Smart Warehousing Dec 22, 2021 1:12:59 PM 8 min read

5 Major Challenges Facing Food Distribution Companies

Food logistics may seem easy, but the process involves a lot of complications. Studies from the Logistics Bureau have shown that 33% of food is lost or wasted during the shipping process, and perishable goods spend half of their shelf life being transported.

This is just the tip of the iceberg of the challenges faced by food shipping companies. Every year, billions of dollars are lost as food goes bad during the transportation process, creating huge losses to businesses.

With the shape of the shipping industry constantly changing, it is only advisable to partner with a competent and up-to-date 3PL provider with enough knowledge in the supply chain. This allows you to use the company's resources and avoid the challenges most food shipping companies face, which in turn puts you ahead of your competitors.

Now let’s dig into the five biggest challenges facing food distribution companies.

1. Temperature & Humidity

The food fulfillment process is an essential part of your business since it can make or break your brand. Getting perishable foods from the manufacturer to the consumer is not easy as it sounds. A slight mistake, such as the wrong temperature and humidity, can make all the food go bad or dramatically reduce their shelf life.

Therefore, to keep foods fresh during shipping, temperature and humidity should be controlled and maintained at certain levels. The fresh produce needs to remain cool and refrigerated since bacteria tend to grow in areas with high temperatures.

Fresh fruits such as oranges and grapes should be kept at temperatures ranging from 0-2˚C and humidity levels of 95-100%. On the other hand, foods such as onions and garlic need to be stored at similar temperatures but lower humidity levels of 65-75% because high humidity levels destroy them.

For perishable goods damageable by cold temperatures like mangos and bananas, their ideal storage temperatures would be between 13˚C and 15˚C and 85-90% humidity levels.

From the above temperature and humidity conditions, you can tell that keeping food fresh and safe during shipping is very specific and different depending on the type of food. This can make it difficult for food shipping companies to optimize their shipping environments fully.

2. Technology Implementation

There is tremendous growth in technology use in the food distribution industry. For food shipping companies to stay competitive and reduce waste, they need to constantly look for more effective ways to deliver their produce to retailers while lowering costs.

One significant way of achieving this is through modern technology. For example, modern tracking equipment and technology allow the food shipping companies to quickly respond to the demand while enabling partners to make swift changes to their scheduled delivery.

Even though the food distribution industry has witnessed the benefits of these technologies, most shipping companies are still struggling with implementing them. This is mainly due to the finances required and difficulty maintaining the technologies.

Luckily, food shipping companies can outsource all or a section of their business process from a third-party logistics company with the required expertise, capacity, people, and IT systems. This will help them reduce expenses, appropriately handle the supply chain, and get better regulatory compliance.

Looking for a 3PL company but don't know where to start? Read our article on 8 things to look for in a 3PL.

3. Damage During Transportation

Impact damage is another challenge food shipping companies face as they transport perishable foods and beverages. Nobody wants to buy food that looks damaged or in bad condition. Therefore, if the food gets damaged during the shipping process, it will likely not get to the consumer.
About 14% of food goes to waste from the time it's released from the farm to the time it reaches the consumers. Food wastage during transportation occurs due to shocks and vibrations produced during movement. The damage could worsen if inefficient packaging systems or wrapping are used or if the goods were not correctly loaded.
Such food damage and wastage costs you money and lowers the customer's satisfaction. Sometimes when a transporter receives more foods to ship than they can handle, they may load extra pallets in one vehicle to cut down on costs, which usually results in damaged goods.

4. Changes in Demand

A great challenge in food logistics is ensuring there is enough stock to meet the demand but not too much to remain. Stock that stays for too long without reaching consumers will eventually get discarded as waste.

Unfortunately, with the seasonal changes in food demand, it becomes difficult to know when consumers will need the goods in large quantities and vice versa. Generally, the demand for certain foods will be higher when they are in season, and their demand will fall as the season ends.

Such fluctuations in certain foods demand can significantly impact food shipping companies since they will have to utilize their warehouses and spaces for other activities during low seasons. They will also need to ensure that they have enough people to meet the demands during high seasons, both in the warehouse and distribution.

5. Vehicle Maintenance Costs

According to the Annual Third-Party Logistics Study, the greatest challenge shipping companies face is the high transportation costs. Shipping companies without a 3rd party logistics provider will have to deliver their foods and drinks from their warehouse to retailers, supermarkets, and vendors on their own.

One great disadvantage that this solo distribution comes with is the high maintenance costs of the distribution vehicles, from fuel, insurance, driver to maintenance costs. To cut down on these costs, a shipping company can partner with a 3PL provider that uses intelligent automated route planning tools, which will lead to fewer trips and fewer fuel costs.

Smart Warehousing: Your Top 3PL Provider

With the rapidly changing world, staying one step ahead of your competitors will require you to keep up. Whether you are a well-established business or a start-up with limited resources to handle all your operations, hiring a third-party logistics company will come in handy.

At Smart Warehousing, we stand out in the food fulfillment industry because of our software and our fulfillment process. We offer 1–2 day temperature-controlled and cold chain shipping to 98% of the country. With over 20 years of expertise, we can handle temperature-sensitive products that need to be handled with care. Contact us today to learn more about how we support your business with our fulfillment process.