3PLs should be wary of retailer-collect model for primary transport

William Walker, founder of Walker Logistics, argues that supermarkets collecting their own goods is not necessarily the most efficient use of resources.

By using their own returning vehicles to collect products bound for their warehouses from their suppliers, are retailers really improving supply chain efficiency?

There is a trend for retailers to collect orders bound for their warehouses from suppliers, or their 3PL partners, using their own vehicles.

As a result, rather than picking and packing pallet loads of a client’s goods before dispatching them to a retailer’s DC, many logistics services businesses are picking and packing pallets and storing orders until they are picked up by a retailer.

The theory is that by using returning, empty delivery vehicles to collect products bound for their warehouses from their suppliers, retailers can cut the number of miles travelled and emissions produced while earning revenue.

Advocates of retailer-collect transport planning solutions claim other benefits. For example, by even partially filling returning vehicles, the retailer can offer competitive prices. And some retailers will offer to get the supplier’s products on the shelf more quickly if its own vehicles are used.

Disruption

But some 3PLs see this as a potential disruption to a smooth-running operation and contend that the need to factor in more in-bound collection slots adds a different level of administration.

From our experience, processing retailer-collect orders requires additional planning. And those retailers that impose heavy penalties on companies that miss their delivery slot do not always expect this to apply to their own vehicles when they fail to ‘book in’ at the allotted time. Some are even reluctant to confirm a time.

This process may also put the 3PL company under pressure to process orders more quickly than is practical. For example, the 3PL may receive an order that requires an amount of kitting or rework on Monday and then be told the retailer’s vehicle will be collecting the order the next day.

Conversely, a 3PL may pick and pack a large, 30-pallet order for collection on a scheduled date, only to be told that the retailer will not be collecting it for another 10 days.

At Walkers we have expanded a dedicated area in the storage facility to accommodate stock awaiting collection from our clients’ retail stockists to maintain a smooth process.

The retailer-collect model is set to become more commonplace, so 3PLs need to work with clients and their retailer partners to ensure the process functions as efficiently as possible.