A large portion of CPG shippers consider shipping their biggest business obstacles. In fact, there are two major obstacles for consumer packaged goods (CPG) shippers; capacity and retailer’s demands. In this article, Millennium Logistics Management will explore these obstacles and provides solutions to overcome these problems for CPG shippers.
First, let’s discuss the two main problems CPG shippers face:
Capacity: CPG shippers have a difficult time locking in capacity for regular shipments due to truck driver shortages and rising freight costs. CPG shippers generally have unpredictable quantity estimates due to small and frequent shipments that answer the demands of retailers, and inadequate truck and driver utilization because of receiving dock backups at the facilities of the retailers.
Demands of Retailers: Shipping becomes difficult for CPG manufacturers because retailers have strict demands, which are driven buy consumer demands. Retailers allow for limited delivery windows and implement harsh penalties for non-compliance in order to keep their shelves stocked and customers happy. Retailers even reduce their in-stock inventory, which creates back ups at the receiving dock and results in unrealistic lead times. This only perpetuates non-compliance from CPG shippers even more.
These two issues are not only substantial, but they are also interrelated. Luckily, they can both be solved with similar solutions! The following are transportation solutions for CPG shippers (these are proven processes):
Solution #1: Cross-Docking
Cross-docking a portion of the freight will ensure that it gets moved quickly from the factory to the retailer. This helps decrease the probability for non-compliance fees and penalties, and diminish the costs of handling and storing goods.
Solution #2: Outsourcing Transportation
A popular and effective solution for CPG shippers is outsourcing transportation management to a third party logistics company, like Millennium Logistics Management. Third party logistics companies have an industry foothold that provides dependable capacity at the lowest price possible. Additionally, third party logistics companies implement continuous optimization initiatives to logistics processes, which allows shippers to take the time they used to spend on freight management and focuses on core capabilities.
Solution #3: Company Collaboration
To reduce shipping costs and inventory carrying costs, CPG shippers can collaborate with other companies to share warehouse or truck space. Naturally, CPG shippers are able to find capacity much easier when they utilize capacity more effectively.
Solution #4: Ship Factory Direct
Ordering products directly from the factory can be a great incentive CPG shippers can offer to retail customers. The retailer is attracted to this because they will benefit from saving through lower priced products and faster delivery times. CPG manufacturers benefits as well because they can bypass their own distribution centers, thus saving money on costs for warehouse storage, labor costs and transportation!
Following this guide is a sure way to overcome shipping problems for CPG shippers. Remember, these solutions are proven processes. Millennium Logistics Management is happy to answer any questions you may have regarding their services. Inquire about their consultation services or request a free quote today!
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