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ID NEWS: Industry organizations formulate Pick-Up/Backhaul 'Fairness' guidelines

WASHINGTON, DC-The Grocery Manufacturers of America (GMA) and Food Marketing Institute (FMI) have called for increased collaboration among all industry segments to optimize transportation cost savings, in a recently issued Manufacturer & Distributor Customer Pick-Up/Backhaul Fairness Statement.

The statement recommends that trading partners form a joint team to manage backhaul, bringing together their experts in logistics and transportation, sales, category management and procurement. The aim is to ensure that backhaul discussions are not limited to rate information but are elevated to transportation capabilities and to meet the needs of all parties and consumer demand. Performance measures would be established toward these ends, covering such areas as pick-up and delivery issues, loading practices, equipment compliance and consistent participation.

A section of the statement is devoted to backhaul allowances, encouraging suppliers to "unbundle" supply chain cost components such as transportation and unloading charges, to facilitate better collaboration.

"Ever since deregulation in the early 1980s allowed trucks to make multiple pickups and deliveries on the same round trip-so-called backhaul or customer pick-up-the food industry has made enormous gains in distribution efficiency," notes Tim Hammonds, FMI president and ceo. "In recent years, however, more companies have used their own carriers to reduce costs when greater collaboration could have allowed trading partners to share in the savings and increased the benefits for all."

"The Fairness Statement presents significant cost-saving opportunities when you consider that the food industry spends $26 billion a year on transportation, equal to four cents out of every consumer food dollar," says Manly Molupus, GMA president and ceo. "The Fairness Statement presents an excellent framework to help retailers, wholesalers and suppliers reduce those costs, benefiting both the industry and consumers."

"The best practices in the Statement are especially useful to wholesalers and to the independent operators they serve," adds Jack Block, president of FMI's Wholesaler Div. and former president and ceo of Food Distributors International, which merged with FMI in 2003. Prior to that, FMI was the umbrella organization for the International Foodservice Distributors Association (IFDA), Falls Church, VA, which is now a stand-alone organization.

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