Minimizing Cart Loss
You're bound to lose a cart here and a rack there, but suppliers are devising strategies to reduce equipment loss and boost your bottom line.
February 19, 2010
A driver recovering Container Centralen racks finds a person at the rear of a retail store loading Container Centralen equipment into a truck. That's odd, the driver thinks, so he questions the person about the loading job.
The driver quickly realizes this person is stealing carts and planning to deliver them to a scrap metal yard. Container Centralen files a police report with the information the driver provides, and the driver now qualifies for a $500 reward as an incentive of Container Centralen's new Equipment Protection Program.
Container Centralen wins because it maintains its equipment; the driver wins because he's eligible for a fistful of cash; growers win because they'll have a load of carts to use for their next shipments; and retailers win because they've helped their vendors keep costs down and prevented an act of theft on their property.
"Cart and rack theft varies by region," says Sonny Costin, president of Container Centralen, a company that specializes in operating a pool of returnable transport items. "The Northeast appears to have the largest problem with scrap metal yards and cart theft. Container Centralen has only a modest presence in the Northeast, so we have not had much exposure to these problems. However, as we expand into that region, we are implementing the Equipment Protection Program and other initiatives to address these challenges.
Retailer cooperation makes a huge difference in cart loss rates, Costin says, and benefits growers, retailers and Container Centralen because lower loss rates equal lower costs - a win-win-win for all.
Minimizing Cart Loss
If you regularly ship carts and racks to your grower and retail customers, you've likely experienced some equipment theft. And if you're among the few who haven't experienced theft, you've surely experienced equipment loss.
Tracking carts and racks is like herding cattle: You may be able to keep the bulk of your carts and racks together, but a few are bound to break from the pack, get stolen or lost and wind up costing you money.
Strategies for minimizing equipment loss, then, are:
- Hiring an equipment manager whose job is to track the whereabouts of all carts and racks.
- Aligning with suppliers that help minimize equipment loss through technology or take responsibility for lost or stolen carts themselves; and
- Buying less expensive equipment and assuming the loss.
"A lot of growers are buying cheap, and they're doing it because they lose carts," says Paul Burn, technical sales representative for Wellmaster Carts. "When they lose carts, growers will say it's better to lose a $150 cart than a $350 cart."
Some growers, Burn says, don't track their equipment as well as others. In some cases, growers will argue their carts are stolen when, in reality, they're simply misplaced.
"They may have been going to a big box retailer," Burn says, "and they wind up going someplace else inside that retail operation. Or, there are instances when that retailer may decide it needs petunias at another operation - so equipment is misplaced."
There are other frequent instances, Burn says, when drivers are asked to pick up carts yet pick up another grower's carts instead. So by the end of spring, growers may have 20 or more carts in house that belong to totally different growers.
A Possible Solution
One way to minimize equipment loss is through RFID (radio frequency identification) chips. Container Centralen has been using a barcode scan system for years but is now committed to RFID. Bar code scanning, Costin argues, is limited by the need for human intervention - someone has to scan - while RFID is a more sophisticated means to reduce costs.
"We are installing RFID readers at all our customer and depot locations so we have real-time tracking of every cart across the United States as Container Centralen carts move between our customers and in and out of our depots," Costin says. "As a cart arrives at a reader location, it is seen and our system automatically processes the appropriate tracking transaction."
Burn agrees RFID is an upgrade over other tracking systems but argues it still has its flaws.
"Radio frequency chips are inexpensive but the problem is the controlling software - it's costly," he says. "Then, you're going to have one person who just monitors that program. I have some customers who do operate that way - these growers have one person whose job is maintaining carts. If you have a guy whose job is managing carts, you will be on top of things.
"But even then, you wind up in a situation of still having to find carts within a 300-foot radius with RFID."
And if you're searching Home Depot or acres of a Top 100 growing operation for a single cart, your time is probably better off used elsewhere. Besides, if you do find the carts you're looking for at Home Depot, an independent garden center or another retail operation, you can't just take them. Can you?
"Even if you do find your cart, it may have other product on it," Burn says. "What do you tell your customer then? It's fairly difficult to solve. There are a lot of growers who think (finding a cart through RFID) will be the solution when, really, it won't. It only means you know where it's at. Then, you have to get it. You have to tell a $2 million customer they need to take that other product off your cart..."
... and growers won't dare ask that.
The Bottom Line
The bottom line with carts is all growers lose them. It's an unfortunate part of being a grower, but it's an accepted part of the industry here in the United States.
Still, equipment suppliers like Container Centralen are working to help growers retain carts by involving them in a common cart pool system that has growers work together for faster, more complete recovery of carts.
"Our long-term goal is to have the majority of U.S. growers within our system," Costin says. "A common cart system does offer a lot of efficiency - most supply chains end up with a standardized unit load platform - and we know from our success in Europe that the Container Centralen cart is a great fit for both horticultural growers and retailers.
"However, in the United States, growers have already made investments in their own non-standard carts. So migration to a common pool system has to allow for the useful life of existing grower carts."
It may be years, even decades, before a common pool cart system is developed in the U.S. For the time being, Container Centralen is trying to minimize cart loss through programs like its Equipment Protection Program that requires drivers to carry ID cards when picking up Container Centralen equipment.
The program gives drivers, store merchandising teams and staff from participating retailers the ability to request that whoever's picking up equipment present their ID (see ID on page 41). If a person is unable to present an ID, this can be reported to Container Centralen for a follow-up investigation and possible police action. To encourage reporting, Container Centralen is offering a cash reward program for receipt of actionable information.
"Getting on top of cart theft is going to be the result of multiple efforts," Costin says. "Container Centralen's driver ID program is one step. Increased understanding from retailers about how their cooperation can help reduce cart theft and related vendor costs is another, and a few high-profile examples of cart thieves being brought to justice will all help chip away at the problem."