The Official Blog of Penske Transportation Solutions

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Fresh Foods Distributor

This current customer – one of the largest produce distributors and fresh-cut processors serving the Southwest region – relies on its equipment to get products where they need to be, when they need to be there. For the company's Chief Financial Officer (CFO), reliability is key. "We're dealing with a perishable commodity," he says. "I need my trucks to run 99.9% of the time."

He turned to Penske Truck Leasing to help him manage his fleet. "I look at Penske as a solution," he said. "The reliability and the consistency; that is the biggest value that I see."

At first, he was reluctant to lease, but quickly realized it allowed him to focus on the core aspects of the business. "I want my team focused on buying the right product and having the right inventory and not on maintaining trucks," he said. "Internal operations is our focus, and that is the value of having the lease take care of the transportation-related headaches. I'm not a trucking company, I'm a wholesale produce distributor. You want the crucial thinking in your business to be focused on what makes the company money."

Utilizing leases has helped the company reduce a number of risks and given the company's CFO increased flexibility.

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Frozen Food Distributor

For Cold Front Distribution, a direct-store delivery supplier of frozen products, temperature is crucial. And it isn't always easy to find rental units that can maintain temperatures of 20 below zero. So when Kevin Hocum, chief financial officer for the Denver-based company, needed multiple high-quality reefers on short notice, he reached out to Penske Truck Leasing for help.

"They jumped on it," Hocum says. "Within two days they had units and delivered them to our site in West Texas. That was our first experience with Penske."

Those units performed well. "Historically the rental units we get don't keep ice cream at a cold enough temperature," Hocum says. "The Penske units are much better maintained, better quality reefers. They have always been very clean and ready to go. From a safety standpoint, that is a big deal."

Based on that experience, Hocum and his team chose to rely on Penske for future leases. "Penske had no skin in the game," Hocum says. "But they came in and said they wanted to earn our business, and they did."

Cold Front Distribution currently uses a mix of full-service leases and finance leases, but Hocum says he will only use full-service leases going forward. "We don't have the bandwidth to have a group of people only managing the trucking. Time is money," Hocum says. "We've decided the only way to go is full service."

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Large Poultry Supplier

Poultry producers, navigate a complex array of supply and delivery challenges to ensure their food arrives fresh, wholesome, and on-time. When transporting poultry products, drivers must adhere strictly to the Food Safety Modernization Act (FSMA). Drivers must be highly trained in food safety and compliance with expertise in material handling and storage. Further, the proper refrigerated trailer or refrigerated truck temperature must be maintained and monitored throughout the trip.

Given the need for highly trained drivers, well-maintained refrigerated trucks and trailers, and continuous trailer temperature monitoring, some producers are shifting transportation of their products from an in-house model to an outsourced transportation model run by a third-party logistics provider like Penske Logistics to what is called dedicated contract carriage (DCC).

Penske Logistics works with a leading poultry producer and handles transportation to and from up to seven processing plants, as well as a wide number of plants who perform the cutting and trim processing. The supplier has a 24/7 operation to ensure their customers receive the freshest poultry products possible. The poultry producer needed a partner that was dependable, versatile, and able to handle time-sensitive deliveries, as well as adhere to food safety, quality and FSMA requirements.

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This global quick-service restaurant (QSR) is intently focused on how customers experience their retail stores and their products, which must be consistent and engaging each and every time. They seek logistics partners who share their high-performance standards—a 3PL who is flexible and willing to take a journey with them. Penske Logistics provides delivery of fresh goods, baked goods, dairy, frozen, and merchandise to restaurants throughout North America.

Since the relationship began, senior leadership from the QSR and Penske focused on aligning supply chain departments to uncover opportunities. Penske Logistics started with in-store delivery services in a single market. It has expanded to include transportation elements and the operation of cold chain storage and ambient distribution centers.

Supply Chain and Logistics Tools

With more than 500,000 deliveries a year for this QSR, having the right software and technology in place is critical for success.

According to Andy Moses, senior vice president of sales and solutions, Penske Logistics, a proprietary system helps design the most efficient routes with a route algorithm. Dedicated staff constantly redesign this QSR's routes for absolute optimization.

