Managing perishables in a cold supply chain makes operations much more complicated than in a dry storage supply chain. There is a lot of movement that needs to be coordinated from your facility to refrigerated trucks to your outside cold storage facility, and back to trucks—sometimes multiple times! — before reaching your end user. Each step along the way creates a threat of increased logistics costs and allows more chances for something to go wrong. And these mistakes are often very costly.
At Interstate Cold Storage, we’re committed to helping our customers reduce costs, manage inventory effectively, and optimize their supply chain. Here, we’ll give you an overview of common cold supply chain inefficiencies where you may be able to streamline your supply chain operations to improve your bottom line.
The pandemic had some surprising effects on our economy. One was how it sometimes increased efficiency in the cold supply chain.
During Covid, customers weren’t able to get many products and materials. Availability controlled the supply chain, and customers were generally satisfied with taking whatever they could get. Because of this, suppliers were confident in demand and produced as much as possible. They were also able to ship more efficiently, moving products in full truckloads at a time.
Full Truckload (FTL) shipping tends to be more cost-effective than Less Than Truckload (LTL) shipping because the entire truck is dedicated to one destination, reducing transit times, handling, and the risk of damage. When the volume justifies it, FTL is typically the preferred choice for shipping, boosting supply chain optimization.
Efficient bulk cold storage facilities, such as Interstate Cold Storage, rack systems and buildings designed to maximize the speed of FTL shipping, and can rack the same number of pallets in 20 minutes that would take an hour in another facility.
Since the end of the pandemic, however, the rise in inflation has been driving down unit sales, returning to the buyer-driven model that was common before Covid. With reduced demand, many manufacturers have drifted back to “just-in-time” models with smaller orders, LTL shipping, more case pick, and lower inventory.
Shipping partial loads has been up in 2024. Although many believe LTL shipping cost is spiking now, its volumes dropped by about 4% during the pandemic. LTL shipments have seen an increase of about 8% since 2023, which is a normal rise after allowing for market adjustments following pandemic-related disruptions.
Shipping partial loads is an important option for businesses that don't have the volume to fill an entire truck. While it is more costly than FTL, it’s often the best solution for smaller or more frequent shipments.
In addition to the obvious costs of LTL shipping, there are other factors that add to the expense, including:
A better solution would be to partner with a cold storage facility, such as Interstate Cold Storage, that uses a real-time online EDI inventory management system with inbound/outbound freight tracking.
Cross docking is a strategy of directly transferring products from an inbound shipment, such as a truck, to outbound transportation with minimal or no storage in between.
Although it was a more effective strategy pre-Covid, cross docking is labor-intensive and usually too expensive for the current cold supply chain due to the worker shortage. It is also risky, with no margin for error. 15-20% of shipments are delayed enroute and miss their window for catching the outbound transportation. Few facilities offer cross docking since Covid, preferring to work with more traditional turn rate customers which are less hectic and problem prone on the shipping and receiving docks.
Interstate Cold Storage offers flexible cold storage options that keep your products safe while reducing the risk of delays common in cross docking.
FTL shipping and cross docking have been good strategies in the past, but the current market requires a more finessed approach. Identifying and eliminating areas in your supply chain with unnecessary costs — even if they are small in themselves — add up to big savings overall.
The first step in supply chain optimization is to take a good, hard look at your current activities and find areas that could use improvement. If you partner with a customer-focused cold storage facility, such as Interstate Cold Storage, it should be able to provide you with much of the data you need to get started.
Look at your:
You should know how your inventory assets are allocated in addition to your inventory levels. Further, you should ensure your products travel the shortest distance possible, and your supply chain team should periodically evaluate your routing.
Your cold storage facility should also be able to provide essential data to assist your supply chain optimization efforts. This warehouse assessment can help you to lower your cost per order, reduce freight costs, and increase your storage capacity in the facility.
In addition to supply chain cost reduction, you can also implement other strategies to reduce spending:
Savvy business leaders know supply chain optimizationis key to reducing costs and boosting profits, but it can have even farther-reaching effects. Simplifying your operations with Interstate Cold Storage helps protect your perishable products and make your supply chain more resilient. And by reducing inefficiencies, manufacturers can better handle disruptions, delays, or unforeseen challenges, lowering costs and fines from unmet deadlines.
Established in 1973, ICS is a leader in cold storage facilities, shipping and distribution, with warehouses located across the Midwest. Headquartered in Fort Wayne, Indiana, our family-owned company has five locations and close to 22 million cubic feet of refrigerated space. The International Association of Refrigerated Warehouses honored ICS as one of the top 20 North American refrigerated warehousing companies. Our facility network currently supports temperature ranges from -15°F to 35°F with multi-room and multi-temp offerings. Interstate Cold Storage is a subsidiary of the Tippmann Affiliated Group and has two facilities in Fort Wayne, IN; one in Napoleon, OH; and two in Columbus, OH.
Want to learn how Interstate Cold Storage can help supply chain cost reduction for your business? Contact Us.
