Why wine businesses working hand in hand with their logistics partner will grow the fastest, says JF Hillebrand’s Marc Graham
By Richard Siddle
When Marc Graham, UK branch manager at JF Hillebrand, took the stage at last November’s World Bulk Wine Exhibition you might have thought he was there to represent a marriage guidance agency than arguably the world’s biggest strategic logistics and shipping company for the wine industry.
For much of his talk revolved around the need for buyers and sellers of bulk wine around the world to spend more time working on building meaningful relationships rather than look for quick wins and forgetting about the meaning of a long term partnerships.
He was very much on the same form when VINEX caught up with him recently in London. Time and again our conversation came back to what he saw as the solid foundation of a trusted partnership between producers, distributors and their end customers. Get that right then so much of the added value benefits of working with the right logistics partner can be really harnessed was his key message.
“Who companies partner with is becoming so much more important,” he stressed.
The competition in the bulk wine market has also made the sector even more sophisticated, claimed Graham. Customers will now factor in every individual cost element, at each point in the supply chain, down to how far the wine has to be moved, in bulk, to the final bottling destination in the end market.
Shipping better
Key savings are also now being made in how bulk wine is being shipped around the world with transshipments and feeder routings gaining popularity.
Graham explained: “Three or four years ago it was much more about direct shipping deals, where the wine sat on only on ship all the way through its journey.
"Now more customers are exploring transshipment and feeder routings as there are potential savings to be made which are ‘traded-off’ against the risk in the subsequent vessel / feeder connections not being made."
Even though it might add another week or two to the overall shipment lead-time it is a delay more customers are willing to take if it shaves some more cost off the bottom line. Particularly now in a climate where grape prices are going up and there is less wine to ship.
"Take the UK, for instance, where we are seeing more demand for feeder services into the North West and North East despite the additional lead-time and potential risk of delay if the connection in Europe is not made," he added.
The savings continue when the wine arrives in market. “We rail around 85% of bulk wine inland that is rail compatible," said Graham. It has meant taking far more lorries off the road, and making both fuel and environmental savings along the way. “It is also about staging the product closer to the delivery point to provide further flexibility for the bottler when calling the product in,” he said.
“We transitioned to rail from road from about 2010 onwards. It also means there are no traffic delays and you are pretty much guaranteed to run.”
More expertise
We might know JF Hillebrand for its ability to ship wine and other beverages around the world, but its logistics skills also go in to other sectors, particularly with its purchase in 2007 of Trans Ocean Distribution, specialists in flexi-tank manufacturing and bulk liquid logistics. It is their expertise in handling all sorts of non-hazardous bulk liquids, like olive oils and fruit juices, that Hillebrand hopes to be able to use to provide an even more all round improved service to its wine and drinks customers.
JF Hillebrand, for example, has a range of different sized flexitanks that can potentially offer new solutions for wine distributors and importers. Particularly in moving more premium wines in bulk containers.
“We are seeing more demand for smaller sized flexitanks down to 13,000Ltrs which allows the shipper to potentially ship smaller amounts of more premium wines where demand does not warrant a standard 24,000 Ltr shipment,” said Graham.
It is something New Zealand producers are said to be looking at more closely.
Another area Trans Ocean is developing is a 40’ Flexi-tank to be shipped in temperature controlled units - known as Reefers - used predominantly for fruit juice shipments where product stability and temperature control is key. “This could easily be adopted and used for wine to keep a more premium product stable and temperature controlled,” said Graham.
“We are looking at other markets and what implications there might be for wine,” he added. “Gone is the day of simply moving Box A to destination B. It is how we can add value along the way.”
Real time decision making
That might mean providing all those in the supply chain online, live access to where that shipment is at any time. Allowing them to make better planning decisions about when it is going to arrive. “Track and trace is far more important now,” he said. “We have the ability to offer a complete supply chain solution.” All supported with a lot “more layered information going back and forth”.
Ultimately Hillebrand is there to help companies “plan and prepare better,” claimed Graham. To give them all the information they need "so they have full visibiility of their supply chain from origin to shelf". Which brings us right back to the idea of forging closer partnerships rather than being seen just as a logistics provider.
“Giving customers more visibility about where the products are at any given time means we are able to work much more in a partnership, rather than it being seen as a simple transaction,” he explained.
“It means our customers have access to far more information than they may previously had before. We also have experience in listening to our customers and being able to provide them with the required information and data to support their business activities etc – be it lead-time analysis for their product master-data, on-time delivery performance, order to ready analysis - to name a few."
Opening up new markets
With less wine to go around in 2018 due to the poor 2017 global harvests it means the likes of Hillebrand are having to work much more in countries that have been on the outside of the mainstream wine industry. Which presents new challenges and opportunities, admitted Graham.
“We have to look ahead at which wine origins are most likely to prosper from the global wine supply shortage. It’s a case of always looking to stay ahead of the market.”
"JF Hillebrand has the local knowledge and network on a global scale to support customers with their potentially new suppliers and routes for their bulk wine.”
Although there has been huge growth in the bulk wine market there is still need for the trade as a whole be to be made more aware of the full range of services a business like Hillebrand can offer.
Graham said a key part of his role in the UK is to be constantly talking to existing and potential new customers, inviting them down to visit the port or the rail terminals so that they can see for themselves how the whole process works.
"Why it potentially takes, for example, so long to unload their container(s) from the vessel - especially now vessels are getting larger with some having the capacity to carry up to 22,000 TEU," he explained.
“Until you stand by a vessel in a port you can’t put into perspective what you are working with. We are always looking to help and provide that support. It’s all about being seeing the bigger picture of how the whole supply chain process works.”
Working with those wine businesses, retailers, distributors and importers who can see that bigger picture is where its own growth opportunities will come from, said Graham.