"We also invested in an entirely new fleet—new trailers with multi-temp units—and we rebuilt every single one of our distribution centers with larger coolers and freezers to support this restaurant's expansion.

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As a grocer, food purveyor or foodservice provider, you know that if you don't deliver the freshest food in the safest manner and shortest time possible – with built-in cost efficiencies to boot – you're going to have some pretty unhappy customers. And customer expectations are increasing all the time.

There's a call for longer product shelf life, a consumer demand for the freshest offerings and a growing desire to know exactly where food came from. There's also a need, driven by multiple sources – including the Food Safety Modernization Act – to provide transparency and monitoring of every product from the moment it's harvested until it reaches the consumer's plate.

These are some tall orders, and the pressure is only increasing. But there is good news, and it comes in the form of a refined combination of human expertise and advanced cold chain technologies.

How Do You Ensure Fresh Foods Arrive as Planned?

It's all about process, procedure and reliability. Leveraging the right level of technology is key to creating efficiencies.

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Unexpected spikes in food and beverage demand can cause far-reaching supply chain disruptions that affect everything from production lines to grocery store shelves, but challenges can also bring opportunities. Visibility and agility can help you respond to changing market conditions and flex up to meet evolving customer needs.

Adding Transportation Capacity

When transportation demand spikes, there are several ways you can ramp up your trucking capacity depending on the expected duration of the increase. Rental trucks and reefers can provide immediate supplemental equipment for a short-term or seasonal peak. They can also be a useful resource if you want to test a market before making a longer-term commitment.

Leases are another option if you're looking to add to your private fleet. You may even purchase used vehicles. We offer a comparative value analysis, which compares the cost of leasing with that of buying so fleet operators can make the best financial decision for the business.

You may also choose to partner with a third-party logistics provider, such as Penske Transportation Services, to expand your reach and capabilities. In addition to having our own dedicated fleet of trucks and drivers, we have an extensive freight brokerage operation with an expansive network of preferred DOT-authorized for-hire carriers to provide additional nationwide trucking coverage. Even if you're unsure of how much capacity you’re going to need in specific markets, a partnership with us allows you to react when opportunities arise.

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Today's busy customers demand fresher, more appealing offerings from their grocers and convenience stores. To meet these needs, shippers must guarantee that deliveries will be on time, with built-in flexibility to respond when volumes spike.

To improve operations, shippers can utilize a mix of technology, equipment and expertise to leverage the supply chain, which works to reduce spoilage, offer a wider range of items than they may have had in the past and provide the freshest food products possible, and as a result, focus on their core competencies and better compete within the marketplace.

Maximize Your Food Supply Chain

1. Develop a Separate Cold Supply Chain

Freshness drives the food business. To accelerate that freshness, some companies create separate supply chains for the different segments and profit centers within a store. Here's how this separation works:

  • Pull highly perishable items out of traditional distribution channels and put them in more rapid-replenishment distribution channels, often called fresh or cold chains
  • Use smaller, more agile trucks to make more frequent, speedy deliveries
  • Give the grocer the fuel efficiency benefits of smaller trucks for the rapid-refill items
  • Build smaller warehouses, closer together for quick, easy access
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The refrigeration units on trailers keep products cold to ensure quality and safety, but the equipment can be more demanding than its dry van equivalent. Maintaining the units is the key to success.

At Penske Truck Leasing, we service reefer trailers more often than dry vans. Refrigeration trailers can have more demanding applications with multiple stops. Typically, in those applications, the doors are used more often, and there are liftgates that are used regularly, especially if it is a multi-temp unit that delivers to the food joints and c-stores of the world.

We also regularly check the refrigeration units and the insulation on the trailer and provide all required documentation.

Document and Validate

To comply with food safety regulations, private fleets need to document maintenance on vehicles to ensure they’re in compliance. It is best to check equipment regularly and keep records. For example, if your unit says it is 72 degrees, you better validate it is getting to 72 degrees. Today’s regulations require cradle-to-grave recording or management of the product.

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The rise of digital technologies is changing the way food and beverage businesses operate, and advances in everything from artificial intelligence to blockchain have the potential to redefine companies while creating new opportunities. These advances are changing not only what is expected of businesses, but also what is expected of the leaders within the organizations.

