It’s fall, y’all, and along with the change of season comes a shift in the food supply chain. Carriers, shippers, receivers and manufacturers have to prepare for volatile supply and demand of certain fall favorites like turkeys, cranberries, pumpkins, everything that’s pumpkin-spiced and more. But third-party logistics companies (3PLs) like KCH Transportation — partners that match the needs of manufacturers and shippers with suitable carriers — must also respond to the shift. Communication and strong relationships are the keys to 3PLs keeping their customers happy during this transition.
What is the food supply chain?
Before we dive into what 3PLs are seeing, let’s talk food supply chain basics.
Simply put, the food supply chain is the process that all food products go through, from production all the way through consumption — in other words, from farm to fork. These processes include production, processing, distribution, consumption and even disposal.
It’s very systematic and every step requires human and/or natural resources. When one part of the chain is disrupted, the whole chain is disrupted. It’s a domino effect that typically results in price changes.
Besides feeding people, a healthy supply chain also helps ensure food safety and traceability of products. But the chains have become longer and more fragmented in recent decades. Many foods are now transported from all corners of the world, often over long periods of time.
Although the food supply chain is designed and programmed to run without error, mistakes can’t always be avoided. They can happen due to systems malfunctions, human errors or cyber attacks. Just one kink in the chain can lead to shortages, poisonings or higher prices.
While supplies of many fall favorites like pumpkins, squash, apples, cherries and cabbages are meeting demand, others are running into trouble.
A raging bird flu has killed several million turkeys in the U.S. since February. This may either limit the number of families who can gobble them up for Thanksgiving, or make turkeys more expensive than last year.
There might be fewer chocolate and other candy treats available for kids this Halloween. This is because many of the raw ingredients for these products come from war-torn Ukraine.
Also, a beer shortage continues with several more weeks of college football season to go. The shortage began in mid-2020 when production of ethanol slowed down as more people stayed home. Carbon dioxide (CO2), which keeps beer from going flat, is a byproduct of ethanol. The problem got worse this summer when gas from a nearby mine contaminated a Mississippi CO2 reservoir.
So how can a 3PL navigate these twists and turns in the food supply chain? Well, according to KCH Transportation’s Domestic Supply Chain Manager, Grant Cordell, it’s pretty simple. Keep up with news and trends as much as possible. If his team has customers that may be impacted by shortages, they will call them immediately about any potential issues.
“I would discuss with them what I am hearing, confirm if they are hearing or seeing this as well, and come up with a plan to see how we are going to attack this going forward,” Cordell said. “If we need to discuss pricing, talk about volume for the future, anything to make sure we are on the same page, we at KCH are doing everything we can to help them out during that time.”
The increasing demand for fall staples requires refrigerated (climate-controlled) trailers, called reefers. Turkeys, beer, chocolate and many produce items that are popular this time of the year have to travel in a temperature-controlled environment. Otherwise, they could spoil, costing shippers and manufacturers a lot of money.
Requests for reefer capacity surprisingly went down 11% among KCH customers from August to September. Cordell said this was probably because we had just a couple of customers who didn’t need to ship as much reefer freight. If history is any guide, reefer demand will increase throughout the rest of the season.
This could result in rising freight rates that shippers pay to trucking companies because there’s a much lower number of reefer trailers that exist nationwide compared to dry vans, which are used to transport non-perishables.
“As far as supply meeting demand, it will all depend on planning ahead due to the weather, and communication,” Cordell explained. “A lot of places will be trying to ship a lot before the temps really drop in order to have material to fall back on if the weather causes issues.”
Increasing chances of snowy and icy roads can also raise rates because truckers will want more compensation for driving through harsh conditions.
Communication is key in the food supply chain
3PLs have to stay ahead of the game when it comes to the food supply chain. Disruptions can cause issues at the manufacturing and warehouse levels and beyond. Staying in constant contact with customers is the best way to deal with disruptions heading into the busy fall season.
At KCH, we pride ourselves on communication. Our reps religiously connect with their customers over the phone and treat them as actual people, not just someone behind a screen. If reps get updates at night, they immediately notify their customers via email instead of waiting until the next morning. This way, customers have time to plan ahead. They update customers throughout the day, not just when they ask for it. This commitment allows KCH customers to trust us during the transition into fall and the hard winter months.
“We constantly communicate with our customers and advise them if we see anything on the horizon that may affect pricing, on-time delivery, etc.” KCH Domestic Supply Chain Specialist Trenton Turner said. “Our relationships we develop in the spring and summer carry us over to the fall and winter months when they are needed most.”