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Presentation of the NASC results at multiple other conferences has stimulated discussions in the
research community to address the issues raised at the conference. USDA and CIAS are working
together on a project to further explore regional food freight issues, with a focus optimizing
freight truck service by supporting its transformation into a multi-modal option that could
4
Background
Since 1989, faculty, staff and students with the CIAS have been working with private, nonprofit
and public sector partners in the Upper Midwest to increase sustainable regional food production.
The CIAS has a core commitment to participatory research; it develops research projects based
on farm business observations, needs, and insight. The CIAS meets formally and informally with
small to mid-scale farmers and regional food supply chain participants to build agreement
between businesses or identify business uncertainties that could be addressed. Our theory of
change is based on Complex Adaptive Systems theory and an understanding that system
structure dictates how people act within the system.
Farmers made it increasingly clear to the CIAS that moving local food to wholesale markets
presented distinct challenges to current transportation systems, many of which were specific to
product categories. For example:
Organic Valley, a certified organic cooperative based in Viroqua, WI, built their business
around differentiating regional dairy products, and partner with existing processing and
transportation businesses contending with transportation challenges, especially in the
Chicago region.
Regional apple growers need to maintain the cold chain (safe temperatures throughout
distribution) to ensure product quality for regional markets.
Emerging local food aggregators are struggling to find transportation opportunities for their
products.
Independent regional distributors are contending with driver shortages due in part to new
safety regulations for drivers.
As the grocery industry has consolidated, much of the supply chain infrastructure that had served
regional markets has withered. In the Upper Midwest, moving local food into wholesale markets
is more difficult with some products than others. This is the case when production volume falls
below the threshold required to participate in the increasingly consolidated retail and institutional
food markets. Privately-owned distribution centers have replaced publically-owned terminal
markets in facilitating food flow to cities. Farmers resort to filling small trucks to supply
restaurants and retail groceries in distant urban markets, but incur higher unit costs to do so.
Farmers supplying school districts are also challenged to do so in a cost-effective way, given low
profit margins in these supply chains. Farmers selling into wholesale markets have difficulty
moving food into Chicago because of congestion, warehousing patterns and historical
relationships between markets.
Multi-systemic change is needed to resolve these obstacles. Systems change is difficult to plan,
but can emerge when conditions are favorable (Parsons 2007; Choi et. al. 2001; Li et. al. 2006;
Kim et. al. 2011; Maani & Maharaj 2004). The private sector voiced the need for a neutral
meeting place to deliberate and discuss the contradictory views and opinions regarding regional
food distribution, a place where representatives from the full supply chain could share their
perspectives. The simple act of telling their personal narratives allowed people, and their
businesses, to better align supply chains. The NASC conference provided such an opportunity to
a wide variety of businesses and facilitated their networking, resulting in a clear new goal: to
simultaneously support sustainability values and to improve regional supply chain efficiencies.
5
Key Themes
The conference served as a jumping off point for future conversations and investigations into
important supply-chain opportunities. Presentations focused on organizational and technical
points, and it is from those discussions that the following themes emerged.
Six, equally important, issues were identifiable
as dominant in participant conversations
during the two-day conference. The issues
were grouped into the following themes:
defining local, market differentiation,
logistics, first/last mile, supply chain scale,
and supply chain infrastructure. Figure 1
shows these themes.
Supply
Chain
Infrastruc
ture
Supply
Chain
Scale
Defining
Local
First/Last
mile
Market
Differentiation
Logistics
2.
3.
4.
5.
6.
authenticity and the story behind the food product, looking for sustainability indicators such
as organic, fair trade, and social justice aspects. Developing appropriate supply chain
arrangements for regional food systems is predicated on understanding this consumer-driven
market change.
Market differentiation. The wholesale market for food products is complex. White table
cloth restaurants, fast food chains, institutional kitchens, boutique retails and big box
supermarkets have distinct and different supply chain partners. Sales strategy frequently
determines supply chain partners and logistics relationships.
Logistics. Relationships drive logistics, and logistical decision-making. Logistics drive
transportation infrastructure development. Supply chain relationships foster efficiencies and
economic opportunities, yet participants noted that there were few, if any, opportunities for
them to find strategic supply chain partners. They thought that more opportunities such as
those provided by the NASC conference, are needed to develop the necessary relationships.
First/last mile. Farmers are making real progress in scaling up production and aggregating
products for wholesale market. As farmers address first-mile issues and become shippers in
the transportation system, integrating them into established trucking routes may pose
challenges. Last-mile issues, such as inner city congestion from urban sprawl and unplanned
growth, continue to vex shippers, carriers and the urban dwellers alike. Last-mile challenges
also include food access for inner city neighborhoods, where the cost of bringing product into
the city is high, the distribution infrastructure is privately-owned and not linked to
community needs.
