Many packaged-food companies are seeing an increase in shipping costs. The increase in costs is due to the trucker shortage and new government regulations. Today, there are more items to deliver than ever before and the lack of drivers and regulations are hurting food manufacturers.
“Trucks move about 70% of all freight in this country, and shipments and costs of produce and packaged goods have already been impacted.” (Source: Food Management)
The good news is that the food industry is starting to catch up on the technology that’s available to help improve costs. Food manufacturers are now embracing technology to ease the burden of overall costs, including the big hit they’ve taken on shipping costs. Let’s talk through some of the ways the digital era is helping food manufacturers stay on top of their spend.
3D technology is one of the more recent breakthroughs in the food industry. Food manufacturers are looking for ways to cut costs, and 3D technology is one option for manufacturers to consider. In an article from MH&L, we learn how manufacturers are finding ways to print flat sheets of gelatin and starch that can be put into water to create three-dimensional foods like pasta. Typically, even when packed perfectly, the average volume shipment of macaroni pasta is 67% air. The sheets of edible films will help to save on shipping costs because they can easily be stacked together and eliminate the wasted space that now takes place when shipping items like pasta.
Many food manufacturers are already leveraging 3D printing technology in multiple ways. Check out Is 3D Printing the Future of Food Manufacturing to learn how other food manufacturers are embracing this technology.
You’ve probably heard how Sysco, Unilever, and Anheuser-Busch are working with companies that provide self-driving trucks. The self-driving trucks are expected to reduce costs in the long run. Right now, there’s no real benefit since the trucks still require a human being to be in the truck. So, the overhead costs have not changed…yet. However, in the long run, there’s an expectation that overhead costs will decrease as humans are no longer needed to for safety precautions.
“But Convoy CEO Dan Lewis is more excited about the improvements he believes his company will be able to make by sharing data with Anheuser-Busch’s teams over a long-term period. As a marketplace for connecting trucks to customers that need their freight hauled, Convoy’s relationship with its clients is typically transactional and “arms-length,” Lewis says. ‘Together, we can think about how we can innovate to break the mold on a supply chain.’” (Source: Forbes)
Don’t underestimate the power analytics can have on your bottom line. When you have the right tools and know what to look for, you can identify gaps in your trade spend that can end up saving you lots of money.
Over the years, many foodservice manufacturers have managed their trade spend using Excel, Word, or homegrown solutions. The problem with using these traditional methods is that you don’t have the reporting capabilities to find leakage in your trade spend. Food manufacturers are now embracing trade promotion management solutions to find ways to cut costs and improve their bottom line.
Technology has been going full speed over the last few years and the food industry has been a little slow to adopt all that it has to offer. Although, we are now starting to see food manufacturers leveraging the technology that’s available to enhance their processes and have a positive impact on their bottom line. How is your business using technology to save on overall spend?