今天,我身处ColdTrack位于新泽西州爱迪生市的冷冻仓库内,与ColdTrack首席运营官Luke Vaccaro进行了一场别开生面的访谈。我们探讨的主题是冷链履约,特别是冷冻和冷藏食品的直接面向消费者(DTC)配送。
冰冷的现实与高效的运作
首先,我们置身于一个容纳约1200个托盘的巨大冷库中,温度维持在-15℃到-5℃之间。这里,ColdTrack接收货物,按批次和保质期分拣,然后进行托盘化储存,遵循先进先出(FIFO)原则。亲身体验了冷库的低温环境后,我们移步到办公室继续对话。
从客户到COO:Luke的履约之路
Luke分享了他从制造业到履约行业的职业转变。他曾就职于亚马逊新鲜食品、Express Scripts和Hungry Root,积累了丰富的经验。有趣的是,他最初是作为Hungry Root的客户与ColdTrack合作,后来ColdTrack收购了Hungry Root使用的冷库,最终他加入了ColdTrack团队,并担任首席运营官。
ColdTrack:专注DTC冷链履约
ColdTrack的核心业务是为直接面向消费者的品牌提供冷链履约服务,主要客户是销售食品和宠物食品的品牌。我们的服务涵盖货物接收、储存、拣选、包装以及运输策略制定。我们致力于以具有竞争力的成本提供世界一流的质量。
技术赋能:精准、高效、可追溯
为了实现这一目标,我们大力投资技术。我们的运营管理系统(OMS)和仓库管理系统(WMS)等先进软件,最大限度地减少人为错误,并确保从产品接收至客户手中全程可追溯。 这在食品冷链中至关重要,可以快速有效地应对产品召回等突发事件。
战略布局与快速配送:48小时覆盖99.1%的美国市场
为了确保快速配送,我们战略性地布局了三个仓库:新泽西州爱迪生市、印第安纳波利斯和加利福尼亚州。通过控制中程运输,我们能够将99.1%的美国地区包裹在48小时内送达。 这得益于我们对运输路线和方式的优化,例如使用冷冻专线运输,减少转运次数,提高效率。
干冰的学问:安全与成本的平衡
在冷冻食品运输中,干冰至关重要。我们严格控制干冰的周转率,并采用安全措施保护客户,例如使用防护包装,避免干冰直接接触产品。我们甚至根据目的地温度和产品特性来优化干冰用量,以降低成本并确保产品质量。
ColdTrack Live:智能优化,提升效率
ColdTrack Live平台是我们自主研发的软件系统,它能够智能地优化干冰用量、包装选择、配送站点以及运输方式。该系统能够根据订单内容、目的地温度和运输时间等因素,自动选择最优方案,最大限度地降低成本并提高效率。 它还具备智能装箱功能,能够根据产品体积和数量,选择最合适的包装方式。
DTC品牌的挑战与ColdTrack的解决方案
我们了解到,DTC品牌面临着许多挑战,例如客户获取成本高、每箱毛利率低以及客户留存率低。ColdTrack通过提供高质量的冷链履约服务,帮助品牌克服这些挑战。我们通过优化包装、干冰用量和运输方式来降低成本,并提高服务水平,从而提高客户满意度和留存率。
未来展望:规模化、智能化、便捷化
ColdTrack未来的发展方向是:继续扩大规模,进一步优化我们的软件系统,例如开发“优化引擎2.0”,以处理更复杂的场景;简化客户的加入流程;并提供更便捷的自助服务工具,例如自建标签和装箱单生成工具,以满足不同客户的需求。
总而言之,ColdTrack致力于成为冷链履约领域的领导者,通过技术创新和战略布局,为DTC品牌提供高效、可靠、高质量的服务。
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The New Warehouse podcast hosted by Kevin Lawton is your source for insights and ideas from the distribution, transportation, and logistics industry. A new episode every Monday morning brings you the latest from industry experts and thought leaders. And now, here's Kevin.
Hey guys, it's Kevin with the New Warehouse Podcast and I'm here on site at Cold Track and today I'm going to be chilling with my friends at Cold Track. Luke Ficarro, the COO of Cold Track is going to be joining me here and we're going to be talking all things Cold Track. We're going to be talking frozen, refrigerated fulfillment, but right now we're in the freezer. So Luke, tell us a little bit about where we're standing right now.
