Dairy delivery case losses in Florida

Material Information

Dairy delivery case losses in Florida costs and controls, a report
Series Title:
Industry report Florida Agricultural Market Research Center
Mathis, Kary, 1936-
Degner, Robert L
Florida Dairy Products Association
Place of Publication:
Gainesville [Fla.]
Florida Agricultural Market Research Center, a part of the Food and Resource Economics Dept., Institute of Food and Agricultural Sciences, University of Florida
Publication Date:
Physical Description:
xi, 87 p. 2 forms, 1 map : ; 28 cm.


Subjects / Keywords:
Dairying -- Costs -- Florida ( lcsh )
Crates -- Costs ( lcsh )
non-fiction ( marcgt )


General Note:
"A research project conducted for the Florida Dairy Products Association, Inc."
FAMRC industry report ;
Statement of Responsibility:
by Kary Mathis and Robert L. Degner.

Record Information

Source Institution:
University of Florida
Holding Location:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
029925277 ( ALEPH )
10809299 ( OCLC )
ACF7028 ( NOTIS )


This item has the following downloads:

Full Text

INDUSTR7Y 71i:T )i1 77-1

r 4

* K n --

;: *- .. K* -

%poc --- (? 0 1- A %j L- TR 0L

Friday, July 21, 2006 (3).max

r 1977




Thirty-four dairy processing firms were interviewed in early 1977 to determine the extent of delivery
case losses and to identify feasi.le and acceptable measures to reduce case losses. Sixteen major retailers op-
erating in Florida were also contacted to determine their practices and problems relative to delivery case
use, and their reaction to various case control measures. Six firms which use returnable containers, seven
major case manufacturers, and dairy industry representatives in 8 other states were also contacted to deter-
mine the effectiveness of various control measures.

Virtually all Florida processors are experiencing extremely serious case losses. Case loss due to theft was
estimated to exceed $1.3 million in 1976, about 0.53 cents per gallon.

After considering the alternatives, recommendations for control include (1) more stringent case manage-
ment practices by dairies, (2) a public relations program directed at dairy customers to educate them of the
seriousness of the problem and to enlist their cooperation in -.ducing losses, (3) use of existing legislative
and regulatory measures as well as development of the legislative framework for a mandatory deposit sys-
tem should it become an economic necessity, (4) consideration of technological advances which would re-
duce case theft, and (5) adherance to a code of ethics by all dairy processors which would prohibit unau-
thorized use of each others' cases.

Key words: dairy marketing, dairy delivery cases, case deposits.

Second Printing
March 1982

This research was supported in part by a grant from
the Florida Dairy Products Association, Inc.

Friday, July 21, 2006 (3).max


by 'y Mathis and L.

a research : ...ect conducted for the

June 1977

The Florida cultural Market ~ ch ter
a part of
The Food and Resource Economics 7- '-tment
Institute of Food and ^ cultural Sciences
University of Florida
Gainesville, Florida

Friday, July 21, 2006 (3).max

The Florida Agricultural Market Research Center

A Service of
The Food and Resource Economics Department
of the
Institute of Food and Agricultural Sciences

The purpose of this Center is to provide timely, applied

research on current and emerging iarL'.etiq problems affecting

Florida's agricultural and marine industries. The Center seeks

to provide research and information to production, marketing,

and processing firms, groups and organizations concerned with

improving and expanding markets for Florida agricultural and

marine products.

The Center is staffed by a basic group of economists trained

in agriculture and marketing. In addition, cooperating personnel

from other IFAS units provide a wide range of expertise which can

be applied as determined by the requirements of individual projects.


Friday, July 21, 2006 (3).max


LIST OF TA. : .................................. v

i ENTS ....................... ..........................vii

SUMMARY .........................................................viii

... ..................................................... 1
S ...................................... .................. 3

FINDINGS ........ .......................... 4

Case Usage in Florida....................................... 5
.......................................... 6
Sr Size Classes and Case ....... ...... .... 8

Case Losses and t.. They .. ............................ 13
ts of -. Losses .................................... 13
Processors' .. of Losses................. ............ 14
Do Losses Occur and is ible............ 15

