Culina eyes up retail primary distribution contracts

By Elaine Watson

- Last updated on GMT

Related tags Supply chain Logistics Contract

Thomas van Mourik
Thomas van Mourik
Culina Logistics is looking to work more closely with retailers on primary distribution contracts (collecting goods from manufacturers or shared user depots on behalf of retailers for delivery into their regional distribution centres).

Speaking to following the publication of Culina’s food and drink supply chain health index survey*, chief executive Thomas van Mourik said: “Our contractual relationships have historically been with manufacturers, but slowly and surely we’re getting more into primary distribution for Tesco and co.

“It’s still a very small part of our business, however, whereas some of our competitors are relying on retailers for something like 50% of their business.

"This is definitely an area where I would hope to see some progress for us over the next 12 months."

Re-working and co-packing

Culina, which has recently opened a new facility in Dublin to help UK manufacturers access the Irish market more efficiently, also predicts strong growth from contract packing as a growing percentage of products are sold on promotion or customised in some way for particular retailers.

Services available via Culina IPS Contract Packing - a joint venture between Culina and IPS West Yorkshire - now included everything from re-labelling to re-boxing, shrink wrapping, promotional sleeving and multipack assembly, he said.

“For one of our customers, 40% of its volumes are reconfigured in some way for promotional purposes.”

Shorter lead times can saddle manufacturers with higher costs

Meanwhile the gradual reduction in lead times across the supply chain was also creating more demand for shared user networks whereby firms such as Culina consolidated goods from several manufacturers and then delivered full truckloads of goods to retailers, he said.

“Retailers are starting to introduce to their ambient supply chains the same short 12-24 hour order lead times and stock management systems that they have rolled out on fresh and chilled.

“This in turn means smaller loads and more frequent deliveries, which if not managed properly can saddle food manufacturers with significant extra costs. Retailers, meanwhile, still want full trucks arriving at their depots, which means they have to be consolidated first. We are perfectly placed to capitalise on this trend.”

Too many empty trucks on the road

While collaboration had increased in the food supply chain in recent years as firms sought to cut costs and carbon emissions, there were still far too many empty trucks on the road, he said. "We have to better utilise trucks that are returning from RDCs.”

Culina, which has just won a new contract to collect cheese from First Milk near Wrexham for onward delivery to customers via Culina’s Stafford depot, works with a clutch of blue chip firms including Kraft, Müller, Emmi, Nestlé and Lactalis.

* Culina’s survey, which was based on online feedback from logistics managers at 50 UK food and drink manufacturers in June 2010, also highlighted several other areas for improvement in the trade, notably warehousing and waste management.

Related topics Supply Chain

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