CHAPTER VII — DISTRIBUTION 



ABSTRACT 



Of the three principal economic functions in bringing canned tuna to the con- 

 sumer, NAMELY, production, PROCESSING, AND DISTRIBUTION, THE LATTER TAKES A SMALLER 



share of the consumer's dollar than each of the other two. transportation, ware= 

 housing, wholesaling and retailing are the principal sub=funct 1 ons in distribution. 

 There are three principal transportation facilities used to bring canned tuna 



FROM processor TO MARKET, NAMELY, RAILROAD, TRUCK, AND INTERCOASTAL BOAT. THE 

 GREATEST VOLUME OF CANNED TUNA MOVES VIA RAILROAD DESTINED FOR MOST OF THE MAJOR 

 DISTRIBUTION CENTERS IN THE UNITED STATES, CANNED TUNA SHIPMENTS TO LARGE CITIES 

 ON THE WEST COAST ARE HANDLED PREDOMINANTLY BY TRUCK „ A SMALL PERCENTAGE OF CANNED 

 TUNA IS SHIPPED TO ATLANTIC PORTS VIA J NTER=COASTAL BOAT, UTILIZING LOW RATES AND 

 LOM MINIMUM CARLOAD REQUIREMENTS. 



RAILROAD TRANSPORTATION RATES FOR MANY FOOD COMMODITIES INCREASED MORE THAN 

 DID RAILROAD RATES FOR CANNED TUNA IN THE PERIOD 1550 THROUGH )952« !N GENERAL, 



transportation charges for canned tuna from i 950 through 1952 were relatively low, 

 ranging from 0.5 percent of retail value to 3.22 percent of retail val.ue for 

 various types of movements studied. 



Wholesale marketing procedures are being improved with many new methods that 



FOCUS ON AD>AJSTMENTS IN MERCHANDISING POLICIES AND PHYSICAL OPERATIONS. IMPROVE- 

 MENTS HAVE BEEN INITIATED TO CUT COSTS OF TAKING AND ASSEMBLING ORDERS; TO PROVIDE 

 SEPARATE ARRANGEMENTS FOR HANDLING SPECIAL ORDERS; AND TO STRIVE FOR BETTER INTER- 

 GRATION OF PLANT AND WORKER SO THAT JOB TIMING WILL BE THE MOST EFFICIENT. 



WlOLESALERS STOCKING CANNED TUNA HANDLE IT IN AN IDENTICAL MANNER TO HUNDREDS 

 OF OTHER CANNED COMMODITIES. THEREFORE, AN IMPROVEMENT IN THE OVERALL PHYSICAL 

 OPERATION OF WAREHOUSING WILL BE AN IMPROVEMENT IN CANNED TUNA'S WHOLESALE MARKET- 

 ING. 



The MARKED GROWTH OF THE "SUPERMARKET" T>PE GROCER AND CHAIN STORE OPERATIONS 



have forced improvements in retail marketing procedure. efforts have been direct- 

 ed toward improvements in the physical handling of groceries and merchandising 

 research. any cost reducing innovation by retail grocers will be to some degree 

 an improvement in the retailing of canned tuna. 



Wholesale and retail marketing of canned tuna is only a part of ithe overall 

 operation of firms in these fields, the essential problem of wholesaling and 

 retailing is not one that can be resolved in terms of any one particular product. 

 The problem confrcsin-ing both wholesaler and retailer is the general movement of 

 wjmerous products and not just the specific movement of canned tuna. in handling 

 canned tuna wholesalers and retailers appear to have solo this commodity at lower 

 relative margins than canned fish vreus handled. 



Ninety percent of all domestic tuna is packed in the State of California, 

 of which 70 percent is processed by three large concerns. the greatest portion 

 of the pack is sold through food brokers, who receive a three percent commission 

 on the face value of invoices, prices charged are f.o.b. plant, with the trans- 

 portation cost added to the buyer's invoice. most packers sell on a cash basis 

 allowing small discounts for prompt payment of bills. prlfcipal purchasers of 

 canned tuna are wholesalers, re7ail=0wned cooperatives, and chain stores, a 

 notable trend is the increased volume sold to chain stores in post war years. 



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