Internal Control Measures... .......................... .... 22
Case Inventories........................................ 22
Driver Education ...................................... 24
Case Identification.. ................................ .. .
Driver Incentives.. ................................... 27
Case ~ .' F ................................. 29
Retailer Incentives.................................... 32
Warni on Cases ...................................... 33

Additional Control Measures................................ 34
its................................................ 35
Universal Plan..................................... 40
State "-,- -tor....................................... 42
Warning Signs...................................... 42
Fenced Enclosures ^ ." ide Retail Stores................. 43
Voluntary Inside Storage by 'i s ................... 44
Joint -. lic Re- tions with Retailers........... 44
Bulk Delivery Systems ................................ .. 45
: ign ........................................... 46
-- ,F T, o,. of Additional Control Measures ....... 48


Friday, July 21, 2006 (3).max

T'-" OF ^ "'TENTS (r- ., )

.. NS "- RECOMMENDATIONS .... ............. ........... ..... 50

Direct "' Practices...................... ........... 50
Sic ,ting........................................ 50
.......................... ........ .......... 50
Driver t. ability................................... 51
Case Collection .-. .............................. 51
Case t..................................... .... 52
Use '.. Cases....................................... 53

Public lations....................................... 53
Retailers .......................................... 53
al 'lic ..................... ...................

Legislative and 7 .,latory res.................. .... ..

STechnology ....................................... 56

Ethics....................................................... 56

S A....................................................... 58

S B........................................................ 66

APP C........................................................ 76

APPENDIX D......... ............................................. "


Friday, July 21, 2006 (3).max

LI T .- T


1 and value of new case :. by case type,
1976........................................................ 6

2 Size classification and numbers of processors.............. 8

3 Fluid product volume, state totals and aver---, '.- firm
size, 1976.................... .......................... 9

4 ^ purchases relative to volume for the .. iod of 1
76 by firm size ............... .. ..... ...... ......... .. .. 9

5 .. : s' ratios of cases in float to '..:' movement.... 10

6 Case "rements duri volume, -- with estimat-
ed case float, by firm size, 1976..... .. .......... ....... 11

7 tage,of cases discarded in relation to volume, by size
of firm, 1976.............................. ..... ....... 12

8 Processors' estimates of cases discarded due to "- or
condition, weekly and annually by size of fi -: 1976........ 12

9 Estimated costs of case losses by size of firm, 1 ........ 13

10 Estimated costs of case losses as related to volume, by size
of firm, 1976............................................... 14

11 s' descri '' of '"'r case loss situation by size
of firm. .. ................................................ 15

12 :. s descripti of their case loss situation,
area........................................................ 16

13 : s' mates of case losses in relation to volume,
by -.. of outlet ....................................... 17

14 -'.-- of milk deliveries per week, Florida supermarkets
and convenience stores.......................... ... .. ..... 17

15 Empty milk case storage locations in retail stores.......... 18

16 : ")nal and ..lation groups suspected of unauthorized
use of delivery cases by processors, by area................. 19


Friday, July 21, 2006 (3).max

LIST OF TABLES (Continued)

Table Page

17 Internal case control measures used by Florida dairy
processors ................................................. 23

18 Processors' opinions of the effectiveness of various
internal methods of reducing case losses, by area.......... 25

19 Processors' and retialers' ratings of case loss control
measures................................................... 35

20 oracessors' and retailers' preferences for control
measures ......................................... 36

21 Processors' ratings of selected case loss control measures,
by area............................................ 37

22 Amount of deposit suggested by processors, by size of
firm ....................................... ................ 38

23 Processors' estimates of the cost of a deposit system, by
size of firm........................................... 39

24 Ranking of control measures by processors and retailers.... 49

A-1 Dairy processing firms contacted........................... 59

A-2 Retail firms contacted ....... .... .... ..... .... ... ...... 60

A-3 Dairy groups contacted.............................. .... 61

A-4 Soft drink, egg and bakery firms contacted................. 62

A-5 Case manufacturers contacted............................... 63

A-6 Proportions of various types of delivery cases used by
dairies .................................................... 64

A-7 Presence of manufacture dates on cases.................... 65

A-8 Case exchange costs by size of firm, 1976.................. 65


Friday, July 21, 2006 (3).max


This research was _. in part by a grant '* the Florida

Dairy ...- '. Association. Mr. John Tri .. i' -irman of the ...d

and Mr. J. R. Antink, President of this association gave leadership

to dairy process i ....' efforts to make the study successful. All

''ves of dairy firms serving Florida are due thanks for their

time and cooperation in ; ?di,., information for the study, as are

members -' retail firms who were interviewed.