Supply chain scale. Regional food distribution faces the competing goals of reducing costs
and improving quality, while balancing market efficiencies with relational values. Vertical
integration of supply chains for large-scale food production represents one way to achieve
cost efficiencies. Another approach is to build supply chains at a regional scale with
independent businesses (not vertically-integrated) which may result in additional costs and
risks to businesses, while adding product value for consumers.
Supply chain infrastructure. Regions with less access to the conventional distributional
capital may be less vulnerable to supply chain disruptions and be more likely to have robust
local and regional food distribution networks. Supply chain transparency and the ease of
product tracking may be other advantages of local and regional food systems, through
information technology improvements and based on new traceability regulations.4
Additionally, there is a growing convergence between local food distribution and institutional
food provisioning and food banks where the demand for high-quality food is great but the
opportunity for profit-driven business development is weak.
Key Findings
Conference discussions and presentations led to findings that can be summarized into five
general areas of concern:
Grass Run Farms (Dorchester, IA), a regional grass-fed beef distributor serving a
predominantly upper Midwestern market emphasizes grass-fed flavor and the high
nutritional quality of its beef.
Goodness Greeness (Chicago, IL), a leading Midwestern distributor of organic produce
and the largest privately held organic distributor in the United States, showcases its
commitment to local and regional food distribution in terms of its relationships with
regional producers and contributions to organizations that support family farms and food
security, such as Farm Aid5 and regional food banks.
Distributors target local market segments that coincide with values-based markets, but local
itself is not the sole or primary marketing attribute. Retailers are reporting success in marketing
farmers rather than location people want to support, through their purchasing power, the values
they hold and the people and communities they know (Major 2013).
Measures of sustainable food distribution. As part of their emphasis on values-based
marketing, the participants were eager to learn about what the transportation sector uses to define
sustainable in their sector. How do alternate freight distribution modes fit together rail,
barge, delivery trucks vs. semis? What are the labor issues? How is risk addressed in
distribution, especially foreseeable risks like cold chain disruption, rising fuel costs, extreme
weather disruptions and increased regulation in response to freeway congestion?
Characteristics of sustainable food distribution are only now being defined. The businesses that
are building values-based supply chains are looking for strategic partners who are committed to
sustainability in terms of environmental, economic, and social goals. Early work in food systems
made an assumption that distance to market meant that less fuel was used to move food to
market, but a number of studies made it clear that it was more fuel efficient to ship full
truckloads a long distance than to move LTL short distances (Desrochers & Shimizu 2012).
Finding regional efficiencies in transportation is more complicated than anticipated.
Since the event, CIAS has made efforts to let other practitioners know what was learned and
shared at the meeting. Presentations were given to the American Planning Association, Extension
food systems educators, the Wisconsin Green Building Alliance, University of IL and
Northwestern students, the Midwest Value-Added Food Conference, the National Logistics,
Trade and Transportation Symposium, and the National Transportation Research Forum. Sharing
the conference outcomes with these diverse audiences honed the research teams understanding
of unique and shared experiences and helped to shape a follow-up research project, now in play,
to explore ways to optimize urban freight movement efficiencies. Using a similar strategy to
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ENDNOTES
1
http://www.marketumbrella.org/
The National Sustainable Soybean Initiative survey data at:
http://www.coolbean.info/pdf/soybean_research/national_sustainability_initiative/SoybeanSurve
yResults_2013_FINAL.pdf
3
USDA defines a food hub as a business or organization that actively manages the aggregation,
distribution and marketing of source-identified food products primarily from local and regional
producers to strengthen their ability to satisfy wholesale, retail and institutional demand. From
the report Regional Food Hub Resource Guide (Barham et.al. 2012).
4
FDA Food Safety Modernization Act (FSMA),
http://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm270851.htm
5
Farm Aid is an organization that raises awareness about the loss of family farms and raises
money to keep family farmers on the land (www.farmaid.org).
6
USDA What is Organic? www.ams.usda.gov/nop
7
The Institutional Food Market Coalition http://www.ifmwi.org; the Wisconsin Local Food
Network http://wilocalfood.wordpress.com; F-E-A-S-T Local Food Network http://localfeast.org; and the Local Food Association http://localfoodassociatino.org.
8
http://blogs.ei.columbia.edu/2011/12/01/rethinking-our-food-system-to-combat-obesity/
9
Ibid.
10
US Department of Transportation, Federal Motor Carrier Safety Administration.
https://cms.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-regulations
11
For more information, go to http://www.epa.gov/smartway/
2
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