Web-based purchasing cuts food distribution fleet costs

March 1, 2003
Wholesale food distributors such as Bozzuto's in Cheshire, Connecticut, report savings of 10% to 15% by using FoodFleetXchange, a purchasing partnership

Wholesale food distributors such as Bozzuto's in Cheshire, Connecticut, report savings of 10% to 15% by using FoodFleetXchange, a purchasing partnership of Food Distributors International, the American Wholesale Marketers Association, and the Food Marketing Institute that is managed by AmeriQuest Transportation and Logistics Resources Corp. The savings have been focused on consumable items such as tires and batteries.

In its more than 50 years of operation, Bozzuto's has grown from a small distributor into a regional cooperative wholesaler with sales of more than $900 million annually. The company supplies groceries and perishables to 550 supermarkets from its 1 million-sq-ft distribution center. AmeriQuest is a privately held transportation and logistics provider operating from 450 locations. It offers the combined purchasing power of several hundred fleets operating more than 230,000 trucks. Vendors to FoodFleetXchange and a related organization for commercial fleets, CarrierFleetXchange, include CITGO Petroleum Corp, Yale Lift Trucks, Bandag Inc, Sterling Truck Corp, Continental General Tire, Freightliner Trucks, Morgan Corporation, Cummins, GMC, Imperial, and Fleetguard. For a complete list of vendor partners and AmeriQuest services, visit www.ameriquestcorp.com.

The program can also be reached through the FMI site at www.fmi.org. The link to the FleetXchange site is at the bottom of the FMI page. The service offers special pricing and rebates on trucks, engines, transmissions, and truck bodies as well as warehouse equipment and yard tractors.

FoodFleetXchange provides the buying power of the combined food distribution associations and automates the ordering and fulfillment process. Companies using the service continue to do business with their traditional suppliers — relationships that often are decades old. Payments and credits are handled by the automated AmeriQuest e-commerce system, which eliminates the paperwork.

The service was launched late in 2001 for members of Food Distributors International. With the merger of FDI and FMI, the online buying service has been extended to Food Marketing Institute members.

The system provides economies of scale to users. Joe Callahan, vice-president of transportation at Bozzuto's, says that the company began to see a decline in the cost of tires and retreads after only a few months of FoodFleetXchange use. Bozzuto's is beginning to explore use of the system for other purchasing. It is quick, simple, and provides significant data about purchases, Callahan says.

Users of the service range from the small Laurel Grocery Company in London, Kentucky, to the giant wholesaler Nash Finch Company with its $4.1 billion in annual sales and operations in 28 states. Nash Finch is based in Minneapolis, Minnesota. Many users report savings in the 15% range. Stater Brothers, a 156-store supermarket chain with operations in six Southern California counties, says that it has saved more than $100,000 on tires and capital equipment in just a year on the program. The business model used by AmeriQuest to provide these services is patented.

In addition to increasing buying power and automating purchasing, the FoodFleetXchange service provides research and educational opportunities with product reviews and updates on government regulations.

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