We wish to acknowl. '..: the assistance of the representatives of

dairy : .: associations in several other states and members from

dairy firms outside the Florida market area. Their i o on and

experiences were valuable. ". tatives of case

contacted were most helpful, and so were members of other food in, ':,

firms interv"

assistance of Dr. ":-I Extension Economist, and Dr.

Ron Richter, Extension Dairy Technologist, is acknowl- 'i:..:' with thanks.

Mr. Wershow and Mr. Steve F -. :.. P "x D,

1 -: --::-, which we think is a most useful section of this --

Typing, manuscri.' i ':on and o. other key jobs were done by

Ms. Patricia 'ille. '. .- processing and analysis of study data

were 'ded ;. Carol Beran and Ms. Carol Dunham.

s report is circulated without formal review by the Food and
Resource 7." .:: 'cs .... Content is the sole ." ility of
the authors.


Friday, July 21, 2006 (3).max


Dairy >,ars serving Florida lose thousands of milk cases each year.
Their loss cost the Florida dairy industry over $1.3 million in 1l76.
Problems of case losses are serious throughout the United States.

A large number of measures aimed at reducing case losses were evaluated
by executives from Florida dairy -roce.sing firms and from major retail
firms in the state. Executives in 36 dairy plants operated by 34 firms,
and executives in 16 retail organizations were personally interviewed.

In addition, dairy product association representatives and processors
in 8 other states were contacted by telephone. Executives in 4 soft
drink, 2 egg marketing, and 9 case 4 Ian I ILting firms were interviewed
by telephone. The president of the Florida Dairy Carton Case Exchange
was personally interviewed.

About 75 percent of all cases used in the state are plastic. Some
dairies use wire cases exclusively. Florida dairies purchased 519,000
cases in 1976 at a cost of about $1.3 million.

Dairies were classified by annual volume, expressed in cases of fluid
product, as large, medium or small. Processors purchased an average
of 8.8 cases per 1,000 cases of product volume in 1976. Case purchases
varied considerably by firm size, with a wide range within each size

Total case requirements (float) reported by firms varied from 1.5 to
7.5 cases per case of product. Dairies discard an average of one case
per 1,000 cases of product volume or an average of 35 cases per firm
per week due to damage or condition. Total value of discards was about
$170,000 in 1976.

Case losses cost Florida dairy processors $1,329,720 in 1976. This
includes new cases, and other costs such as plant downtime and other
inefficiences resulting from missing cases. This is an air,.I'-j of
$39,109 per firm, or $21.18 per 1,000 cases of product, and 0.53t per

All or a majority of processors in all areas of the state considered
case losses serious or extremely serious. Dairy executives felt most
losses were from stacks of empty cases behind supermarkets. While
supermarkets handle about 50 percent of milk volume, processors felt
that 70 percent of losses took place from outside storage there. Other
types of outlets were thought to account for less case losses than
their proportionate volume.


Friday, July 21, 2006 (3).max

,-c :e-rrs interviewed rated other dairies as most likely to make
unauthorized use of their cases, followed by produce merchants,
supermarkets, other food processors and independent groceries.

Processors rated seven control measures internal to dairy firms or
used within the dairy processing industry: drivers' case inventories,
educational efforts with drivers aimed at cutting case losses, driver
incentive plans for retaining or retrieving cases, case identification,
membership in the Florida Dairy Carton Case Exchange, incentive plans
with retailers, and warnings against misuse printed on cases. The
writ of replevin to recover cases was also evaluated.

.teid on a scale of 0 (extremely ineffective) to 9 (extremely effective)
driver inventories rated 5 or of some value, and driver education rated
almost as well. These two measures were judged effective by about a
third of the processors interviewed, as was a driver incentive. The
remaining measures were rated significantly lower, and judged relatively

Additional control measures were evaluated by processors and retailers.
-'ii measures were: deposits, a universal case plan, state inspectors,
warning signs, fenced enclosures at retail stores, voluntary inside
storage by retailers, public relations efforts, bulk delivery systems,
and case redesign.