The Business Side of Food and Beverage

Tata Consultancy Services calls the transformation Business 4.0. In a survey of 689 responses from senior finance executives in the United States and Europe conducted by CFO Research in collaboration with Tata Consultancy Services, about one-third of respondents ranked their finance functions’ digital capabilities in six categories as "moderate."

The six areas included analytics and measurement; agility and efficiency; business architecture; governance, risk management and compliance; shared services/business process outsourcing; and organizational alignment.

At Penske Transportation Solutions, we’ve focused on the digital capabilities that can benefit our food and beverage customers, and we have several solutions to help business owners capture, manage and utilize information so fleets can access data quickly and easily. This approach is particularly useful during planning, quarterly reviews and an audit.

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No matter the size of your business, supply chain networks can change quickly, and you must be able to react just as fast. Time-sensitive, fresh-food deliveries, lean supply chains, increased demand uncertainties and shorter product lifecycles all necessitate the ability to adjust food and beverage operations when change arises. Having an agile supply chain can give you a strategic advantage over your competition and allow you to handle disruptions or take advantage of new opportunities.

Here are three scenarios where the ability to address rapid change is critical:

Unexpected Changes to Consumer Demand

Sometimes it is hard to forecast what consumers will want or when they will want it. When the pandemic first hit, for example, there was a surge in demand for toilet paper packaged goods. Severe weather, such as a hurricane, can also cause a run-up in demand as consumers stock up on food and beverage supplies to make it through the storm. Even a chicken sandwich that goes viral or a hot toy that takes off at Christmas can leave shippers scrambling to ramp up production as well as transportation capacity.

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From knowing where your shipment is to ensuring that trucks are running at peak performance, data is a strategic asset, and Penske is using the vast amount of information from its connected fleet solutions to improve the health of its equipment, maximize fleet performance and improve uptime.

Connecting Fleets

With our connected fleet solutions, Penske marries the data off of the trucks with our maintenance data to create better uptime. Penske can take data from 300,000 vehicles and begin to see patterns of codes that might indicate an issue. Without that scale, you would never have the amount of data you need to get that benefit.

Enhanced Fleet Performance

Using data off the truck enables us to be more proactive and leads to a more customized maintenance solution for improved fleet performance. Penske uses the truck data to identify failure rates and shape preventive maintenance practices to get ahead of a potential failure. We also know which combination of vehicle fault codes can lead to a breakdown and work with our shops and our customers to proactively schedule a truck for service to get ahead of potential issues before they become a problem.

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The supply chain is a critical component of any business, and supply chains must function even when things don't go as expected. Having a contingency plan enables you to react proactively if an unexpected event or opportunity, such as a surge in activity, occurs.

While planning ahead has always been important, the recent pandemic has only accelerated the need for executive contingency planning – especially as it relates to transportation, warehousing and fulfillment to meet rapidly shifting consumer demand and preferences. There are several critical components of an effective supply chain strategy.

Flexing Up or Down

When creating a contingency plan, you need to give yourself options to flex up or down as needed. We offer several resources you can integrate into your contingency plans, including rental trucks and short- and long-term leases. You can also turn to logistics providers to obtain the space you need through a dedicated or for-hire fleet.

Adding Capacity

You can boost your fleet capacity through rental trucks or short-term leases to handle fluctuations in demand. If there is a sustained increase in demand, you can invest in equipment through long-term leases or used truck purchases.

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The business world is full of unknowns, but there are several ways leasing can help you minimize transportation-related risks so you can focus on your core competencies.

At Penske Truck Leasing, we provide a range of services designed to help you solve delivery challenges unique to the food and beverage industry. From pickup through delivery, we can help you spec the right vehicles and maintain them throughout the life of the lease. Here are a few ways a full-service lease helps you minimize risk.

Control Costs

Leasing provides a lower upfront capital investment and predictable monthly payments, which ensures there are no surprises that negatively impact your budget. Because financing costs are established in advance, there is no concern on what costs will be long-term.

Along with greater predictability, leasing provides increased visibility into overall life cycle cost, allowing you to make more informed decisions regarding your future equipment needs. Leasing also frees up capital for use in a company's core business.