Absolutely. Well, first of all, Kevin, welcome to our freezer. Thank you. Thank you. Sitting in this vast freezer here, stores about 1,200 pallets. Typical temps range from negative 15 to negative 5, about where we like to keep it. Prior to coming into the freezer, we typically receive out on the dock, separate product by lot and expiration, palletize it, bring it in here and store things as pallet in separate lots to maintain what we call FIFO, which is
first expired first out all right and definitely very cold in here they have not warmed it up at all for me to visit here i will say so we are freezing right now but it's great to see the freezer itself feel the freezer and understand exactly what happens within the facility here but it's definitely cold in here so we're gonna take it back up to the office to continue the conversation and find out
how ColdTrack delivers for their customers. All right, so we're back from the freezer and we're in the office defrosting a little bit, me and Luke here. So Luke, why don't we kind of kick off our conversation here? Because you have a bit of an interesting story with how you ended up with ColdTrack. So tell us a little bit about your background and maybe how you ended up here as the COO.
Sure. I'm not going too far back. I was more, you know, manufacturing guy, you know, come by roots in engineering quality and ultimately ran a bunch of manufacturing facilities. And then some point around 2014, I kind of pivoted into fulfillment, joined Amazon Fresh as they were looking to ramp up warehouses across the country or fulfillment centers, as we say. And did that for a few years, ran operations at Express Scripts for a little while after that.
And then ultimately moved over to what was my job prior to here, Coal Track, working for Hungry Root. Okay. Hungry Root is a AI-powered grocery delivery service. Yeah. And had great four years there and met the Coal Track folks probably at this point about six years ago. In fact, this site that we're sitting in here right now did East Coast fulfillment for Hungry Root back then.
Oh, God. So you were a customer? I was a customer. And it's really interesting because we used these guys for East Coast fulfillment. We then, about a year into my role at Hungry Root, we moved to this new place out on the West Coast, which at the time was called Stockton Cold Storage. And then about a year and a half, two years after that, what was then called NutraFresh, now ColdTrack, purchased Stockton Cold Storage. Then they became my vendor on the West Coast as well. A couple of years after that, I decided to join the team. Got it. Okay. Yeah.
All right. So from customer now to COO at ColdTrack, and obviously, I think starting out in the freezer, certainly we got a little bit of an idea of what ColdTrack does, right? But tell us kind of brief overview of ColdTrack and what are your services and what do you really focus on? Our core market, right, is DTC brands, folks that are ultimately providing some
Typically food products delivered to consumer homes, right? Okay. Leverage our services to one, just sort of receive and store their goods as well as, you know, pick and pack individual customer boxes that are going to their own consumer.
And then if you take it a step further, we develop and execute against shipping strategies for them. So a lot of folks that come to us, they come to us with candidly pretty high ship rates with the typical parcel carriers. Maybe they're shipping out of just one location. We are able to offer them a much broader footprint, increase their one-day transit quite a bit. And a variety of strategies are able to deliver their goods at a much lower cost than they could on their own. And I think that's great because...
I mean, it's certainly expensive to ship that way. But I guess tell us a little bit about because we see some of the challenges. We started in the freezer here. So that's one challenge. It's cold to operate in to begin with. But there's additional challenges around the shipping and things like that. And we'll touch on that a little bit. But tell us a little bit about why tackle this challenging fulfillment?
Right. I mean, I mean, fulfilling ambient easy. Right. I mean, I won't say easy. I won't downplay it, but, you know, easier than than this situation and dealing with, you know, obviously colder temperatures and, you know, more sensitive products and things like that. So so tell us why ColdTrack wants to tackle this this challenge. I would say for a couple of reasons. Right. One is, I mean, it's growing market. Right. You know, DTC. Right.
Brands have really blown up over the years, particularly like post-COVID. But in addition to that, right, like you said, it is not that picking and packing and storing for some food is the hardest thing to do in the world, but it is, there are a lot of details around it that allow us to sort of differentiate ourselves, right? Okay. You know, you talk about food, people are very sensitive about their food, what they're feeding their children themselves, or they're, in our case, you know, we have actually have a lot of dog food clients. You know, the ability to demonstrate incredible
accuracy, right? Whether that's pick accuracy or inventory accuracy, the ability to ensure the cold chain is maintained from receipt of goods all the way to the customer's doorstep, right? Once again, it's not the hardest thing to do in the world, but it's
do it consistently at a very high quality level at a competitive cost is not easy, right? And that's where we like to play, right? We've invested a lot into technology, whether that's on the front end with our OMS system, whether that's in various connections to shipping and car platforms or internally our WMS system. We've invested millions and it's all with the goal of getting to just world-class quality.