A mandatory deposit was the most preferred option among processors.
Virtually everyone was opposed to a voluntary deposit system. Processors
feel that competitive pressures would make the system infeasible. Re-
tailers oppose any type of deposit for obvious reasons, with more dislike
apparent for a voluntary deposit.

Costs of a dr-,r,.it system are a major consideration. Procie .swrr estimat-
ed their costs would range from zero to $94,000 per firm per year; the
average was $20,500 per firm, for an industry total of nearly $700,000.
Deposits would cost retailers approximately $65 per store per year (labor
costs only), for a state total of $487,500 annually. Processors and
retailers combined costs would be $1,184,000. Additional unknown e'^ro"ce-
ment costs could be substantial, as well.

In those states with deposit systems, the major benefit stems from improv-
ed case control by dairies. Florida processors felt that a deposit, if
adopted, should be from 25 per case to the full value of the case. The
average was $1.11.

A universal case plan (UCP) offers greater efficiency of case i:.:i' in
markets where accounts change processors frequently. Processors and
retailers both tended to dislike this option, feeling that it would
increase case costs. One UCP is currently functioning in Cincinnati,
Ohio, but has not resulted in appreciable savings.


Friday, July 21, 2006 (3).max

State inspectors might discourage unauthorized use by business firms
at relatively low cost to the dairy industry. However, this alternative
was unpopular among processors and retailers.

Warning signs could be used to inform the public that taking cases is
illegal. They could also be used as part of a retailer public relations
effort to show seriousness of the problem. Dairy executives were pessimis-
tic about effectiveness, concerned about increasing losses by attracting
attention to cases and concerned about costs. Retailers generally favored
warning signs.

Fenced enclosures are presently used by some retailers, primarily for
storage of soft drink bottles. Enclosures may be feasible for high-loss
locations, but processors and retailers tended to dislike this alternative.
Their concerns were cost, convenience of use, maintenance, and sanitation.

Voluntary inside storage by retailers was rated lower by processors than
by retailers. Dairy executives felt requesting inside storage was an
intrusion in store operations, and impractical for most retailers.

A public relations effort to educate consumers as to the increased costs
of products they buy as a result of "missing" dairy cases and shopping
carts was met with ,ene--l indifference by processors and convenience
stores. Supermarkets were slightly favorable. Processors feel that
publicity might aggrevate the problem. E .eriences in other states
have not been encouraging.

Bulk delivery systems are presently used by a few firms, and studies
have shown them to be labor-saving. However, this approach was especial-
ly disliked by processors and convenience stores. Supermarkets were only
slightly less unfavorable. The primary reasons for disliking bulk handl-
ing is changeover expense and limited space in many stores.

Case redesign using nesting or collapsible cases would facilitate indoor
storage and make transportation of cases back to plants easier. Dairies
were generally neutral on this possibility while retailers liked the
idea. A few case manufacturers have worked on this problem recently.
Collapsible and nesting cases developed so far were more expensive, re-
quired additional labor or machinery, and did not perform as well as
the standard case.

Recommendations are grouped under the headings of direct management
practices, public relations, legislative and regulatory measures, im-
proved technology, and ethics.

Direct -iaqragement practices recommended were to improve basic accounting
procedures for cases, maintain more detailed case records, make drivers
responsible for cases, improve case collection procedures, consider hiring
a case scout, and use one-way cases for high-loss accounts.


Friday, July 21, 2006 (3).max

S'lic relations by dairy with retail firm management
was "-;1 ted, al : with by route .:-. 'sors with individual
stores. Some low-cost with the general public mi. be helpful,
but are not recommended because of their le adverse -- ts.

Legislative and .. la' .
with existing measures,
ing the framework for a '
of assistance from state

recommendations included becoming familiar
"yi these measures when, ate,
t system and investigating the ility
tion stations.

Technological improvements should be monitored and evaluated, and case
designs or other systems investigated.

