San Francisco-based Del Monte Foods and Pacer International, Inc. announced that Pacer’s supply-chain services unit will provide comprehensive logistics services to Del Monte.

Del Monte, one of the country’s largest and best known producers, distributors and marketers of premium quality, branded and private label food and pet products, generated more than $3 billion in net sales in fiscal 2004.

According to Sourabh Roy, vice president of Transportation and

Logistics for Del Monte Foods, “The new multi-year agreement is aimed at improving the reliability of Del Monte’s deliveries to our customers, while reducing long-term distribution costs.”

He said the Supply Chain Services division of Pacer Global Logistics, based in Dublin, Ohio, will help manage deliveries of Del Monte products from more than 30 plants and distribution facilities to more than 2,800 customer distribution centers and retail outlets annually, using its multi-modal expertise and web-enabled tracking capabilities.

“Pacer will handle virtually every Del Monte product that the American consumer can find on a retail shelf,” said Mike Fielden, president of the Supply Chain Services division. The division will manage the contract and will serve as Del Monte’s single point of contact. “In the process,” he said, “Pacer will manage or directly provide service using every appropriate transportation mode - whether intermodal, highway (truckload), ocean, or conventional rail.”

Key to value

“One of our unique strengths in this arrangement is that Pacer can leverage all the freight transport and logistics capabilities that already reside in the Pacer International group, as well as using other providers, in an effort to provide the most cost-effective, reliable service possible for Del Monte,” said Fielden. “This is the key to maximizing value for both parties.”

Pacer International’s chief executive officer, Don Orris, said,

“We are delighted with the confidence Del Monte has placed in Pacer’s ability to further strengthen the national Del Monte distribution network. Along with product quality, effective distribution has been one of their hallmarks.” He added, “Our goal is to add value to this distribution network and drive greater customer satisfaction for Del Monte and its customers.”

Both Del Monte and Pacer extolled the agreement for its strong emphasis on collaboration. “We will engage in joint planning of future distribution requirements so that, with Pacer’s support, Del Monte can drive its business forward. We will accordingly share in cost-savings that will be generated through our close collaboration,” said Del Monte’s Roy.

Specific services

Pacer will provide a wide range of third-party logistics services for Del Monte, basically handling the movement of all food and pet products, including refrigerated and frozen products, between production or packing plants; Del Monte and customer distribution centers; and in many cases, to the ultimate point of sale. The agreement includes imported as well as domestic products.

Specifically, Pacer will receive and manage product orders electronically; negotiate rates and tender shipments to carriers; manage and track shipments; verify deliveries; evaluate and pay carriers; manage claims transactions; and provide operating and financial performance reports to Del Monte management. Fielden noted that the entire operation will essentially be managed without paper, other than exception-based reports.

Concluded Sourabh Roy of Del Monte, “While Del Monte has long been recognized for its national distribution capabilities, these are challenging and competitive times, and our quest for further improvement is strong. With driver shortages, security issues, capacity and congestion concerns and other uncertainties, we are especially pleased to have a third-party logistics industry leader as our distribution solutions provider.”