Malcolm Johnstone, md of ACS&T, said a “perfect storm” of factors had combined to produce a turbulent 2015. Cash conscious retailers had reduced stock levels, resulting in demand for smaller, more frequent deliveries, he said.
In addition, “the reduction of commitments in forecasts and the fulfilment of orders, and the compression of timelines of orders to furnish sustained planned and assured solutions, all compounded to create a difficult service environment”, he said.
Problems in 2016
Johnstone warned the problems were likely to continue into 2016.
Within the temperature controlled sector, there had been a shortage of equipment and space at times of peak seasonal demand, he added. “Christmas seasonal bookings have moved to being confirmed earlier in the spring, and this year, we have turned away producers that had planned too late,” said Johnstone.
“The growth of small drops has been managed through our ‘less-than-truckload’ fleet based at Wolverhampton, but costs of such a change in distribution offsets inventory savings.”
Challenging distribution conditions
He warned that distribution conditions were also challenging, as longer days – as a result of multiple drops – increased the chance of traffic congestion affecting deliveries. This problem was compounded by an industry shortage of drivers, said Johnstone.
“ACS&T has mitigated this through the dispersal of fleet through wider satellite geography and we have moved stem mileage [the mileage to and from a delivery zone] to night operation. The key is to ensure maximum service availability is possible in the delivery window in the geographic area,” he said.
“Multiple SKUs [stock keeping units] with case picking to ensure consolidated smaller deliveries of wide ranges requires a complex and demanding operation,” said Johnstone.
“We can provide variable storage mediums with the flexibility of smaller chambers and varied racking.”