Avoiding a 12% Cost Increase: How CTM Helped Dairy Farmers of America
Coyote's Collaborative Transportation Management team was able to help us mitigate rate inflation by effectively managing the day-to-day execution of our network. In addition, we were able to run an effective RFP with Coyote’s administration at the direction of our in-house strategy.”
– Corey Ritenour, Director of Transportation, Dairy Farmers of America
Quick Facts about Dairy Farmers of America
- $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 6+ years
Shipper Challenges
- Limit rate inflation in a tight marketplace
- Reduce exposure to a volatile spot market that peaked at 40% year-over-year rate increases
- Maintain consistent service levels
- Minimize resources dedicated to executing their daily transportation operations
Results
DFA was able to achieve a 12% cost avoidance in their RFP, and outperformed customers of similar or larger stature.
Protecting a Supply Chain in a Volatile Market
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.
Dairy products have a finite shelf-life — a reliable and efficient supply chain is critical to protect product integrity. DFA's daily operations depend on their supply chain supporting their vast network of buyers and sellers.
Coming into 2018, DFA was faced with rising freight spend and a difficult capacity environment. Operating in a heavily carrier-favored market, DFA's found it challenging to meet their daily shipment demands.
Better Transportation Operations with Coyote's Managed Supply Chain
To help assist with execution, DFA looked to Coyote’s Collaborative Transportation Management (CTM) team to help streamline their operations.
Since 2015, DFA has been a valued customer of Coyote's CTM group. The Coyote team has built close relationships throughout DFA, from load planners to the Director of Transportation, and understands all their needs and expectations.
DFA's Coyote team acts as a true extension of their own internal operations team.
”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 of Transportation
Part of DFA's 2018 strategy was to be more competitive with their peers. How could they operate at the same or higher levels of supply chain efficiency as companies of similar and larger stature?
This was going to be especially challenging to do while limiting shipping costs in the middle of the tightest capacity market we had ever experienced.
To help meet their goal, Coyote supported all their procurement, forecasting, customer service and KPI reporting needs.
Better Decisions through KPI Tracking
Along with the daily operational support with DFA's external buyer and vendor network, Coyote introduced of qualitative metrics within DFA’s own internal network.
By holding their own facilities responsible for hitting specific goals, DFA improved the performance of their internal groups.
The implementation of both external and internal KPIs greatly contributed to DFA’s ability to make more informed decisions and optimize their supply chain despite market conditions.
Notable implementations:
- Carrier scorecards
- Reason code reporting
- Service vs. cost analysis
Avoiding a 12% Rate Increase through Best Practices
In addition to implementing Shipper of Choice best practices, Coyote CTM helped DFA focus on executing a successful RFP.
CTM administered the bid, and was able to retain favorable freight spend performance versus both their industry peers and the marketplace overall.
*After cross-analysis of DFA’s year-over-year freight spend versus five other large food & beverage shippers in Coyote’s network, DFA came out as a clear winner.
On average, the comparative market group experienced a 16% increase in spend, while DFA kept rate inflation to only a 4%, effectively avoiding a 12% increase.
In addition to helping to limit spend compared to their industry peers by implementing a Shipper of Choice strategy, DFA's Coyote team also procured capacity at fair rates in a market crunch to keep their network moving.
With Coyote's help, DFA was able to maintain service while saving freight spend compared to their industry peers.
Less Time Putting out Fires, More Time Focusing on Growth
Through our ongoing operational support, DFA has the peace-of-mind, knowing that they’re supported by a trusted group of our CTM specialists.
DFA now has more bandwidth to 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 success in any market conditions.
Want to see what CTM can do for your supply chain?