Ethics were stressed, with the '-
to use only its own cases particularly

e each firm making an

Friday, July 21, 2006 (3).max


Kary Mathis and Robert L. Degner


Florida dairy processors lose thousands of milk delivery cases

every year. This loss costs the dairy industry well over $1 million

annually. If passed on to the consumer in the form of higher milk

prices, case losses would cost Florida citizens about $1.5 million

each year. Estimates of costs of case losses in other areas are

substantial (Figure 1).

As with processors in many other states, Florida dairy firms

have attempted to reduce case losses for many years. Florida

aj -cet scrs helped organize a case ce<,:h.rirqe firm to return member

firms' cases from other dairy plants. Association officers and

employees have monitored case loss problems and control measures

in Florida and other states.

'.any control measures have been used, with varying degrees of

success, in Florida and other parts of the U.S. State laws and re-

gulations concerning registry of trademarks and recovery of property

have been enacted or applied. In some states depc',its have been

required or requested from customers and case "scouts" have been

hired to locate missing containers.

KARY MATHIS is associate p-Is:.,nr and ROBERT L. DEGNER is assis-
tant professor of food and resource economics, University of Florida.

Friday, July 21, 2006 (3).max


.. o,o000,000 o5,ooo,(

S70,000, 000

Dairy associations, various states



All these measures have helped reduce or control losses to

some degree, but dairy executives still view case losses as a

serious problem, and one they feel is increasing in severity.

There are almost as many estimates of the amount of case loss as

people estimating, and even more opinions as to those responsible

for losses. Many of these opinions are based on hard evidence of

dairy firm and association personnel who have recovered cases from

unauthorized users and even prosecuted some. However, there are a

great many contradictory or unfounded views and rumors circulating

in the dairy industry concerning case losses. Florida dairy processors

expressed a need for an accurate view of the case loss situation.

The Florida Dairy Products Association requested the Agricultural

Market Research Center to identify and evaluate measures to reduce

losses and improve reuse of milk delivery cases. Specific objectives

were to:

1. Determine the extent of delivery case losses, and estimate

costs of these to processors and retailers.

2. Identify feasible and acceptable measures to reduce case

losses, and estimate costs of implementing these measures.

3. Determine retailers' and other users' practices and problems

with delivery cases, and their reactions to possible control



Beginning in mid-March, Market Research Center and other IFAS

personnel interviewed representatives of all dairy processors in

Florida and those in neighboring states supplying Florida. Executives

in 36 dairy plants owned by 34 firms were interviewed between March 16

Friday, July 21, 2006 (3).max

and April 22 (Table A-1). Executives in 16 retail food organizations

were also interviewed. These were personnel in corporate or regional

offices of the major supermarket and convenience firms serving Florida,

who were responsible for dairy product movement in 3,400 stores in the

state (Table A-2).

Detailed questionnaires were completed for all dairy and retail

firms. Information was coded to insure confidentiality, and then

prepared for data processing (see Appendix B for questionnaires). Appro-

priate computer programs were used to summarize and analyze information

from the interviews.

Representatives of 13 dairy product associations in other states

(Table A-3) were also interviewed by telephone, for information on case

losses and control measures in those states. Executives in four soft

drink firms and two egg marketing firms (Table A-4) provided useful

information on deposit and return experience in those industries as

did personnel of a supermarket bakery division. Nine case manufacturers

were interviewed (Table A-5) and were most helpful. The president of

the Florida Dairy Carton Case Exchange also provided useful information.


Research findings are discussed in this section under four major

headings: Case Jiuape in Florida, case losses and where they occur,

internal control measures, and additional control measures. All

information discussed comes from processors' responses and records

and from retailer interviews, :.J.pplemented by information from other

states and other industries.

Friday, July 21, 2006 (3).max

Of the 34 dairy ,firms servi Florida, 33 use a wire

or plastic case holding 16 quarts or nine half --llons. One firm

uses a 2' *,t wire case. All 1- t cases have virtually the

same dimensions and thus, will -*' in most dairy plant '"on

lines. Some firms now use or have used cases with one dimension

different those 2 other ., in order to reduce losses.

^ all cases currently in use in Florida, about 75 are

plastic. A few dairies use wire cases exclusively, but most s

have '. or are in the process of '.:.. ng to plastic cases

(Table -'). Dairies in other states "ng to plastic cases

as long as 13 years .: and use high proportions of plastic cases.

