By its nature, distributing fresh produce presents a daily challenge. Whether the business is growing, shipping, wholesaling, or retail, all sales and marketing efforts may be in vain if product does not arrive on time and in good condition.
In the competition for produce customers, Organically Grown Company (www.organicgrown.com) of Portland, Oregon, faces the same challenges as other distributors but has determined that the best response is to concentrate on its core business and source services from its vendors. As a cooperative of 24 farms, the company has spent the past 25 years building a refrigerated transportation network with distribution from Northern California to British Columbia and as far east as Idaho and Montana. As a result, consumers in the region have grown familiar with the 120 fresh products sold under the “Ladybug” label.
In fact, since Organically Grown (OGC) was formed in 1978, it has grown to be the Pacific Northwest's largest wholesaler of organic produce, says Chris Petrick, the company's fleet operations manager.
20% annual growth rate
Starting as a modest farmers' cooperative, OGC continues to grow in line with the public's demand for organic produce. Over the past six years, it has grown at an annual rate of more than 20%.
To serve a customer mix that includes retailers, restaurants, juice companies, food processors, and produce wholesalers, OGC operates a fleet that includes three Kenworths T800s, three trailers, and three Kenworth T300s. All are leased from Trent Inc, the local PacLease franchise.
The T800s pull 48-ft Utility 2000R trailers cooled by Thermo King SB-III Whisper units. The tractor-trailer combinations make deliveries to southern Oregon and as far north as Bellingham, Washington. Longer runs to California, British Columbia, Idaho, and Montana are handled by owner-operators.
For local and regional operations, which include runs to Seattle, OGC uses T300 straight trucks with 22-ft bodies manufactured by Summit Body & Equipment in Portland. They are equipped with Thermo King MDII-50 SR refrigeration units with electric standby and cab controls. For store door deliveries, trucks have hydraulic liftgates.
Four trucks still owned
Organically Grown's remaining company-owned trucks — a mix of four Internationals and Freightliners — will be phased out of service and replaced with leased Kenworths on a mileage-based schedule. Until those four trucks are replaced, PacLease provides contract maintenance, saving OGC the expense of operating its own shop or purchasing service from a third party.
According to Petrick, OGC's T800s average just 75,000 miles a year, primarily running to Seattle six days a week. When a leased truck is in the shop for maintenance or repair, a replacement tractor is provided. “PacLease is really on top of it,” Petrick said. “We have our trucks serviced every 6,000 miles. If there is a road emergency, they send someone to repair it, or send us another truck.”
For road breakdowns, the PacCentral emergency roadside assistance program provides round-the-clock coverage, 365 days a year.
For Organically Grown, premium equipment, dependable maintenance, and roadside assistance add up to one very clear benefit. “We don't have to worry about failing to serve our customers because of a trucking problem,” Petrick says.
Lease includes paperwork expenses
In addition to the maintenance program, Petrick reports that leasing has proved to be cost effective because licensing, road tax paperwork, registration, and other administrative requirements are all part of the lease agreement.
Despite Petrick's enthusiasm for full-service leasing, Ted Hewitt, lease manager of Trent Inc, recalls that in 1999, Organically Grown was skeptical about leasing. However, he helped them design equipment for their routes and loads, so that they could concentrate on their primary business — serving the needs of fresh produce customers.
For example, the fleet has the horsepower and fuel economy to make the daily 350-mile round trip to Seattle and the maneuverability to make deliveries at the city's famous Pike Place Market, negotiating tight, congested surface streets and steep, often slippery hills. Hewitt recommended a 168-inch wheelbase T800 tractor. “It's been the perfect fit,” says Petrick.
Compared with the operation of OGC's previous fleet, which, due to maintenance and breakdown expenses, Petrick describes as “riding an expense roller coaster” from month to month, the new fleet has given the company reliable transportation at a fixed, predictable monthly rate. “Organically Grown has discovered that we could take care of their equipment on the highway at a predictable cost per mile,” Hewitt says. “They know exactly what they are spending and how much their transportation costs are going to be.”