By Karen E. Thuermer, AJOTFood products and perishables in particular, can be sensitive items to move around. With today’s high cost of fuel, getting these products to market is increasing challenging, especially from a cost point of view. Simply put, there’s only so much money a shipper can pay to transport his or her food items before the cost goes out of site. At some point these expenses must be passed onto consumers, and – these days – everyone is bulking at higher prices. Consequently, shippers worldwide are seeking ways to cut cost. This was the case for a leading manufacturer in the food and beverage industry that imports 6,000 containers of raw materials and exports 13,000 containers of finished product to and from Thailand each year. Its overall logistics costs were on the up, driven by high import transportation costs due to the location of its import warehouse and use of 10-wheel trucks. In addition, sub-optimal storage patterns, low quality warehouse operations and lack of supply chain visibility contributed to the high warehousing costs. While the shipper sought to reduce overall logistics costs, lower costs had to be realized in conjunction with improved service delivery and increased supply chain visibility. Consequently, despite its leading market position, the manufacturer was under pressure to curb its logistics costs. It turned to several service providers to come up with supply chain improvement plans. Among those that responded was Maersk Logistics. Through its SupplyChain HealthCheck™ , a fact-based and practical approach to supply chain analysis and development, Maersk Logistics was able to identify a host of improvement opportunities that, if implemented, could save the company $2.4 million per year. Among its suggestions were: redesigning the import and export warehouse network; implementing cross docking service; replacing less-than-container-load (LCL) trucking with back-haulage of reefer containers; and introducing a warehouse management system to improve visibility. As a result, the manufacturer switched its import warehouse facility to one operated by Maersk Logistics at an inland container depot. This reduced inbound transportation costs and improved warehouse management capabilities. It also eliminated external storage costs by cross docking import cargo within seven days, and began using empty reefer container to transfer the import cargo from Maersk warehouse to the client’s factory, thereby eliminating LCL trucking and reducing transportation costs. A warehouse management system was implemented to improve visibility. KRAFT DIRECT SHIPMENTS Unlike the above-mentioned manufacturer, Kraft Foods runs its own distribution warehouse in Groveport, Ohio. The complex, which has been in operation for 10 years, mixes products for shipments for delivery to retail warehouses or directly to the supermarkets themselves. Prior to managing the warehouse itself, shipments were handed by a third party logistics provider. “By bringing the business in-house we were able to grow our volume,” says Eric Fouts, Kraft complex manager responsible for operations. “But volumes here are low compared to Kraft’s total volumes. We have 11 routes through Central Ohio.” Not every Kraft mixing center or warehouse is run by the company. “We pride ourselves in that 97.2% of shipping orders are on time,” Fouts adds. “Nearly 95% of the time we are able to turn our shipments around in less than two hours.” A wide variety of groceries are handled at the complex such as Cool Whip (in aerosol cans), crème cheese, hot dogs, deli items, and frozen products that are stored in its refrigerated warehouse. Inbound, the products come from 12 locations. The Groveport campus also handles frozen pizza such as Jack’s pizza, Tombstone, DiGiorno, and California Pizza Kitchen brands. The complex is Kraft’s only facility from which it ships pizza worldwide. A key element to the complex is its refrigeration/frozen building, which has an automatic system for pall