J&J Snack Foods has fully outsourced its logistics management to NFI, CFO Ken Plunk said during a Q4 earnings call.
Over the course of the fiscal year, the company's executives have consistently remarked on YoY increases in distribution costs and their effects on margins. In Q2, executives attributed the increases to higher truck driver wages and rising costs for carriers, storage and fuel.
The combination of factors led the company to pay between $28 million and $30 million more in distribution over the course of the year — but Plunk expects those costs to temper next year.
"I don't expect it to all of a sudden go down a huge number unless we get the benefit of fuel prices coming down," he said. "But I don't expect to have a repeat of what happened last year."
The company has sought to mitigate distribution costs in several ways this year: Plunk also talked about centralizing facilities for Dippin’ Dots and the ERP implementation from earlier this year as a few tactics.
When asked on Tuesday how managed logistics would help with costs, Plunk said he expects the move will generate between $2 million and $4 million worth of improvements as NFI helps "better manage for truckload, mileage and that sort of thing."
Edwin Lopez contributed to this story
