As the ongoing COVID-19 pandemic has had the effect of uprooting supply chain and logistics operations for shippers across various verticals, Minneapolis, Minn.-based global logistics services provider and freight forwarder C.H. Robinson today highlighted how it has focused on one segment that literally applies to everyone—the grocery sector.
That rings especially true now, with the company explaining that grocery retailers are up against what it called unprecedented demand, coupled with consumer changes, with one of the biggest annual food shopping seasons rapidly approaching. What’s more, that is supported by data from the USDA that is pointing to an expected $250 billion annual shift to food at home spend, as well as an FMI report that highlights a 300% increase in online grocery sales, too.
And Robinson’s footprint in the grocery sector is deep, as it serves 50 of the top 75 U.S.-based grocery retailers and 90% of the top ten, with the company explaining that its specialized food retail logistics services and technology—specifically its single, global, multimodal offering called Navisphere—are helping retailers to be prepared and able to adapt, and execute in a market in which conditions and customer needs can quickly change.
“This will be one of the most challenging and unpredictable shopping seasons our generation has seen, which means food retailers need supply chain agility to help them react in real-time to changes in demand,” said Michael Castagnetto, president, Robinson Fresh, the fresh produce division of C.H. Robinson, in a statement. “To meet shoppers’ expectations, inventory now needs to be replenishable in a matter of hours—not days or weeks—which is why we are delivering insights and solutions that provide greater flexibility and visibility, from product origination to store shelf or digital cart.”
That sentiment by Castagnetto was echoed in a customer research study by Fresh that highlighted some of the lasting impacts of the COVID-19 pandemic on retail grocery operations, including:
- 70% of shoppers plan to continue these changed habits of online shopping beyond the pandemic;
- 48% of shoppers prefer online shopping with delivery above curbside or in-store pickup, presenting a greater need to further integrate online and brick and mortar supply chains; and
- 54% of consumers are buying fresh produce online for the first time since the start of the pandemic
In an interview, Mark Petersen, C.H. Robinson VP of North American Surface Transportation, said that there has been a transition in how demand and, by extension, consumers are procuring things, adding that the way in which Robinson is helping food retailers handle demand and replenishment goes back to how Robinson enables the purchase and sale in relation to where a consumer wants to buy, which is what he sees changing.
“It is really the combination of the two things—the disruption to the supply chain and the disruption with procurement—and taking those two things in alignment with one another,” he said. “And Robinson, in our unique position, being able to address those things. So you take the consolidation networks and our ability to enable or to help the retail community position inventory in locations where it is most likely to reach consumption. On the Fresh side, that is really important because you are taking time out of the supply chain and enabling that sale or rapid replenishment that is inevitably needed right now more so than what we have seen in the past.”
When asked what Robinson’s grocery retailers biggest pain points are, in advance of the holidays, Petersen observed that one of the things the company saw in underlying data is that historically shippers go through patterns of procurement, in the form of bids and seasonality, which is typical.
“Rates will be either up or down, relative to somewhat of a generally consistent baseline,” he said. “Produce harvested at this time period, and people consuming things for grilling this time period, those things have been fairly consistent over time. And what we saw, and because of how supply chains are somewhat built, in terms of capacity, that builds some consistent head haul and backhaul types of programs related to how things are procured. And we saw this imbalance happen throughout 2020 because of the numerous things we encountered. What we saw were disruptions in the traditional in and out of traffic in certain states. If you had a ratio before of four trucks into a state for every six trucks out, or eight, or those types of statistics, we saw a disruption in that and so, in that case, whether it was short-term, long-term or whatever you saw a change in how and where available capacity was. That situation leads to disruption in tender acceptance and route guides and everything else, because it is just not the same. And that is where I think we have seen the most pain points and the most requests for help, which is around managing that type of activity.”
And he added Robinson is well equipped to handle that situation, because it is capable of changing the scale and the size of what it does in all of the types of freight and modes it moves in.
“We have as good of a chance of anybody to redeploy and reshuffle the deck, if you will, on how to make capacity accessible,” he said. “Even though that capacity is accessible, it comes at different types of rate baselines because of the disruption and waste for dead head and things like that related to repositions. Underlying costs baselines shift with that, but those ratios and how much it takes to reposition and get into these different locations and places of need caused a fair amount of issues that I think we have been well positioned to help over the last several months.”
As for possible permanent changes, or lessons learned, for grocery retailers, stemming from the pandemic, Petersen said it is somewhat hard to say there is anything that may be viewed as permanent at this time, but that could change heading into 2021.
But he did observed that the trends seen throughout 2020, relative to consumer purchasing at home versus not at home will likely continue to be different than it has been in the past, but to what degree is unclear.
“Those things change the way we procure,” he said. “When we think about things consumed at retail versus at home versus restaurant, those are all different and the supply chains that we have to enable, in order to deliver what the consumer actually wants to purchase and where they want to purchase it, are transient and those things are changing. From a logistics standpoint, what we are thinking about is how to scale and how to do it quickly enough, based on what our customers are asking of us and are likely going through for the first time as well and for us to provide that high level of confidence that we are here to support them in whatever that might be.
We don’t have a crystal ball to know what those things are but because of the technology platform and scalability we have, the global suite of services we have is real and we saw it deployed through these last six months. And it is very powerful as to what we can actually deliver pretty quickly and reactive to things that none of us have ever seen before.”
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman