DC Velocity - August 2009

BY MARK B. SOLOMON, SENIOR EDITOR

MOTOR FREIGHT

enroute
movin’ on …
and on …
and on

“Continuous moves” distribution

strategies aren’t for everyone.

But under the right conditions,

they can produce double-digit

transportation savings.

ON PAPER, A “CONTINUOUS MOVES” shipment strategy is a clear winner: A shipper works with a few core carriers to group a series of one-way hauls— between suppliers, manufacturing plants, distribution centers, and sometimes customers—into a round trip. The truckers benefit from fewer empty miles, less idle time, better asset utilization, and near-regular routes. The shipper benefits from lower rates and guaranteed capacity. The resulting efficiencies translate into better fuel economy and a smaller carbon footprint.

But shipping, like sports, is not played on paper. In practice, continuous moves are complicated to engineer, difficult to execute, and effective only under certain conditions. That may explain why the model’s two-decade track record has been spotty at best.

Yet with fuel prices again on the rise and mounting pressure on companies to go green, continuous moves may be worth a second look, at least by shipping operations that have the freight density and geographic profile to make it work.

Hershey keeps things rolling

One company that has embraced the concept is The Hershey Co. In 2007, the iconic confectioner began a comprehensive review of its transportation and distri-

bution processes. A key objective of the exercise— dubbed “Project Overdrive”—was to create an integrated transportation program by identifying continuous moves opportunities for Hershey, its suppliers, and its carriers.

In early 2008, Hershey and four of its core carriers launched a pilot program of continuous moves for outbound shipments from the company’s factories to its four U.S. distribution centers and from the DCs to Hershey’s retail customers. Hershey went nationwide with the outbound program later in the year. The company is currently implementing continuous moves for inbound freight to its plants from its packaging and commodities suppliers.

The program required Hershey to assume greater control over its transportation. In the past, inbound and outbound moves were managed separately. Suppliers were often responsible for getting their freight to Hershey’s manufacturing plants, while Hershey managed movements between its plants and DCs. Under that system, for example, a packaging supplier located near Hershey’s St. Louis DC would arrange for trucks to haul packaging materials to Hershey’s factory in Robinson, Ill. Hershey, meanwhile, would manage outbound shipments of finished products from the Robinson plant to its St. Louis DC.