A small logistics firm offering creative solutions to the problem of distributing small loads to supermarkets and foodservice outlets is on course to almost double its turnover next year.
Oakland International, which has just been named Business of the Year 2006 by Hereford and Worcestershire Chamber of Commerce, is on track to make £4.4M in the year to November and predicts a leap to £7.5M in the next financial year.
Although supermarkets are enthusiastic about local sourcing, they don't have the infrastructure to deal with hundreds of small deliveries, either at stores or regional distribution centres, claims Oakland md Dean Attwell.
Oakland has been bridging the gap by consolidating goods from hundreds of small food manufacturers at its Redditch warehouse, enabling Tesco and others to pick up full, mixed loads to deliver on to their own regional distribution centres (RDCs). Unlike the supermarkets' primary consolidation centres, Oakland can handle cases, mixed pallets and deliveries from manufacturers supplying less than 100 cases a week for major customers.
It also offers a consolidated invoicing service, which can save more than 20% in admin costs by raising single invoices for mixed loads rather than suppliers' individually raising invoices - an administrative nightmare for complicated mixed orders. This means that manufacturers still negotiate prices with their customers, but do not get involved in the admin, says Attwell. "Suppliers still keep their commercial relationships with customers - we just take the administrative pain away."
Oakland can also process electronic data interchange (EDI) orders and generate electronic advance shipping notes (ASNs) on behalf of small manufacturers to meet the requirements of large customers, says Attwell.
The big growth opportunity at the moment, however, is foodservice, he says. "We recently picked up a national supply chain contract with 3663 handling goods going into all of their distribution depots on a day one for day three basis." Again, this makes commercial sense for manufacturers that were previously delivering small quantities to several 3663 depots all over the country, he says.
Despite an abortive attempt to get an international operation started a couple of years ago, Oakland still harbours long-term ambitions for a network of consolidation centres like Redditch across Europe, says Attwell.
"We did open a depot in Dunkirk a couple of years ago offering a range of services from storage, sorting and grading, to barcode verification, contract packing and quality inspection. But the market wasn't really ready for it, so it was put on the back burner as the UK business took off." However, the logic behind it is still compelling, he says.
Currently, overseas suppliers often deliver to the UK individually, with goods then going through intermediate consolidators before being picked up through primary logistics networks and going on to RDCs - a costly and inefficient process, he claims.
Under the Oakland system, overseas suppliers would instead deliver to the Dunkirk depot where the retailer/foodservice operator could fill up dedicated trucks with cheap French fuel and take mixed loads direct to UK RDCs.
On the return journey, operators could also utilise trucks to make store deliveries from RDCs.