I don't know, world class sounds like a bit of a cliche, but, you know, we're just trying to be the best in the industry, right? And to do that, you need great technology, you need good leadership. We're on sort of a great path. Yeah, I mean, I think that's interesting, definitely. And I definitely agree. I mean, to get to that level, and especially if you're focusing on the D2C aspect of it, you do need that tech.
technology to be able to accomplish what needs to be done, not only with the requirements of frozen refrigerated goods, but then also from the consumer expectation too, when they're expecting to get those things and how they're expecting to get them delivered. So tell us a little bit more about the technology aspect of it, because I think kind of dove more into this space. I find that
The frozen, refrigerated space is very, in a lot of cases, old school, I guess we could say, right? There's a lot of, you know, mom and pop, family owned company. We guys done things the same way for 30, 40 years. So tell us a little bit about the, you know, how bringing technology into it is helping to make that difference.
You're spot on, right? I mean, I remember coming from, you know, my Amazon Fresh days or my first day at Hunger Root, walking the floor and seeing people with a piece of paper, you know, paying. Yeah. Right. It was a bit of a step back for me. And I was really excited to introduce a lot of things I learned over the years and introduce technology to the process. And that is, once again, a way that we can differentiate ourselves because there is a lot of, you know, there are a lot of mom and pop shops out there, even folks that do have some basic technology. It's just not as, I don't know the right word, as sophisticated or unbiased.
granular, if you will, in terms of its ability to track and error-proof. Yeah. Right? So if you think about the software that we have, right, it really serves to, one, ensure that we absolutely minimize human error at every stage of the process, right? But it also is there to ensure that we have great traceability from when it comes to
into our dock doors to when it gets to a customer's home, right? Because as you know, you know, more and more people care about, you know, where did this food come from? If there happens to be a recall, right? We want to be able to identify the exact lot that was in that customer's box so that we can, you know, not have to cast a super wide net when we're
identifying where there might be product that we need to either recall or alert customers that there might be an issue. The technology helps us do both, right? One, error-proof, and two, have great traceability from end to end.
Yeah, and I think that's so important because at its core, right, I mean, certainly, you know, whether it's ambient, refrigerated, that error-proofing is critical, I think, to moving an operation to the next level, right, or world-class, as you said. But then there's that added layer where you're dealing with food, you're dealing with things that people are going to be eating.
or, you know, what people, in some cases, you know, love more than anything. Their pets, too, are consuming as well. Love their pet. Yeah, I love my pet. I don't have any pets right now. I got an 11-year-old son. He's enough for me. That's enough. Yeah.
But obviously I care about what he's consuming too. But, you know, that consumer, right, they want to know what's happening. And, you know, we see those things that happen with food and that traceability becomes so critical, right? So tell us a little bit more about that and how, you know, maybe if something does happen, like how does your technology change?
enable you to be able to pinpoint those things and make sure that the consumer is safe? Absolutely. I mean, I think it starts with essentially having control of the product from end to end, right? So what I mean by that is, you know, truck gets unloaded, we receive it, we are identifying the lots, we're separating lots into separate pallets, right? We are receiving the goods in ways that are
Right.
We completely eliminate human error, right? It's assuming that the barcode is correct and that their vendor has delivered us accurately, right? I mean, we're simply just scanning the GS-128 barcode and we're pulling off, you know, production dates, expiration dates. And in some cases, the actual GTIN that will tell you not only, you know, because some of our customers will dual source GTINs.
certain items, right? So it'll tell you which one of their vendors shipped it. And in some very rare cases, that vendor might have two or three manufacturing plants, each with separated by its own sort of GTIN. GTIN being the sort of identifying part number, if you will. Interesting. Yeah. Yeah. And shout out to our friend at GS1. We've had them on our podcast. He's all right, sir. They're right here in New Jersey, down in
doing, right? So very interesting. I think that tracking, that traceability becomes so critical and it's great to hear that you guys are making that investment in technology to make that even more robust and better, not only for the consumer at the end of the day, but then also for those brands that are trying to...
give the best consumer experience to the consumer themselves. So we talked a little bit about kind of the challenges on the fulfillment side, the movement of the material and, you know, what you're doing behind the scenes to make that happen and the technology you're applying to that. But when it comes to, you know, refrigerated or frozen goods, the other challenge then is the delivery. So you guys, I see you say that you have 99.1%
of the U.S. you can reach within 48 hours, right? So tell us a little bit about, I guess, what does that mean first? And then how do you achieve that? Well, what it means is from when a package leaves our facility and is sort of out of the cold chain, if you will, I shouldn't say out of the cold chain, it's still within the cold chain, but out of a temperature controlled environment, right? We will get to the customer's doorstep within 48 hours.
How do you do that? It kind of starts with having the right footprint. I would argue that we have, for what we do, we have essentially the three. I'm not going to say down to plus or minus 10 miles, but we're pretty close to having the perfect three-site footprint, covering the Northeast through New Jersey, having Indy cover the Midwest, Southeast, and then Northern California, where we have our Patterson Stockton sites. That sets you up for success.
