How much time and money do you expend getting your suppliers’ products from their place to your farm?
How much do you paying in shipping charges to have products delivered to your farm?
Count the mileage put on your truck through the season, and cost that conservatively at 34 cents a kilometre for fuel and wear. Then add up the 2 – 4 hours you spend getting to the supplier, loading and getting back. And you are likely to do this multiple times to multiple suppliers. It adds up to days of your time. Those are days that could have been contributing to your bottom line.
That’s why whenever possible we push suppliers to FNA Members to provide direct to farm delivery.
This model, getting suppliers to deliver direct to the farm, is about more than the time and money saved for any one of our farms. It’s about system-wide efficiencies.
Efficiency is one of the three pillars on which we build our farm business alliance. Certainly that does mean finding ways for each us to create efficiencies directly and certainly it includes ensuring that FNA itself is operated in an efficient way. But bigger gains for farm profitability are available if we can create efficiencies in the entire system, and farm delivery does just that.
In the old traditional model products are handled multiple times between the supplier and the farm. They are warehoused at least twice before they get to the farm.
First, products are shipped to intermediate warehouses where they are unloaded, stocked, inventoried and so on. Then another truck comes at a different time to load the same products for transport to a retail location where they are again offloaded and so on.
Farm delivery eliminates at least one of these steps and depending on the supplier’s logistics capacity, all of the intermediate steps. By reducing the amount of handling and transport our farm inputs have to be put through we reduce costs for the supplier — and we expect to share in those savings. (See MPower Rewards)
So farm delivery is certainly convenient. But it’s also a key financial value contributing to the mission of maximizing our farm profitability.
In fact, in a survey of Members, when asked about the most important things that FNA suppliers offer, over 80% replied direct to farm delivery. Farm delivery ranked with product quality and competitive price because it’s a service that goes beyond convenience.
But farm delivery is even more important than that. It reduces accidents, environmental hazards and safety risks. This is because “adverse incidents” involving farm chemicals and petroleum products can occur when farmers are hauling inputs from the retailer to the farm. When accidents happen it is often the farmer who has to carry the burden.
Getting direct to farm delivery is not only safer for farmers, but is better agricultural stewardship. By reducing the number of trips input supplies have to make, we not only reduce accidents involving farmers but throughout the distribution system. Fewer accidents is better for the environment and so is the reduced energy consumption that comes with less handling and transportation.
For the efficiencies of farm delivery to be realized, we need to ensure we don’t break the system and actually makes things less efficient. That means we need to be available to receive shipments from suppliers, and be willing to work with suppliers to try to achieve the best outcome for both us and the supplier.
For example, when the logistic provider calls to arrange a delivery date, if we miss the call we need to return it in a timely way. That may seem trivially obvious, but an entire shipping route can be thrown into chaos if a large order going to a farm on that route cannot be confirmed for a delivery date.
One of the biggest issues suppliers bring to FNA management is that some Members actually do not take delivery when agreed, causing that Member’s order to be hauled back to the supplier and necessitating a second trip out to the Member when he is ready to receive it.