By Pat Walsh, Chief Business Development Officer and Vice President, Supply Chain, Food Marketing Institute and Marjorie DePuy, Senior Director, Supply Chain and Sustainability, Food Marketing Institute20171205-FMI-Store Shoot-0530_ed

The backhaul challenge in transportation is characterized by an imbalance in transport flows between locations. A backhaul, as it relates to trucking capacity and logistics, is the return trip of a commercial truck that is transporting freight back over all or part of the same route it took to get to its current location. Empty trailers are not ideal for anyone in the supply chain and empty miles are expensive. They aren’t as safe to drive, put drivers at increased risk and they aren’t filled with product, so it drives up the cost in the supply chain in labor, empty miles and fuel emissions.

When trucks are on the road, we want them full. The concept of backhaul, or utilizing your freight asset outbound to delivery point AND back, has always been applauded in theory and stymied in practice by the logistical challenges of:

  • matching the supply with the demand in the specific shipping lane;
  • collaborating outside of existing trading partner relationships; and
  • honoring the financial and contractual relationships established in the transportation market.

With transportation capacity more limited now than ever (industry estimates between 25-50 percent of the trucks are empty), optimizing all assets in our logistics network is paramount.

The issue of backhaul has a unique impact on food retailers. When every dollar counts, food retailers can’t afford to waste time, space or fuel. Food retailers would rather focus on customer-facing services, whether it’s in the store or online order fulfillment. Having the right products on the shelf at the right time is the priority, so the focus has rightfully been on the forward movement of product. With more attention to efficiency in supply chain operations, topics like dwell time and backhaul have become more prominent because it’s critical to optimize our collective resources and reduce waste. Empty miles have been a pervasive issue for years; however, trading partners can now realize the benefits of leveraging 21st century technologies that enable companies and the industry to enhance their service levels and ultimately better serve consumers.

The Trading Partner Alliance (TPA), comprised of FMI and GMA, has identified a preliminary opportunity to decrease an estimated 3-7 percent of total miles driven by empty trucks by increasing private and dedicated fleet utilization. In a pilot project, participants are working with technology providers and trading partners to explore real-world, data-driven backhaul scenarios and solutions. Our goal is to help shippers, carriers, retailers and wholesalers to collaborate on capacity utilization. While truck capacity is tight in many markets across the U.S., numerous private and dedicated fleets have excess capacity. The goal is to identify the excess capacity and deploy it.

We want to ensure that shippers, carriers and receivers can potentially match frequently used freight lanes on a regular basis. Ultimately, the pilot project aims to reduce empty miles and improve asset utilization in terms of drivers, trucks, trailers and time. Looking across the supply chain with greater visibility, planning and response this project hopes to learn how to eliminate waste and costs to better serve the consumer.  

Collaboration works when companies recognize that their collective interests are best served by working together to solve common problems. By sharing the key learnings and insights between trading partners more broadly, we are highlighting the joint opportunity that allows us to leverage transportation resources in a more effective and efficient manner. The TPA is bringing more visibility and transparency to our capacity challenges and thereby creating opportunities so the industry benefits—shippers, carriers, drivers, retailers and, ultimately, consumers.

Learn more about the TPA backhaul pilot project and join the discussion at the TPA Transportation Summit, June 5-6 in Arlington, VA.

TPA Transportation Summit