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The perfect partnership. Small supplier makes a big difference for Cargill Foods Argentina.

May 22, 2014

Patricio MacMullen wanted to grow his business. As president of MacMullen Transportes, a small provider of bulk transport services in Baradero, Argentina, his objective was clear: “We wanted to find a company with whom to develop our idea in terms of logistics and to express our mission of developing a highly reliable logistics service in food-grade flour.”

In seeking the right partner, a strong level of mutual trust and the willingness to “give and take” in the relationship were key factors for MacMullen. “This is really important to achieve and maintain high levels of quality and operation,” he said.

That’s where Cargill came in. Cargill Foods Argentina delivers about 3,800 bulk tons of wheat flour per month to its customers. Since 2006, MacMullen had been offering some services to Cargill, which at the time was highly dependent on another larger supplier. In 2011, Cargill decided to invest in the development of MacMullen – and the partnership Mr. MacMullen was seeking to spur his company’s growth was born.

“Partnering with Cargill has created results for both parties,” said Mr. MacMullen. “Due to the joint effort, we’ve increased our fleet from three dump trucks in 2010 to eight trucks today offering transport services. Each dump truck has a load capacity of about 29 tons of bulk wheat flour per month, making MacMullen represent 100 percent of the bulk flour loads for Cargill’s industrial customers where they hire transport services,” he said.

Mutual benefits

Cargill has benefitted as well.

“Our investment in MacMullen has helped us improve customer service significantly,” said Juan Manuel Reyna, logistics coordinator for industrial customers, Cargill Food Argentina. “One part of that is due to having more trucks making deliveries. However, we were delighted by how well our daily joint work with the MacMullen team was carried out. We developed a very close communication between our companies, and that resulted in more reliable results for our own customers,” Reyna. “This included minimizing differences between requested delivery dates and actual delivery dates, which helped build our customer relationships.”

Alejandro Bravo, who at the time was the industrial commercial manager for Cargill Foods Argentina, echoed that sentiment.

“The MacMullen project placed Cargill at a level of excellence in customer service, simplifying our daily work, and keeping our leadership position in the industrial segment,” he said.

According to Bravo, the results of the business’s annual “Relative Value Position” customer survey illustrated the improvement in the general service rating as well as the delivery date/time and general condition of the trucks from one year to the next.

Bravo added that the improvement was so significant that three years ago, one of Cargill’s key customers decided to hire MacMullen for part of its product delivery from the Cargill plant. This practice is still in place.

An innovative solution

Just how did Cargill go about directly contributing to MacMullen’s development? The tool was a financing mechanism that allowed MacMullen to increase its assets. Created in 2011 as a capital and work volume agreement, the tool proved to be mutually beneficial and was replicated in 2013.

“This consists of an ‘advance freight purchase,’” said Laura Elia, senior business development analyst, Cargill Foods Argentina.

“Taking freight as a reference, we turn the advance purchase amount into volume to be transported. During the validity of the agreement, the carrier returns the volume monthly, corresponding to the actual rate for the current month. The advance amount paid is updated according to the increase in rates. We considered it a very good alternative since it allows suppliers’ development and makes smart use of Cargill’s money,” said Elia.

Partner of Choice

“Trusting Cargill has brought tangible results for us,” said Patricio MacMullen. “Of course we’ve had challenges along the way, but the key to overcoming them has been listening, trusting and supporting each other.”