And then in addition to that, if you layer on frozen line hauls where we instead of, say, having FedEx pick up an Indy, right, and sorting a package in their Indy facility, then sending out a middle mile line haul down to their Dallas hub, then sorting it again and then, you know, out on another set of trucks to a branch and then sorting again out to a final mile delivery truck. We are skipping a big step in there.
Right. And we're loading the packages onto a frozen line haul such that it stays. OK, it stays frozen until it gets injected into their Dallas facility. Right. So we're taking a full out, you know, sort of 24 hours there. We're controlling it. We're making sure that it's just one less opportunity for error, less opportunity for them to make a sort error in there.
Any sort of, not that they do that all that much, but, you know, we could control it. What could happen, though, is if they get really busy, maybe, you know, the truck that typically, you know, departs gets filled up and, you know, we miss that particular middle mile delivery. When we control the middle mile, at least the better outcomes. Carriers tend to be amazing.
at delivering within one day from their sort of regional hubs, if you will. Right? So if you can inject in those regional hubs, you just have a much better chance of success. Got it. And your entire delivery just goes up significantly. Yeah. Yeah, absolutely. And I think that's great to hear. And I love the...
the strategy that you've been able to figure out to accomplish that and, you know, really enabling, like you mentioned, those regional carriers to be successful within their region, essentially, right? And being able to do that. And I love how you thought too about, you know, eliminating the potential for error in those handoffs, right? So essentially reducing the number of handoffs, which reduces, you know, the chance for error, right? And even though, you know, when it
kind of leaves the building, right? You lose some control of what's happening. You guys, it sounds like you're still kind of from a list strategy where you do maintain some of that control to make sure it delivers when it needs to deliver. So tell us too, because I would say I learned a new term today. I should have known this, I think.
TNT, right? TNT? Yes. Yeah, TNT. We're not talking about dynamite. Yeah, tell us about TNT and I guess why is it so critical to be within that 48-hour window? Absolutely. Yeah, so TNT, time in transit, is the term. Generally speaking, right, if you're in the perishable shipping business as a brand, like the rule of thumb is you only want things to be out of a controlled temp zone for less than 24 hours, ideally, but definitely within 48 hours.
Right. Depends on what you're shipping. Right. If you're shipping things that don't need to be full frozen all the way, some customers will be open to three days to just increase their ground footprint. Right. But typically it's two days. The reason for that is, you know, we for frozen orders, we typically ship with dry ice, dry ice supplements over time. Right. So we'll tip a typical two day pack. We'll have 10 pounds of dry ice and it will supplement on the way.
Keeping something full frozen for three days is pretty difficult. Since we try, we have a constructive footprint that allows us to get the 99% of the country in two days. For that extra 1%, we go air. Got it. Okay. Yeah, and then the dry ice, too, becomes very, very critical, right, for that shipment. So tell us a little bit about that.
utilizing dry ice or special packaging for your customers to make sure that you maintain the integrity of that product? Dry ice is critical to the overall frozen food fulfillment sheet, right? And to ensure that you get the desired outcome, you got to be careful about a few things. Number one, you got to have good turns on your ice, right? The ice sublimates over time. So you want to make sure that it's not sitting in your facility for more than a day or two before it actually gets into a customer box and begins its journey to the customer.
Right. Number two, you just have to have good procedures around that, keeping the ice closed in those blue containers that you saw out there for as long as possible. Right. Once it gets into the box, most of our customers are really smart in that they want to protect the customer from the dry ice. Right.
because it can be a little dangerous if you were to grab just a piece of, you know, five pound brick and try ice. Pretty dangerous. So a lot of times we'll be putting protective covering around the ice. Could be like a full box with some holes punched into it. Could be, you know, we call it an ice pad. But we generally, you know, want to keep the customers safe from that. Gotcha. Okay. Yeah, and that makes a lot of sense. And it's great that you understand the, I guess, almost chemistry in a sense and the right mix and how to get that not only to the customer to be able to, you know,
deliver with an integrity of the product, but then also to protect them, like you mentioned, which is also important as well. So, so very interesting there. So, so we know that you guys do fulfillment, right? For, for e-commerce DTC, we know that you're, you know, have this special setup within the network. Tell us a little bit about what else, what other services do you offer as ColdTrack?
Absolutely. Yeah, no. So, I mean, we have a software platform that we are very proud of and we call ColdTrack Live. And one of the things, getting back to sort of ice conversation, right, that I did mention is one of the things we provide is the ability to optimize the amount of ice that goes into a given package, right, which is really critical for maintaining your costs. As an example, we can go out and call on an API, you know, and figure out the temperature of the destination zip.
