NZ Dairy Sector Transport: Fonterra’s drive for transport efficiency begins
November 12th, 2009
Fonterra expects to reap $200m of savings in the three years to 2011 from its supply chain, mainly from its move to focus on four key export ports – Auckland, Tauranga, Napier and Lyttelton – and away from the use of coastal ‘feeder’ shipping services. This is being complemented by an increasing trend towards warehousing hubs, such as its Crawford St site in Hamilton, which is to have a cool store alongside the dry store. A similar hub is being built at Mosgiel, near Dunedin. CEO Andrew Ferrier says Fonterra’s target is to reduce permanent warehouses to about 45 from 80 currently, with the inevitable reduction in truck movements across the country.
The co-operative also has begun commercialising technology which allows it to increase the bulk density of powders, following development at a pilot plant in Palmerston North, with the aim of reducing shipping and packaging costs. Scaling up to larger production centres also helps streamline transport systems, such as ED4, the Edendale plant which has the world’s largest milk powder drier.
Ferrier says the complexity of Fonterra’s processing “creates opportunities” to align manufacturing with supply chain. At the peak of the season, the dairy company is picking up 3,000 tanker loads of milk a day and delivering them to 26 manufacturing sites which produce 2.2m tonnes of product destined for 140 global markets.
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