Avoiding a 12% Cost Increase: The Story of Dairy Farmers of America
QUICK SHIPPER FACTS
- $14B+ national milk marketing cooperative selling products to wholesale buyers
- Serve more than 14,500 dairy family farmers
- Operating 46 plants nationwide
- Coyote customer for 5+ years
Limit rate inflation in a tight marketplace where, in some cases, spot rates peaked at 40% YOY, while maintaining service levels and minimizing customer resources dedicated to transportation execution.
DFA saw a 12% cost avoidance in their RFP, comparing favorably to customers of similar or larger stature.
DON’T SPILL THE MILK: THE FULL STORY
Dairy Farmers of America’s (DFA) is a national, farmer-owned dairy cooperative focusing on quality, innovation and the future of family dairies. While supporting and serving more than 14,500 family farmers across 46 plants in North America, DFA works with some of the world’s largest food companies to develop ingredients that satisfy their customers’ cravings while staying committed to social responsibility and ethical farming. The integrity of DFA’s operations depends on the day-to-day supply chain which supports the vast network of sellers and buyers. Dairy products have a finite shelf-life making a reliable and efficient supply chain extremely important.
For DFA Transportation, 2018 was shaping up to be a difficult year for limiting rising freight spend. Operating in a heavily carrier-favored environment, meeting DFA’s daily shipment demands became increasingly challenging. To help assist with execution, DFA looked to Coyote’s Collaborative Transportation Management (CTM) team to help streamline their supply chain operations.
Since 2015, DFA has been a valued customer of Coyote’s CTM group. Through the relationships built with DFA, our team has been able to act as a true extension of their operations team by understanding and echoing their expectations. As part of their 2018 strategy to be more competitive with companies of similar and larger stature, DFA hoped to limit rising shipping costs despite a tightened capacity market.
To help meet their goal, Coyote provided the managed supply chain support needed for all procurement, forecasting, customer service and KPI fulfillment needs. In addition, with help implementing Shipper of Choice best practices DFA was able to focus on executing a successful RFP, with CTM’s administration, and retain a favorable freight spend performance versus their peers and the general marketplace.
Notable implementations included:
- Carrier scorecards
- Reason code reporting
- Service vs. cost analysis
Along with the quantifiable external support, Coyote helped with the introduction of qualitative metrics within DFA’s own network. By holding their network responsible for hitting specific goals, DFA could better tailor solutions to improve the performance of their internal groups. The implementation of external and internal KPIs greatly contributed to DFA’s ability to make more informed decisions to optimize their supply chain despite market conditions.
”Coyote helped us remain competitive in an unfavorable marketplace due in large part to their daily, operational support and assisting in implementing Shipper of Choice best practices into our supply chain network.” – Corey Ritenour, Director – Transportation
*After cross-analysis of DFA’s YoY freight spend (December 2017-present) against five other large food & beverage shippers in Coyote’s network, the scale to which they outperformed market competitors was significant. On average, the comparative market group saw a 16% increase in spend. In comparison, DFA saw only a 4% YoY freight spend increase, avoiding a potential 12% increase compared to other F&B shippers. In addition to helping successfully limit spend compared to the market, our CTM group was able to help further procure DFA-qualified capacity at fair rates.
Through our ongoing operational support, DFA can continue in its efforts to carry future RFP success and maintaining its reputation as an attractive shipper in the 2019 market. With the peace-of-mind that they’re being supported by a trusted group of our CTM specialists, DFA can focus on company growth and expansion into new markets. Furthermore, by adopting Shipper of Choice best practices, DFA has properly positioned its supply chain for future success in any market conditions.
*Coyote-DFA 2018 TL RFP: Performance vs. Market Report