Right. And adjust the amount of ice we put in based on the destination temperature. We can base it on that plus some combination of that and TNT, some combination of TNT, destination temperature and the amount of order contents. Right. Typically, you know, if you have a box with a fair amount of air in it, it's going to thaw quicker than if it has, you know, a critical mass of already frozen items, which almost act as ice packs to each other, if that makes sense. Yeah. Yeah.
Right. So there's a bit of science that goes into that. And we have what we call our optimization engine that does a variety of things. Right. It takes the order contents in from the customer, usually transferred over some standard API. It could be with a Shopify cart or with a customer's homegrown system that connects to us via a custom API. Right. But we take in their order contents, what we call cartonize the order, which means we figure out what's the most efficient way to pack it. Right. That a customer will typically have anywhere from like
two to six box sizes with us. Some of them have varying liner thicknesses to deal with, you know, wintertime versus summertime, right? We usually call them summer liners, winter liners, right? The winter ones, of course, being a bit thinner, right? So our system's kind of intelligent enough to kind of take all those options into account
Once again, based on the order contents you're going to put in the box, based on the temperature, where it's going, figure out what's the right combination of liner and box size that
that it goes into. And if it needs to go into more than one box, it will do that as well, right? So if you're large, if you have four box sizes, your largest one is an XL box and it can only fit, I don't know, 4,000 cubic inches of product, right? And somebody places an order with 6,000 cubic inches of product is smart enough to say, okay, you're going to want either, you know, two large boxes or one XL and one small. And that's a cartonization process, right? Yeah.
along with the colonization is sort of the ice determination, right? How much dry ice or coolant do you need? And by the way, we talk a lot about dry ice, but we do have some customers that actually like to do a combination of gel packs and dry ice, right? Or when it's really cold out,
they can get away with just gel packs, right? And they can avoid dry ice. Not a lot of that, but there's a few. We have to be really flexible in our technology. It's something I learned when I gave you your idea. I was surprised by like how complicated some of the things are. I'm like, we do all this at Hunger Roots. You know, why is it so complicated? Well, you know, if you're selling for one customer, it's one thing, right? They all have so much in common. They seem to always have like one or two things that they either want done a little bit differently. Generally for good reason, right? It's not like they're
being difficult. It's just that they have a unique set of needs. We need to solve them, right? So yeah, solve for them, I should say. So we're talking about optimization. So, you know, we solve for the ice. We determine, you know, it's a multi-site footprint. What site is the best site to fulfill the order out of, right?
So there's an element of like, what's the cheapest delivery cost, but also, you know, being inventory aware, where do we have enough goods to actually service the order from? And then, you know, once you figure out your site, what's the best carrier service? I just need to go, you know, is it in Billings, Montana? And even though, you know, we have a site in California, it's still going to be a three day TNT. Okay. Well, we got to upgrade to air. Well,
Well, if it's air, what's the best way to ship it? Is it two-day air? Is it standard overnight? Is standard overnight even eligible for that zip? Because it's a really rural zip, right? Or does it need to go priority overnight? All these things kind of play into it. And then you layer in the fact that we don't necessarily pack every single day for every single customer. And we don't launch every single line haul and carrier every single day. There's a lot of complexity in there that our software does all the thinking for us, right? Because it's a little bit too much for a human to process for that.
in a split second, right? So a lot of really smart algorithms were going on in the background that help us ensure success. Yeah, it sounds like it. And definitely...
I mean, there's a lot of complexity there. So tell us a little bit about that Coltrac Live that you mentioned. I imagine that some of these e-commerce brands that start out and they're doing something that's refrigerated, frozen, they probably don't necessarily have a full handle on all those complexities that go around that. And all these things too, if we look at this type of shipment versus an ambient shipment, there's obviously a lot more
involved in, you know, whether it's dry ice, gel packs, additional maybe insulated packaging, the transportation too, I'm sure a little more cost as well. So how does when a brand comes to work with you, I mean, how are you able to leverage that cold track live to really help them optimize those costs and then also like the service level that they can deliver to their customer? Yeah.
