With insight from 26 campus and stakeholder advisors, the support of the USDA-Agricultural Marketing Service’s Transportation Division and the input from regional food supply chain businesses throughout the region, CIAS releases its report on Regional Food Freight, authored by Michelle Miller, Bill Holloway, Ernie Perry, Ben Zietlow, Pete Lukszys, Nancy Chachula, Anne Reynolds and Alfonso Morales.
This 68 page report details the process we used to assess the Chicago region food system and our findings through the three year participatory research effort. It includes eleven sections with 17 figures to illustrate key concepts, along with extensive supporting materials. It presents three innovations with proofs of concept that could be applied widely in the region and beyond to improve food distribution, both in rural and urban regions.
Download a free copy of the report Regional food freight final.
Excerpt from the report
By considering the Upper Midwest regional food system as a whole, we were able to see patterns in how food could move more efficiently and support a more resilient, diversified agriculture. Food freight transportation links production and consumption regions into a complex web that has outgrown its ability to meet public and private objectives. Simple, targeted public and private investments in transportation and distribution infrastructure specifically to support small and medium supply chains could improve this.
Using systems tools, we identified potential solutions to food transportation-specific challenges, such as safety, congestion, and inadequate public resources for transportation infrastructure maintenance and development. All these potential solutions currently lay outside the traditional boundaries of the transportation system. By improving the food distribution system, they improve the transportation system, especially in a region critically important to national food flow, like Chicago. By using multiple methodologies, we gained a deeper understanding of how national and regional food systems work today, and how long-term food shipment trends impact current and future food production and markets.
Efficiency and diversity paradigms are fundamental leverage points in the food system. When we successfully optimize for both, we realize a more resilient food system that has the potential to elegantly address multiple business and public sector goals. Other paradigms that characterize the quality of system relationships, such as predation, competition, collaboration and cooperation, deserve a closer look, especially from a governance perspective. Identifying mutually advantageous ways to correct system failures through incentives is likely to improve supply chain dynamics more effectively than applying controls such as regulation.
Food systems have a number of critical thresholds that can be leverage points for improved food system organization. Sustainable agriculture practitioners are identifying bio-physical critical thresholds for food production, specific to the agricultural production region. In turn, they seek supply chain partners in transportation and markets that share their commitment to sustainability. Our investigation identified a number of transportation efficiency thresholds that shape the system and may serve as leverage for sustainability. Some are common knowledge within freight transportation and sustainable agriculture circles, while others may require additional research, especially region-specific research. They are:
- Cropping systems diversity: There is a need for greater farming diversification at the landscape scale, especially near megaregions, to hit the sweet spot between diversity and efficiency in food systems. The Chicago megaregion is a case in point, where Illinois farmers are less diverse than farmers in Wisconsin and Michigan Restoring agricultural diversification throughout the Corn Belt is important to regional resiliency, especially within the four hundred mile regional radius of large urban markets.
- Distance to market: Limited research suggests that farmers selling into direct markets realize a transportation efficiency when they are no further than 45-55 miles from point of sale while regional transportation efficiencies may be gained at about 400 miles or less because of engineering advances applicable to shorter hauls. To use hours of service regulations to best advantage, less than 200 miles is a round trip to market in an eight- hour day, if traffic congestion isn’t an iss These critical thresholds can help identify appropriate locations for regional distribution infrastructure. Farmers interested in pooling product for regional wholesale markets may want to limit their aggregation within the 45- 55 mile radius, and limit their markets to about 400 miles. To boost their access to significant local wholesale markets, shippers may want to partner with mid-size cities in developing combination facilities that both aggregate products and weave together multiple smaller supply chains so that they may also sell to wholesale buyers (such as groceries, institutions and restaurants) within about fifty miles to the terminal. Large cities that invest in distribution infrastructure may want to prioritize service to smaller, community-owned supply chains that are unable to invest in their own private warehouses necessary to receive shipments, and target shippers no further than 400 miles. Distribution infrastructure that is proximate to large cities and natural features such as the Great Lakes or mountains may change these mileage calculations.
