Rising operating expenses, from higher wages to higher oil and freight prices, have forced food distributors in the U.S. to improve their operational efficiency. Solutions include using smaller trucks to ensure a full load, packing trucks more efficiently, making delivery routes shorter, and using technology to match cargo with available trucks.
This post is based on the Morningstar article, Food Distributors Make Changes as Costs Bite, by Heather Haddon, November 23, 2018. Image source: (c) volkan sengor.
1. What are the operational challenges of food distributors in the U.S.?
Guidance: The challenges include higher freight, fuel, and labor costs, driver shortages and fierce competition from e-commerce companies for truck drivers and warehouse workers.
2. What changes are food distributors making, to meet the operational challenges identified above?
Guidance: Changes include using a fully-loaded truck, packing trucks more efficiently, shortening delivery routes, matching cargo with available trucks, hiring and training drivers and warehouse workers, and passing some of the rising operational costs to customers.