Yeah, absolutely. I mean, it really starts during the sales process, right? We're very fortunate to have a very strong sales team, not just in their ability to sell, right, but in their ability to really understand what our capabilities are and generally what customers are probably going to want from us, right? And they're also great at just pulling folks like me and some of the folks on my team in, you know, if there needs to be, like, further consultation, whether that's on, you know, packaging, whether that's on how they should set up their networks,
There's a fair amount. This is not a very transactional sale. There's a fair amount of consultation involved up front. And then once we ultimately decide to work together, there's another set of discovery on the tech side, which, candidly, it's a pretty tough thing to staff for because it's hard to find people that
understand the tech, understand the cold chain aspect of things, and that could kind of piece it all together for a customer. But we're very fortunate. We have some really strong talent on the team, and we're able to provide those solutions for them. Yeah, absolutely. And I think that's great. It is a unique kind of mix of
skills and knowledge, I think, to really optimize that and bring that to the table. And it's great to hear that you have that on the team here. So now if we look at brands that are in this space and, you know, from an e-commerce DTC perspective specifically,
What do you think are some of the biggest challenges that they're facing right now? Sure. I think coming from a brand, right, I can tell you that it's funny how, you know, when you talk to fellow ops folks, right, we all kind of have a lot of similar challenges, right? Yeah. And you talk to DTC brands, they all have a lot of similar challenges. I always will say, like, DTC comes down to, like, a few numbers, right? You know, one is your cost to acquire a customer, right? Two is kind of like...
the gross margin you made per box. Right. Right. And then three is your ability to retain that, that customer, particularly most of the people we're dealing with, right. Our subscription type services. Right. So, you know, I go, it costs me however, however many, you know, $50, a hundred dollars, $200 to acquire that customer. Okay. Are they going to order,
you know, two boxes of food for me, or are they going to order 10 boxes for me? Of course that matters, right? And that essentially establishes your ROI. If you think about those three numbers, you know, they're influenced by, you know, a few things, right? Acquisition's tough, right? Particularly, you know, one of the great things about social media and, you know, Facebook, Instagram is it allows small businesses to have a presence.
immediately, right? And acquire a customer base. What gets challenging, right, is that those apps are amazing at targeting people that have a high propensity to want your product, right? Problem is, is as you grow and scale and scale, it gets harder and harder to find those. There's less and less of those sort of perfectly targeted customers that are willing to spend a premium on dog food, right? And being able to attract customers
more and more becomes difficult. So the opposition side gets hard. The other thing I would tell you is that there is a certain amount of what I will always call semi-fixed costs associated with shipping a box to someone, right? Like, you know, there's going to be a shipping fee, there's going to be a fulfillment fee,
There's the coolant itself. There's the packaging itself and the insulation. I used to always say, you know, on my days, it's like, listen, whether I'm shipping you $60 worth of food or $200 worth of food, that semi-fixed cost doesn't – it gets more expensive, right? But that's not – if it's $60 worth of food versus, say, $180, right? Right.
all that semi-fixed cost isn't 3x, right? It's maybe 20% more, 30% more, right? So there's a lot of scale advantages to shipping larger amounts of product to folks. I think that's one thing that all these folks
folks are trying to do, right, is get that sort of average order value up, okay, to get that sort of gross margin per order up. But you don't want to go too high because it's hard to acquire customers, right? It's hard to get somebody to sign up for a box that costs $150 a week, right? So finding that balance is tough and then it gets down to retention, right? And that's part of where we help, right, is
You know, if they get their box on time, if it's fresh, it's not spoiled. Right. They have a much higher propensity to reorder with you. You know, we have a lot of customers. I mean, they're all right looking to get that that retention rate up. And they look to us to be perfect. Right. Yeah. Or as close to perfect as we can be. Yeah. I think that's a great, great point there. Right. I mean, is that.
The core of it, the brand is, they're trying to figure out how can they acquire the customers? How can they get it out there from marketing, sales perspective? How can they figure out the right product that customers want, but they'll also be able to make money off of? And at the end of it is the retention that you mentioned, which becomes so critical from a fulfillment perspective. So having the right fulfillment
partner becomes so critical and not only in being able to deliver on, you know, marketing and the brand's promise to the customer, but then also making sure that retention is there. You know, when you're dealing with frozen or refrigerated, you
You know, if you ship like a piece of meat to somebody and it shows up and it's, you know, all thawed out and everything, the consumer is going to be like, I don't know if this is good, right? Or if I should touch this. And then they have a bad taste in their mouth, I guess, literally, maybe. Bad taste with that brand, right? And they may not come back to that brand. So that's a great point of the role that you play on the retention side as well. I think that's very, very critical there.
So, you know, we've heard about the kind of complexity of the challenges within the cold chain and how ColdTrack is addressing them. We felt the cold actually here. You probably lasted longer in that freezer than almost any customer or visitor. Okay.
Okay. All right. I'm happy we got that on camera. For the record, right? So, you know, tell us a little bit more about the facility here where we're at in Edison, New Jersey, and tell us a little bit about the network that you have, the other facilities, and also the newest facility, which is in Indianapolis, right? If you think about Edison here, right, firstly, it's what we call a tri-temp facility, right? So we have frozen storage, refrigerated storage facilities.
