Eden Prairie, Minn.-based C.H. Robinson has been perfecting the concept of just-in-time logistics for more than 100 years, delivering fresh fruits and vegetables to customers across the United States and throughout the world.
Just-in-time logistics is all about getting products to where they’re needed at a specific moment in time to either continue a manufacturing process or complete a final delivery. The concept has come front and center during the past 20 years as companies continue to shrink their inventory holdings.
At Eden Prairie, Minn.-based C.H. Robinson, just-in-time logistics is nothing new. In fact, the company has been perfecting the concept for more than 100 years, delivering fresh fruits and vegetables to customers across the United States and throughout the world.
“Over the years, we have successfully created just-in-time logistics through our fresh produce transportation,” said Jim Lemke, president of the company’s Robinson Fresh division.
Fresh produce, such as fruits and vegetables, has an extremely narrow window to attract customers. A day—or even hours—lost in the delivery of fresh produce to store shelves could spell disaster in terms of sales.
While there are many obstacles to face within perishable logistics, Robinson Fresh makes it appear seamless and even simple to the customers in stores and restaurants.
John Wiehoff As John Wiehoff, chief executive officer at C.H. Robinson, explained in a recent interview, the just-in-time nature of produce logistics is widely taken for granted by American consumers today.
“When it’s 20 degrees outside, you can still step into a grocery store to find that the produce section looks great, and the fruits and vegetables are still relatively cheap,” he said. “Without that carefully managed supply chain for fresh product, any one of those items would be damaged or ruined.”
For Robinson Fresh, it has never been enough to sit in the middle of this business as a pure provider of third-party logistics services. Instead, the company prefers to own the entire produce supply chain—from the farm field to the retail outlet—whenever possible.
“We do not operate as a broker of produce,” Lemke said. “Within fresh produce, we own the product until it changes hands to the receiver. That ownership starts as early as the seed.”
Robinson Fresh doesn’t have to own the land and farming equipment, leaving that in the hands of preferred grower groups and individual farmers. Depending on the contract, the company works with the growers on what seeds to plant, how much to grow for the season, and even monitoring irrigation. Robinson Fresh also provides a repacking solution for produce, including packaging and branding.
For example, there’s a fourth generation farmer in Tifton, Ga., with whom Robinson Fresh contracts to grow greens and broccoli. In addition to 400 acres in southern Georgia, the farmer also has another similar size patch of ground 300 miles away in northern Florida.
“We’re helping the farmer get the crops in the ground, improve the yield and harvest at the appropriate time,” said Craig Arneson, general manager of north region sourcing at Robinson Fresh. “We tell them how much we want to plant based on the demand, which we base on forecasts from food service buyers and retailers.”
In the case of the Georgia farmer, Arneson said Robinson Fresh has contracts for 70 to 80 percent of the greens and broccoli produced and will sell the rest on the open market.
Robinson Fresh holds various licenses to supply several big brand labels with fresh fruits and vegetables. It supplies Mott’s with apples and pears, Tropicana with citrus and pineapples, Welch’s with grapes and berries, and Green Giant with vegetables, to name a few.
The level of exclusivity as supplier to a particular brand varies. For instance, PepsiCo, the owner of Tropicana, oversees the juice side of its business, while Robinson Fresh is the supplier for its fresh fruit sales. Likewise, Robinson Fresh does not partake in Welch’s juice-making activities, but for more than 15 years has been the exclusive marketer of Welch’s Fresh Grapes in North America and recently overseas.
Arneson said the name Robinson Fresh is not displayed on the front of any produce packaging. On the back of the packaging in small print, however, it will read “Distributed by Robinson Fresh.”
Robinson Fresh does sell fruit and vegetables via its own brands though, including Tomorrow’s Organics, Happy Chameleon, Melon Up, and Fresh ‘n Easy. In addition, Robinson Fresh supplies fresh produce to retailers under their own private labels.
Nomadic Crops. While Robinson Fresh handles the majority of fresh produce now available to consumers, the company focuses its growing and marketing efforts on about a dozen specific fruit and vegetable categories. They include melons, tropical fruits (pineapples and mangoes), dry vegetables (cucumbers, peppers and squash), asparagus, corn, greens (collards, mustard, kale, and turnips), citrus (oranges, lemons, mandarins, clementines, and limes), apples, grapes, broccoli, cabbage, and tomatoes, with both conventional as well as organic varieties of each.
Lemke said Robinson Fresh picked these 12 categories of fruits and vegetables based on their high consumer demand, fragmented grower base, need for sophisticated logistics services and “nomadic” nature. “We follow the sun,” he said.
Many of these produce categories are not grown solely in one place, nor at one time of the year. In fact, they may grow in several locations around the world with harvest times varying throughout the spring, summer and fall. When winter settles into North America, Robinson Fresh is already working with growers of similar crops in Central and South America to continue the flow of fresh produce to grocery stores and restaurants throughout world.
“Nomadic crops and their coordination with our global logistics network is what makes this work,” Lemke said.
This is what sets Robinson Fresh apart from most wholesalers, which tend to maintain local, market-specific facilities. “In fresh logistics, there’s lots of local specialists, but no one with the breadth of size and services like us,” he said.