Dairy association representatives in Cali" -ia estimated that at least

90 percent of the cases used there are plastic. Estimates of the

tion of plastic cases in other states r- f- 70 percent in

Jersey and percent in Texas, to more than 95 percent in New York.

Plastic cases are lly one color, "- bright, with the

company name and/or trademark or '., ..I-' on two sides. A

warning that unauthorized use is .: 'bited is f '.ly :' on

two sides. Date of manufacture is usually ': on plastic and wire

cases as well.

wire containers will have colored corners with the dai

firm name on them. Wire cases usually weigh 4 1/4 to 5 1.'

pounds for the 16-quart size, compared to 2 3/4 to 4 1/2

plastic cases.

Both plastic and wire cases are extremely s'.... and durable,

while relatively li-' in weight. As a result, the cases are

Friday, July 21, 2006 (3).max

extremely useful for

were designed.

.. other than that for which they

Case Purchases

Dairy ..... -s operating in or serving Florida ... their

cases several i turers. A few dairies buy some used out-

of-state cases the Florida .' All dai- executives

interviewed stated that their case --es were "as needed", with

most new cases bought in the late summer as schools begin. Other

heavy periods ----ially for dairies in central and south

Florida and the west coast, are duri the winter tourist season.

Florida dairies surveyed of 519,000 cases in

1976 with a total value $1.3 million (Table 1). .. .: 87 t

of the cases were plastic, at a total value of $1.1 million.

-. le 1.

and value of new case -:-chases

S of firms .
Case type purchasing in 76 of cases

Plastic 23 451,"

Wire 7 66, "


Total 33 519,005


1,102 --



1 --V,617

case : 1976









-11 aver--- are based on 33 firms; one did not provide data.

Many Florida dairy executives cite several

cases, with wire cases:.

a. Lower '

b. Lighter weight

for plastic

Friday, July 21, 2006 (3).max




~--- ~--- ----

c. Easier to clean, keep products cleaner

d. Less product damage

e. Easier to identify

f. Fewer problems in plant, less noisy

g. More durable

h. Load and stack better in trucks

However, wire cases have several strong points cor'pared with plastic

according to a number of the executives interviewed.

a. Less theft

b. More durable in processing line

c. Hold shape better

d. Easier to clean

e. Cool products better

f. Stack better in trucks

Case manufacture dates are placed on plastic and wire cases by

makers, unless purchasers request that they be left off. Nearly two-

thirds (62 percent) of Florida processors stated that dates are now

put on cases they buy (Table A-7). Apparently, some wire and plastic

cases !-nuiqht in past years did not have manufacture dates. These

dates can be used to determine the life of cases and to help estimate

loss and replacement rates.

It was not possible to determine the life expectancy of cases

in the dairy y:.t>.. Data on case purchases, discards and losses

were not sufficiently detailed to allow such calculations. A recent

study in New Jersey reported that dairies there expected plastic

I:l,,, Jersey Milk Industry Association, Inc., "Milk Case Loss
Survey in New .e,'-re.", April 22, 1976.

Friday, July 21, 2006 (3).max

cases to have a normal l^.1 life of 65 months. Wire case 11-

was '.' to be 52 months. :1 li' of a case in Jersey

was 14 1/2 months, according to the
*;_- / -.---- -.--r n.-.-_-

Dairies were classified as la -, medium or small, based on annual

volume, in cases of fluid product (Table 2). Large firms

Table 2.--Size classification and numbers of processors

Size of Fluid product
firm volume, 1Q9

Largea 2, ,000 or more 10
1. b .^^,000 to 2,749,000 13

Small less than 1,000 "^^ 11

All firms 34

.. plants have less than the indicated volume, but were includ-
ed in this classification because ''" are .-'liated and controlled
a" a 'on obviously in the large ca"---" In most cases,
ants with te ties but i- management were
classified into the volume categories of their respective plants.

lume was estimated for two firms in this class:l cation.

accounted about half of the state's fluid product volume in -1 ,

with medium-sized firms making up 41 and small firms the

remainder (Table 3).

.s :' an average of 8.8 cases 1 .""^ cases

product volume in the 1975-7 'od. Case :.. .. varied consider-

ably firm size, with a wide range within each size class (Table 4).