And we have ambient storage. Believe it or not, we have the storage needs of our customers. We think of it as, hey, we're shipping food. But the amount of space that the ambient sort of packaging takes up is tremendous. Right. So these insulated liners, we're receiving double stacked, full truckloads of these, you know, all week long. Right. They take up a tremendous amount of space. There's a lot of, you know, kind of even for smaller customers, there's big minimums.
Right. You want to buy full truckload at a time and keep your costs down. So we have about, you know, 35,000 square feet just of storing packaging up to the ceiling. Right. It's a big need. Right. When we're looking at new buildings. Right. It's important to have the right amount of space in each zone because you could sort of quote unquote bottleneck at any one of those zones. Right. If you don't have refrigerated space to pick and pack the customers or to store the little bit of refrigerator that they have. Right.
Right. You're going to bottleneck their frozen obvious right. You need a certain amount of frozen positions to solve for a customer. Most customers have a somewhat consistent, you know, ratio of like storage needs per like box that you pick pack. Some don't. Right. Some just have an enormous amount of SKUs and they don't ship a lot of boxes. Right. So your storage needs.
needs versus the sort of pick pack needs are a little bit different right but we figured it all out and make it work and you know we've gotten pretty good at that over time so getting back to Edison right you know we have have the tri-tab we have about 4,000 pallet frozen pallet positions we can store up to about close to 4,000 ambient positions and then we have enough pick and pack space to you know accommodate you know 50 60,000 boxes a week you know we can go a lot higher than that if we need to but that's kind of our you know I would say our sweet spot
Okay, nice. And then you opened up the new facility in Indianapolis. So tell us a little bit about New Jersey, California. So you had the coast kind of covered, right? But now Indianapolis, tell us, I guess, why Indianapolis and tell us what that does to help your shipping network.
Absolutely, yeah. Indy's a great spot, you know, if you're in the DTC world. My last company, or actually in most companies I've been, you know, where I've been responsible for fulfillment, I've always had a site that was either in Indy or near Indy. Right, okay. It's pretty close to the population centroid of the U.S.,
believe it or not. Some would argue you're better off being a little bit closer to Chicago, particularly if you do a lot of air because there's some air hubs over there. But like for us, where we're primarily shipping ground, it is great. We're within three or four hours of many different regional hubs. And so there's a fair amount of volume that just flat out goes to the Midwest, right? So you get one day there instead of two day coming from Edison, right? But believe it or not, fun ops fact for you, if you didn't know, a lot of people will realize this, but the United States actually, as you go south,
the East Coast really cuts West, right? So when I tell people that like India is almost, and it's not exactly, but almost directly on top of Atlanta, people kind of look at me like I'm crazy. - Yeah, I never thought about that actually, right? - Interesting, yeah, yeah. - Yeah, so India's actually like closer to Florida, Georgia, and all those places than New York. And you know,
It's only a little bit closer, but in a world where it could be the difference of a two-day or a three-day T&T, it's a huge difference, right? FedEx, as an example, leaving from Edison is three-day T&T to most of Florida, right? We have regionals that will get down there quicker, and we have line halls that we send down there. So we solve for it, but with Indy, it's a straight two-day, right? So that little bit, getting to Texas, Texas is a huge market, as you know. Right.
Texas is a lot closer to Indy than it is to, say, Edison. And we can get down there essentially the same day. We can leave in the morning and hit an evening inject from Indy, right? So it makes a big, big difference. Yeah, interesting, interesting. And definitely interesting geography fact there. I never really thought about that. But now I'm like picturing that. I'm good for a couple of those. I don't have a lot. I'm picturing the map in my head. I'm like, oh, I see it. Like, it makes sense. But I never thought about it, right? It was very interesting there. And obviously, you know, it seems that you guys have been
strategic through pretty much everything you're doing, right? How do we, you know, focus on that, that TNT effort to it? And, you know, how do we make sure that the consumer is getting that product in the integrity that they expect, right? And what it should be. So we've kind of covered what you guys are up to, some of the latest with you, but what does the future of ColdTrack look like? What's in store for the future?
Great question. Great question. I mean, I think it's a bit of more of the same and driving scale. Everything we do benefits from scale. When you have more scale, you could have more direct line hauls to various locations, right? I mean, I've learned that my time in Hunger Group, I mean, we grew tremendously. I don't want to share exact numbers, but we grew tremendously. When you're a lot larger, right, you could fill up trucks and say, you know what?