Robinson Fresh’s biggest produce category by volume is melons. In 2011, the company acquired Davis, Calif.-based Timco Distributing, a company that specializes in mini-melons. Melons are another crop that follows the seasons throughout North and South America. “At any given time of the week, we’re shipping hundreds of trailers of melons,” Lemke said. The melon business in the United States actually peaks on July 4, when many people celebrate the nation’s Independence Day through large family gatherings and community picnics.
“We’re working with all sizes and types of retailers on getting those melons just in time for July 4th,” said Wiehoff. “We’ll even work with the growers to modify watering to have the crop ready at the right time. Other commodities don’t need that level of work.”
Shipper Within. C.H. Robinson has come a long way from its humble beginnings when its founder and namesake, Charles H. Robinson, sold produce to homesteaders across the Red River Valley of North Dakota at the end of the 1890s.
The company, which moved its base of operations from Grand Forks, N.D. to Minneapolis in 1919, continued to expand its produce business throughout North America, as well as its specialized transportation services via trucking companies and railroads for these commodities during the twentieth century. From 1968 to 1986, it even operated its own fleet of trucks.
However, it was the passage of the Motor Carrier Act in 1980 that deregulated the nation’s trucking industry and paved the way for C.H. Robinson to expand its presence into third-party logistics services across all modes. The company has since become one of the largest 3PLs in the world and has operations in Europe, Central and South America, Oceania and Asia, handling a wide spectrum of commodities and shippers.
“It’s easy to understand how the fresh marketplace could get lost in it,” said Lemke, who joined the company in 1989. “We would bump into customers that didn’t know we handled fresh produce, and others in fresh produce that would say, ‘you do transportation, too?’”
Realizing this, C.H. Robinson spent several years talking with its produce customers about a brand strategy, and in 2014 came up with the name Robinson Fresh.
“Our fresh produce business is growing with our transportation,” Lemke said. “Yet, we want to make sure that these customers know where to find us.”
Robinson Fresh operates as a shipper within the organization. According to Wiehoff, Robinson Fresh represents about $2.4 billion in annual revenue, about 15 percent of C.H. Robinson’s $13.5 billion total revenue.
The company will also work with 3PLs outside the C.H. Robinson network, when necessary.
“No single logistics provider can meet every need, every day,” Lemke said. “When a surge comes, or when there are unique market conditions, we will work with others to satisfy customer needs.”
Due to its longtime experience as a transporter of fresh produce, C.H. Robinson continues to work with other produce growers and shippers as a pure 3PL.
For the past two decades, C.H. Robinson has handled many aspects of Ocean Spray’s transportation business, from inbound raw materials to refrigerated less-than-trailerloads.
“In 2015, we challenged our carriers to raise the bar on service and acceptance,” Chris Domey, senior manager of logistics at Ocean Spray, said in an April press release. “C.H. Robinson acknowledged the challenge and utilized their top-notch staff, innovative processes, and industry-leading technology to maintain a 99 percent on-time and acceptance rating, while moving more than 9,000 loads.”
Source: C.H. Robinson
Growing Technology. In its many years in the fresh produce industry, C.H. Robinson has long been recognized as a leader in cold-chain technologies.
While it no longer owns refrigerated trucks and containers, the non-asset-based company works closely with those providers that use the latest shipping technologies to preserve fresh fruits and vegetables during transit, giving them a longer shelf life.
Robinson Fresh also continues to research and develop produce packaging and growing practices, primarily at its facilities in Davis, Calif., and Tifton, Ga.
Several years ago, the company began looking for an alternative to the wooden crates long used for packaging sweet corn. Besides their flimsiness, these crates were known to cause injuries when handled at distribution centers and retail outlets due to their metal wiring and splintered wood.
Robinson Fresh eliminated this problem altogether by developing the Crate-wise, a lightweight, recyclable plastic container. Its overall design even allows for up to 30 percent more crates of sweet corn to be loaded per truckload.
On the information technology side, Robinson Fresh manages shipments using C.H. Robinson’s global transportation management system, Navisphere, which the company rolled out in 2012.
“Technology gives [produce growers/shippers] more visibility today,” Lemke said. “You need the right data and analytics to go with the supply chain to make it work.”
Ten years ago, Robinson Fresh and others in the fresh produce business were under pressure from large grocery retailers to integrate radio-frequency identification device tags to track fresh fruits and vegetables from the farm field to the store shelf. The RFID tags, however, did not stand up well to the continuously moist environment of produce shipping.
For now, barcodes printed on the packaging remain the primary means of tracking produce through the supply chain. “I still think RFID will play a role in the future,” Lemke said.
Robinson Fresh also makes C.H. Robinson’s recently built innovation center at its Eden Prairie campus available to its produce customers to collaborate on new supply chain solutions and strategies for their products, explained Mark Meier, a manager for the innovation center.
One area of logistics in which fresh produce has still yet to grow is e-commerce. This business involves the online sale and shipping of smaller lots of goods via express carriers, couriers and the U.S. Postal Service.
“In e-commerce, [produce] is still an emerging growth area,” said Drew Schwartzhoff, director of marketing at C.H. Robinson. “It’s one of the hardest things for consumers to accept online. However, strong brands can play a role in gaining that consumer faith.”
Chris Gillis is Editor of American Shipper. He can be reached by email at [email protected].
