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Home » Labor issues, mass merchants put pressure on food distributors
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Labor issues, mass merchants put pressure on food distributors

January 1, 2003
DC Velocity Staff
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There's good news and bad news for food distributors in the newest study of industry trends.

First the bad news: The 2002 Food Industry Distribution Center Benchmarking Report indicates that food retailers and distributors are continuing to lose sales to mass merchandisers like Wal-Mart. According to the report, which was prepared for the trade organizations Food Distributors International and the Food Marketing Institute by Richard Kochersperger of the Food Marketing Group, 27 percen t of the food distribution centers responding to the latest survey reported lower volume than they did the previous year. Not surprisingly, the industry is consolidating in response to pressure caused by acquisitions or the closing of smaller-volume facilities.

Upping the pressure is the age-old difficulty of finding and retaining workers. "[A]lmost all food distribution centers are experiencing difficulty finding qualified associates," the report says, "with 23 percent indicating the problem is severe or critical."

But not all the news is grim. The research shows that food distribution centers continue to increase productivity, defined as cases handled through the DC divided by direct labor operating hours, with cases per hour up to 73. (Direct labor includes labor assigned to handling product, but excludes support activities such as maintenance.) In the report, Kochersperger says reasons for the gains include the growth of larger-volume DCs as a result of consolidation, the trend that finds DCs serving larger-volume food stores, and implementation of technology.

But the report also identifies the labor issue as a key factor limiting productivity gains. "Finding and keeping good people," Kochersperger writes," is the number one issue facing every part of the food supplychain."

Benchmark
Pay scales: Overall salaries and wagesfor warehouse employees, Jan. 1, 2002
Title Average salary + bonus Median salary + bonus
Director of logistics $101,878 $95,000
General manager 85,326 80,000
Operations manager 62,029 58,659
Traffic manager 57,086 55,050
Customer service manager 52,624 50,000
Office manager 41,224 39,500
Warehouse supervisor 42,052 40,998
Title Average hourly wage Median hourly wage
Forklift operator $12.19 $11.87
Order filler 11.38 11.00
Shipping/Receiving clerk 12.02 11.36
Customer service rep 12.50 12.00
Source: Warehousing Education and Research Council: 2002 Warehousing Salaries and Wages Study
Note: Average is total of all values divided by number of responses. Median is the value that falls in the exact middle of the range of all values.
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