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White Paper Series

2007 Food Logistics Industry Report
This industry-wide report identifies common practices, challenges, and emerging trends within the U.S. food logistics industry.

© 2007 Saddle Creek Corporation All Rights Reserved

2007 Food Logistics Industry Report
During the first quarter of 2006, executives involved in warehousing and transportation management of food and beverage products were asked to participate in a survey to identify common practices, challenges, and emerging trends. There were 104 food logistics executives who participated, making the findings of this survey statistically valid.

Demographics of Participants
The majority of ...view middle of the document...

A third of companies have less than 50 SKUs. Nearly another third (28.1 percent) have 50 to 999. Of those with frozen DC/warehouse space, 43.3 percent have less than 50 SKUs. Another 17.5 percent have between 1,000 and 4,999 SKUs.
Type of Company
Food/Grocery/ Beverages Supermarket Chain Foodservice Distributor

34% 6% 8%



Just over a third of respondents (36.5 percent) came from private fleet operations. Roughly another third (34.6 percent) were from dedicated contract carriage operations. Of those who responded “other,” nearly a third specified 3PL. Others said common carrier or a combination of private and contract carriers.



© 2007 Saddle Creek Corporation All Rights Reserved

2007 Food Logistics Industry Report
Challenges and Emerging Trends in Food Logistics
What are the top challenges in the food logistics industry? By far, capacity problems are the most critical. Driver shortage and increasing customer demands in the industry also topped the list. While these challenges may not be surprising, they indicate that there is a significant opportunity for companies who are able to offer solutions.
Biggest Logistics Challenges
43.2% 24% 20.1% 14.4%
Capacity Problems Driver Shortage

Customer Demands


When evaluating the responses of this survey, it’s clear that the 14.4% Outbound Logistics food industry is disjointed, reliant upon outsourcing practices, 9.6% Food Safety has seasonal patterns of production, and deals with highly 7.6% Customer Service perishable products. The industry is dependent upon a highly 6.7% Inbound Logistics fragmented truck transportation system for 80 percent of its shipments (more than 600,000 interstate motor carriers in 2002 per Federal MCSA). Meanwhile, out-of-stock products cost the food industry between $7 and $12 billion per year, according to recent Accenture research, with an estimated 60 percent of food and beverage items on the shelf being “slow moving” and unprofitable. Inefficient transportation and excessive inventory represent an estimated $30 billion savings opportunity to this industry. These issues become exacerbated due to mergers and acquisitions. Disparate technology systems overlap and become cost-prohibitive. Physical distribution networks become costly to manage, integrate and re-architect. Currently, food companies are pressured to address these challenges while they develop a more optimized, more streamlined supply chain in order to hold minimal inventory so they’re not burdened with that large investment. What are emerging trends that will help beat these challenges? Changing Business Model. This industry is shaped by an Internet-driven, customer-centric marketplace. Efficient, timely order fulfillment is the new fundamental business requirement for food companies. Smaller, more frequent orders are required and fulfillment focused on value-added handling rather than warehouse storage. Perfect orders (on-time,...

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