Greenhouse Shipping Costs Down, But Concerns Remain

Greenhouse Shipping Costs Down, But Concerns Remain

Lucas Greenhouses ShippingGreenhouse Grower’s 2016 Young Plant Grower survey, which yielded responses from 93 producers, was about more than just production numbers and crop mixes. It also included questions about several issues of importance to young plant growers, including shipping concerns.

For example, in this year’s survey, we asked young plant producers how shipping costs have affected both their operations and their customers. Based on the feedback we received, costs have increased for some and dropped for others. Here’s a sampling of some of the comments:
• “Low gas prices have helped.”
• “Being on the West Coast, it is hard to get product to the East Coast.”
• “For truck shipments in particular, we have had to raise minimum box orders, but customers can mix and match products to meet the total.”
• “Costs are down due to a reduction in fuel costs.”
• “Due to our volume of shipping with FedEx, we have extremely good rates, which has allowed us to lower our shipping rates for our customers every year for the last four years. This encourages our customers to continue ordering or order more material year after year.”
• “Shipping costs have driven our program to be more regional, where customers can utilize our grower truck.”
• “We use FedEx ground to reduce costs.”
• “We have shifted toward customer pick up.”
• “We have an advantage due to our location in the heart of our market.”
• “We try to consolidate as much as possible.”
• “It is definitely becoming an issue.”
• “It is becoming very difficult to be cost competitive in markets outside of our geographic area, effectively shrinking our potential customer base.”

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More Efficiencies In Truck Deliveries

We also asked young plant producers how they are handling shipping costs, and if they are trying any new methods to help alleviate costs. Once again, here’s what these growers had to say:
• “We are trying to combine customer orders to build truck deliveries versus boxed deliveries.”
• “We just added a palletized FedEx freight program.”
• “We are trying less than truckload (LTL) shipping for smaller orders.”
• “We add it on to our plant cost, and always work with customers to determine the best way to ship.”
• “Shipping costs are passed along to our customers at the exact amount we are charged for freight. We never add a margin on freight because we don’t see that practice as being fair to our customers. We work with our FedEx reps to keep a close eye on our annual volume to see where we can improve our shipping rates.”
• “Palletized shipments have worked very well.”
• “We encourage pick-up by our customers.”
• “We developed a just-in-time process and local inventory for long-term and contract customers.”
• “We are using cardboard racks/one-way shippers.”

Growers Use Discipline To Address Shipping Challenges

What are some of the biggest challenges growers are facing today when it comes to plant shipping, and what changes are they making to deal with these challenges? Two different growers share their thoughts.

“Our biggest challenge is analyzing and organizing orders with large customers every day, and then (within a two-hour window) having pick sheets complete, truck routes organized, and orders entered for the following day’s shipments during peak season,” says Brian Gold of Pineae Greenhouses in Ogden, UT.

“A year ago, we invested in a new software system from SBI and have been working with them to constantly improve and meet our customers’ and our internal replenishment goals. This has resulted in improved turns at the store level, as well as significant comparable store sales growth.”

Another grower, Lisa Ambrosio of Wenke Greenhouses in Kalamazoo, says the challenges are numerous.

“Truck drivers are a major factor currently and will only get worse,” Ambrosio says. “Full carts save money, but the customers want space on the racks so they are easy to unload and the plants can remain on the cart for longer. It’s hard to balance this; accurate inventory is a must, but it requires a lot of discipline.”

Ambrosio says Wenke has put a lot of effort into getting orders further in advance so the operation has the extra time to be efficient with people and delivery.

“We continue to focus on having an accurate inventory to start with.”