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In a transparent supply chain, every link has access to relevant information on the origins and status of products. Transparency underpins consumer trust—a key relationship at a time when the safety of food supply chains is coming under intense scrutiny.

It's not surprising, then, that achieving supply chain transparency has become a hot-button issue in the food and beverage industry.

Critical Ingredient: Communications

An important feature of transparency is that it depends, to a large extent, on a company's ability to exchange information with partners. It can't be achieved in isolation. Visibility, on the other hand, is less dependent on communication across the supply chain.

Shay Scott, executive director of the Global Supply Chain Institute at the University of Tennessee, makes this clear in the trade journal Inbound Logistics. "Visibility provides a company with knowledge of activities across its supply chain; transparency is what and how it communicates that knowledge to customers, partners, and stakeholders."

Transportation Challenges

There are many ways in which you can enhance supply chain transparency. A notable example is addressing information black holes in transportation legs, where gaps in visibility can lead to transparency issues and loss of sleep for shippers.

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The way the world does business has evolved and, as a result, it continues to affect the way supply and distribution networks operate in both the short and long term. Stores are experiencing fluctuations in supply. At the same time, groups such as farmers are having trouble with moving goods to the people who need them. Restaurants are adjusting delivery and outdoor seating models to meet current guidelines, while also planning for what the future holds. These ever-evolving changes have affected businesses in significant ways with the need for agility more important than ever.

Having access to the right vehicles can help no matter what your size or type of operation, allowing you to quickly pivot and keep up with rapidly changing landscapes.

Perishable Goods

Perishable goods typically require a refrigerated vehicle, or "reefer," which keep food at a controlled temperature and help maintain freshness and quality, meaning a longer shelf life and less waste.

At Penske, our reefers have up to an 8,000 lb. payload capacity to handle many of your food, beverage and other temperature-sensitive transportation needs. We offer both CDL and non-CDL refrigerated trucks as well as refrigerated trailers in our rental fleet, and they can be rented on a long- or short-term basis.

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Penske employees

The Penske Code for Business Conduct reinforces our commitment to doing business in accordance with the highest legal and ethical standards. The Code sets forth general principles on key integrity issues and guides associates in upholding our ethical commitment. A copy of Penske's Code for Business Conduct can be found here.

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Penske employees working together

Penske is a company where people help people move ahead. One way we do this is by promoting a culture and an environment that embraces diversity and inclusion. As a result, we are a stronger, more competitive company that better reflects the customers and communities we serve around the globe.

Brian Hard, President and CEO - Penske Truck Leasing


Diversity and Inclusion Mission Statement

Penske is a global company with diverse customers, businesses and associates. We will improve and grow our businesses by supporting a work environment that is diverse, inclusive and respectful, so we can draw from the talents, backgrounds and varied perspectives of all our associates.

This inclusive culture will enhance our ability to attract and retain the most talented leadership and workforce, thereby enabling us to better serve and broaden our customer base, and will solidify our status as the best provider of transportation support and supply chain management services.

Access Related Reports

More than 40 diversity and inclusion practitioners recently attended the first Diversity & Inclusion (D&I) Symposium at Penske’s headquarters in Green Hills, Pennsylvania, to network and explore issues of diversity and inclusion that impact their businesses. The event was hosted by Penske and Wawa.

“We wanted to provide a forum for diversity practitioners in our area to network and speak honestly and openly about diversity and inclusion topics,” said Delphia Howze, Penske’s manager of diversity & inclusion and corporate HR, who organized the event with Elizabeth Moore, Wawa’s manager of diversity & inclusion. “At Penske, we recognize the importance of creating a warm and inclusive environment for each associate. The success of our associates equals the success of Penske.”

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Penske Truck Leasing and Penske Logistics have been steadily growing and cultivating relationships with minority-owned and women-owned businesses for well over a decade. The effort is a part of an ongoing initiative to promote diversity and inclusion at both companies.

“We’re committed to growing and supporting our diverse supplier base companywide,” said Art Vallely, who leads Penske’s corporate procurement activities as senior vice president of rental and vehicle management.

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