics

Truck in PortRecent trends in FMCG supply chain are based on improving cost efficiency and shelf availability.

Highly efficient markets (such as in North America) are characterised by high levels of customer orientation and sophisticated partnering between supplier and customer.

By leveraging their volume of freight, major customers in North America and Australia have been able to reduce the cost of freight for all suppliers. They have also been able to better track and co-ordinate distribution centre resources, store deliveries and stock on shelf.

Emission reductions have also been achieved by more efficient use of vehicles and routes.

In 2005, with the involvement of the NZ Food & Grocery Council, Foodstuffs began carrying out supply chain studies and supplier surveys to come to a decision about how to respond to these trends and best practices.


Foodstuff's Freight Strategy

Truck on RoadIn 2008, Foodstuffs Auckland, Wellington and South Island launched a strategic primary freight initiative. They created a new company, Foodstuffs Inbound, to manage this programme.

With the cooperation of suppliers, and over a period of time, Foodstuffs Inbound will take responsibility for all inbound freight.

This includes the coordination, collection and transport of goods from suppliers' consolidation depots to all distribution centres, Gilmours, Toops, Trents and direct deliveries to member stores together with
Duffy & Finns and Henry's.

A significant investment in transport specialists, facilities and transport management systems has been made in order to fulfill the programme's two main operating goals:

  1. Moving to Foodstuffs Inbound will not increase a supplier's Foodstuffs related supply chain costs
  2. We will match or better all service levels currently experienced by the supplier


A Primary Freight Model

It is Foodstuffs' intention to use a primary freight model for transport costs. This means Foodstuffs will provide a competitively-priced freight service to suppliers and list pricing and trading terms will remain unchanged.