I don't need to have everything picked up from Indy by FedEx, right? I can send a truck to Texas. I can send the truck to, you know, Nashville or Memphis or wherever I might want to do it, North Carolina, Charlotte to Orlando, right? You're able to fill those trucks up and the economics sort of makes sense. So I would just say, while we have excellent scale as it is, it could always be better, right? It's just continuing to bring on more and more customers and show our value and continue to do a great job retaining them is a big part of the plan, right? But I would say in addition to that is,
just continuing to improve our software offering, right? You know, there's a lot of aspects that we talked about, the optimization aspect of things, you know, we're embarking on a project called Optimization 2.0. It's sort of like our next generation optimization. And I don't want to share too much there, but a lot of really interesting things about how we can better optimize packages and deal with sort of more edge cases that get a little crazy and require human intervention, right? Like
Yeah, as an example, if you're a Fulton Fish and you have a customer that wants their product, we're shipping on a Thursday, right? What if it's a two-day T&T and Saturday isn't available, right? Because Saturday isn't available for every zip, but say a FedEx or other resharp, right? So do you want to stop grade or you don't want to stop grade, right? We could send it straight overnight if you'd like, you know, for premium, or we could just wait till Monday or Sunday and ship it then, right? Putting some sort of intelligence into the optimization engine, right, to actually allow
the system to sort of rate shop and base those decisions on preset trade-offs that the customer agrees with you on. Hey, listen, if the cost difference is less than $20, then upgrade it. If it's more than $20, don't upgrade it. Things like that, so we just have less humans involved because these are, it's very sensitive, right? You send a package with a lot of fresh, wonderful fish from Fulton Fish Market and it doesn't get there on time or it goes the wrong method, right? It's a very costly mistake, right? So less
We have humans having to make decisions where there's always an opportunity to, you know, make a typo or, you know, make very legitimate, honest mistake. It's just the better it is, right? Our folks are great. A lot of rigor in everything we do. But, like, we're human, right? We make mistakes like everybody else. So we just want to try and eliminate that. The other thing I would tell you is that trying to make things a bit easier on the sort of onboarding side is a big piece. Because...
We came out with the sort of optimization, 1.0, if you will, that accommodates a lot of customer needs. But over time now, we've realized, wow, the broadness of these customer needs is a bit more than we were willing to kind of develop in core code for. So a lot of how we deal with things right now is through scripts. We have somebody that says, okay, this customer wants these things that the core optimization engine doesn't handle. Okay, we'll write a JavaScript to
kind of handle that, right? We want to kind of build that all to the court code so that the most complex customer we could onboard in like, you know, a few days. I see. As opposed to a few weeks, right? I think that's a big part of it. And then for folks that don't have, that want to kind of ship on their own and
and want to come to us just for more shipping optimization services. And we're really excited. We're building a product that will allow them to generate ship labels on their own, generate packing slips. So we kind of give them the tools to do what they want to do. So we could kind of, you know, if you have an internal operation that just happens to be co-located with something, you don't want to leave it, you want to do it yourself, sure. But here, let us give you the tools.
to successfully do that, right? Interesting. And we're really excited about that. It's, you know, essentially think of it as like a ship station for perishable, right? Interesting. Right. We do almost all of that now, that last little piece of like, hey, you could actually just generate labels on your own. Yeah. Right? It's something we're pretty excited about. And it's actually coming out to the market very soon.
Okay. Very nice. Very exciting, definitely. And I think that's a great tool and a great offering to have, too, for maybe customers that are not ready for you to do the fulfillment and get involved with them a little bit and help them maybe grow a little more. And then maybe they come into your ecosystem or they just stay with your system. I think that's a great way to look at the market and provide additional value beyond just the physical aspect or from the software, too, as well. And we'll definitely be looking forward to that next
optimization 2.0 that you teased a little bit there. So maybe we'll get to update that on that in the podcast in the future. All right. So we learned so much today at ColdTrack. And, you know, if people want to learn more about ColdTrack, what's the best way to do that?
Best way to do it, actually, is just go onto our website, www.coaltrack.com. On the front page there, we have a web form. Fill it out, and we typically get back to folks within an hour or two. All right, great. And we'll definitely put all that information at thenewwarehouse.com as well as in the show notes for this episode, too. So, Luke, thank you very much for having me in. And we can say maybe this is the coolest podcast we've ever done. Love it. It was a pleasure. Definitely. Thank you, sir.
You've been listening to the New Warehouse Podcast with Kevin Lawton. Subscribe and check us out online at thenewwarehouse.com. Enjoyed this episode? Make sure you are subscribed to the podcast and for more content from The New Warehouse, find us on LinkedIn and YouTube. Links to subscribe can be found in the show notes and for everything The New Warehouse, head to thenewwarehouse.com.