- Truck size: 53’ trucks must be fully loaded for shippers to realize efficiency. This means shippers must be able to load 30 pallet footprints or a maximum combined weight of 80,000 pounds (tractor, fuel, gear, and loaded trailer). Farmers must aggregate their product for shipment at this scale to efficiently reach regional markets. It then follows that there must be sufficient production of various foods within a region for wholesale marketing to be efficient.
- Contracts: Regular contracts along the supply chain are more efficient than erratic, irregular relationships. The seasonal nature of production in the Upper Midwest, and extreme weather impacts on food production mean that shippers and trucking companies will either loose efficiencies in this part of the business or must find creative ways to overcome volatile conditions and associated uncertainty. Regular professional meetings for small supply chain businesses may improve communication and build trust Another approach may be rewarding north-south collaborative intra-regional supply chains.
- Terminals and trip segments: For regional wholesale food shippers to gain efficiency, they need one point to transfer ownership of produce. Combining regional trucking with last mile deliveries is inefficient. Terminals that operate with an explicit goal to serve small wholesale supply chains are increasingly necessary as national supply chains continue to consolidate even while extreme weather threatens those supply chains.
- Settlement patterns and city scale: Congestion barriers to free flowing traffic in urban and suburban regions create significant barriers to efficiency and associated costs that are shouldered by trucking companies and shippers. This leads to limited food access in poorer regions of cities. Rural regions lack food access when there is a lack of regional food production diversity and where supply chains are too large to efficiently serve them. Are there ways to more equitably share the costs of congestion and support smaller supply chains? There is a need to identify scalar sweet spots for transportation systems and other infrastructure that serve supply chains into urban centers and rural towns.
- Engine and fuel efficiencies: Considerable research on engine efficiencies is underway and can shape how we invest in food infrastructure to create positive incentives to adopt these engineering innovations. For instance, we know that OTR vehicles operate best at constant, higher speeds. We know that the price of diesel must reach about $3.75 before it is economically prudent for companies to invest in alternate fuel vehicles unless there are other economic incentives. Advances in hybrid technology may alter existing critical thresholds, as may other engineering innovations. Engineers are setting the pace for change so there is opportunity in anticipating and matching this pace.
Our investigation identified two distinct categories of regional food supply chain practitioners, defined by scale – the businesses that are scaling up from direct markets to wholesale markets, and the businesses that have a decade or more experience in wholesale markets and are looking for ways to make their supply chains more sustainable. These supply chain categories face unique and shared challenges and opportunities to move food freight regionally. To meet public sustainability and food security goals, each of these business categories may benefit from targeted public intervention to reshape the way food markets are currently organized, especially in light of urbanization. Our project identified three ways to reorganize food systems, each paired with proof of concept examples:
- supporting smaller, regional supply chains through collaborative, not-for-profit shipping terminals, as operated in Ontario;
- developing collaborative, not-for-profit drop yards to serve multiple midsize supply chains for urban freight moving through megaregions, similar to one developed by a large private company for a very large supply chain; and
- extending federal and metro-region support to regional food supply chains so that they may better serve regional markets, as in the Chicago example. Another example that logically follows is to promote federal farming support programs that encourage food production for regional markets.
Entire food supply chains are poised to emerge that are made up of farms and other firms that share a commitment to sustainability and local economic development. Improving the regional organization of food flow, if it is based on an understanding of the relationships that create system constraints in regional food movements, will allow private sector entrepreneurs to seize opportunities to optimize fuel use without sacrificing food access or sustainable farming practices. First mile, OTR regional, and last mile transportation businesses; product aggregation intended for regional wholesale markets; and regional supply chain aggregation in megaregions are just a few opportunities that could improve the climate for small business development in food production and retailing. Business investment in multi-firm collaboration puts innovative entrepreneurs in the lead as primary investors in developing societal assets. Midsize farms that aggregate products for shipment currently practice multi-firm collaboration. Forward-thinking businesses, with encouragement from the public sector, could organize and support similar efforts within regional food supply chains to improve collaboration between shippers, trucking firms and wholesale buyers. Given the unique nature of food in a healthy society, improving the organization of the food supply chain so that it meets public goals is a civic responsibility.