America’s massive food waste problem touches nearly every facet of society, from the farms that produce our food to what we put on our plates. In the U.S., an estimated 35% of all food goes unsold or uneaten — and most of that ends up in the trash.

All that wasted food puts a huge financial burden on food businesses, compressing margins and driving up consumer costs. A report from ReFED, a national nonprofit dedicated to ending food loss and waste, estimated that the food industry lost $250 billion in 2019, with restaurants and other food service businesses shouldering the greatest burden.

Several problems, both old and new, have combined to put unprecedented pressure on food distributors.

• Demand spiked during the pandemic as consumers ate at home more, spawning a surge in both in-person grocery shopping and delivery. The e-commerce channel increased fivefold in a matter of weeks, growing to 10% to 15% of total grocery spend and putting added strain on the system because of the multiple challenges associated with last-minute delivery.
• Federal laws like the Food Safety Modernization Act have mandated more preventive controls on food processing systems, including inspections, regulatory compliance and product traceability.
• The market has always been vulnerable to sudden swings in pricing and capacity, with anything from the weather to unforeseen events like the pandemic causing upheaval.
• Finally, stagnant shipping and transportation management methods hold businesses back, with departments working in silos with limited visibility into what’s happening in other parts of the company. Many shippers still use pen-and-paper methods or difficult-to-manage spreadsheets to track their shipments, often creating bottlenecks that result in delays.

Finding Efficiencies for On-Time Delivery

Improvements in analytics and automation can address all of these problems, helping food distributors reduce food spoilage and waste by optimizing their supply chains at each step, from capacity to visibility to automation and analytics.

By gaining instant access to capacity, distributors can feel confident about the ability to move their goods and react to fluctuations in the market.

Real-time visibility into the status of shipments leads to faster and better business decisions. The ability to reroute delayed shipments is critical to keeping goods flowing to their final destination, while proactively contacting customers with updates helps set expectations and improves the customer experience.

In a very literal sense, time is money for those in the food industry. Late or missing deliveries have a direct effect on the bottom line. The number of just-in-time deliveries will increase through real-time visibility into supply and demand data, which helps minimize the number of goods held in stock.

System automation is a technology trend that is spreading rapidly throughout the food and beverage industry, and with good reason. Eliminating repetitive and costly manual tasks saves valuable time, protects perishable items and helps suppliers to address issues instantaneously.

Improving efficiencies throughout the business leads to consistent savings on shipping. A few notable examples of elements that can be automated are order management, load planning, carrier evaluation and assignment, settlement and messaging. Consider how much time it takes to upload, review, reconcile and get reimbursed for lumper fees. By automating this process with a transportation management system (TMS), the driver can snap a photo of the receipt, upload it into the platform and get reimbursed quickly and easily from the shipper. This saves time for both carrier and shipper, and provides documentation for compliance, auditing and dispute resolution.

Finally, analytics allow businesses to better identify recurring issues so they can improve on each shipment. Understanding why things happen — that is, going beyond knowing what has happened — changes a shipper’s approach from reactive to proactive, and opens up opportunities to become more efficient.

A Real-World Example

These applications of data analytics and automation aren’t just pie-in-the-sky predictions. Companies are seeing real savings by putting these types of systems in place. Marcus Technologies, a software provider for protein trading and logistics, automated a previously manual process by consolidating its freight onto a single platform for quoting, booking and tracking. Real-time visibility allows the company to compare transactional data to actual market data to see those differentials and how much money it was saving. After just six months, Marcus Technologies had reduced costs by 10 times its original ROI estimate, thanks to lower rates and decreased spoilage and loss of goods.

Wasted food means wasted money for food distributors already under pressure, and automation and analytics can improve the supply chain for food distributors by saving time and reducing food spoilage.

Smart systems allow distributors to realize consistent savings, adjust to swings in demand, ensure quality products and unlock efficiencies.

Greg Price is co-founder and chief executive officer of Shipwell.