Shipping programme for confectioners targets reduction in freight costs

By Lindsey Partos

- Last updated on GMT

Related tags Nca National confectioners association

The opportunity for confectioners to reduce freight costs and improve services arises with the launch of a shipping programme from the US' National Confectioners Association that aims to create a "community of confectionery" firms to harness transportation opportunities.

Together with Flow Logistics, a supply-chain information firm, the goal of the programme is to encourage confectionery firms, with common transport needs, to link up within a shipping cooperative to manage and use transportation resources.

A 'strength in numbers' approach, the NCA suggests that by grouping together confectioners could create transportation opportunities that "they could not obtain as individual companies".

"For the last three years, a global crisis in the transportation of goods and materials had become a major concern of businesses and governments around the world. Shippers were struggling to move their products to market while holding the line on costs,"​ said the NCA.

And while the recent downturn in the global economy has relieved some of the pressures linked to transportation, notably energy costs and tight carrier capacity, the NCA suggests the state of the market today has thrown up a new "set of transportation challenges", such as reduced staffing, lower production levels, stagnant inventory and the credit crunch.

"Shippers have to think outside the box to cope with this new reality of transportation,"​ added the industry association. "One solution is for groups of shippers to work in a collaborative effort to manage freight"​.

Four areas for member collaboration

The NCA has identified four key spheres in which its shipping programme members could collaborate.

Firstly, leveraging the buying power of multiple members in the purchase of transportation services.

The NCA has "negotiated favourable rates and services"​ for member companies and stressed that the more members who join, the greater the potential buying power. "This program will result in better rates for the group than the individual members could obtain," ​they add.

Secondly, the NCA suggests the use of shared technology by members, in particular a common, web-based Tansportation Management System (TMS) application, would help firms avoid "making significant and expensive investments on in-house TMS"​.

The industry group also cites the consolidation of administrative and information technology functions as a key area for collaboration.

By providing services, such as carrier rate management, freight bill audit and payments, claims management, online tracking and tracing, "members can receive the maximum value on state of the art transportation technology with minimal investments."

And finally, the consolidation of shipments to increase common carrier use - such as ocean containers, full truckloads, or charter airplanes - that could enable firms to "fully utilise" transportation assets, rendering them more cost effective.

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