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J&J Snack Foods has fully outsourced its logistics management to NFI, CFO Ken Plunk said during a fourth-quarter earnings conference call.
Throughout the fiscal year, the company’s executives have consistently pointed to year-over-year increases in selling expenses and the impact on margins. In the second quarter, executives attributed the increases to higher truck driver wages and rising trucking, storage and fuel costs.
The combination of factors resulted in the company paying between $28 million and $30 million more for distribution during the year — but Plunk expects those costs to moderate next year.
“I don’t expect it to suddenly become a big number unless we take advantage of falling fuel prices,” he said. “But I don’t expect what happened last year to be repeated.”
The company has attempted to reduce distribution costs in several ways this year: Plunk also talked about centralizing facilities for Dippin’ Dots and the ERP implementation earlier this year as some tactics.
When asked Tuesday how managed logistics would help with costs, Plunk said he expects the move to result in improvements worth between $2 million and $4 million as NFI helps move “truckloads, to better manage kilometers and the like”.
Edwin Lopez contributed to this story