Friday, July 21, 2006 (3).max

Table 3.--Fluid product volume,
size, 1976

state totals and -vr;-iq:, by firm

Size of Nur-ber- of Average annual Estimated state
firms firms volume totals, 1976

------------- Cases ------------

Large 10 3,124,660 31,246,600

Medium 13a 2,001,945 26,025,285

Small 11 501,755 5,519,305

All firms 34 1,846,800 62,791,190

avolume was estimated for two plants in this category.

Table 4.--Case purchases relative to volume for the period of 1975-
76 by firm size

Case purchases
Size of Number per 1,000 cases product
firms of firms Average Low High








All firms

aIf two additional small firms are included, the average for
the remaining firms becomes 5.9 and the low figure becomes 1.5
cases. These firms were excluded because their case purchases are
not typical of the majority of processors.

-All 34 firms purchased cases during 1975-76, but 13 could not
supply sufficient data for analysis.

Friday, July 21, 2006 (3).max

Total case -. reported by firms varied '". 1.5 cases

case of product to 7.5 (Table 5). These requirements di"-

between firms due to different di :. .systems and other -.tors

lar to each firm. .. .. firms actually had

records of their total number of cases or an accurate count of the

number needed '.. .-' or average volume. The ratios ....' are

estimates by the executives interviewed.

Medium-sized processors .: -. 'ly have, on the -- enough

cases for their maximum weekly volumes (Table 6), Large and small

dairies, though, are 11 percent short in cases ~ maximum weekly


Table 5.--Processors' ratios of cases in float to product movement




of firms







not sum to 100

Sdue to rounding.

Friday, July 21, 2006 (3).max


~I -- -~

Table 6.--Case requirements during peak volume, compared with
estimated case float, by firm size, 1976

Estimated number Case shortage
Size of Number required of cases in during maximum
firms for volume float volume

------------- Average --------------- --- Percent---

Large 63,386 56,701 11.8

Medium 30,216 33,261 -0-

Small 10,357 9,306 11.3

All firms 33,647 32,339 4.0

aased on firms estimates of ktheirv maxrimium weekly volume andt
their case-to-product ratios. Case requirements were based on
responses from 33 firms and the estimates of cases in float were
provided by 31 firms.

Dairies must discard an ,ne'i, of one case per 1,000 cases of

product volume (Table 7) or an average of 35 cases per week (Table 8).

Total cost of cases discarded due to damage in plants and distribution

was about $170,000 in u1976 (Tle 8). lUMost of ose interviewed who

were using wire cases felt there was more damage and discarding of

wire cases than plastic. No one really knew actual damage and discard

rates however, since most firms have not kept detailed case inventories

and records.

Several respondents speculated that plant and delivery personnel

might work harder at damaging and discarding older wire cases in those

firms converting to plastic. In any event, accurate accounting of

all cases and their disposition would identify normal or routine

discards. This could be a significant figure for some firms, and one

where careful management could lower costs. This and other related items

are discussed in more detail in the section on control measures.

Friday, July 21, 2006 (3).max

Table 7.--Percentage of cases discarded in
size of firm, 1976

relation to volume, by

Size of Number of Case discards per 1,000
firms firms reporting cases product volume

Large 9 1.1

Medium 12 0.8

Small 8 0.7

All firms 29 1.0

Table 8.--Processors' estimates of cases discarded due to damage or
condition, weekly and annually by size of firm, 1976

Estimated Value of
Size of Average per Average per annual state discarded
firms firm per week firm per year total cases

---------------- Cases ----------------- -Dollars-

Large 67 3,484 34,840 94,765

Medium 34 1,768 22,984 62,516

Small 7 364 4,732 12,871
All firm 35 1,I a 62,556 170,12b

a0ne large, two medium, and three small firms did not provide
estimates of discarded cases. The state annual totals were esti-
mated by using :jiorage- obtained from firms that provided data.
The overall value was estimated using the average replacement
costs for new wire and plastic cases. It was assumed that discards
of the two t'yc':l of cases were proportional to the totals of each
in use. Thus, the weighted replacement cost was $2.72 per case.

Friday, July 21, 2006 (3).max

Costs of'- Losses

Case losses cost Florida dai 's an estimated $1,329,720

in 1976 "able 9). This includes purchases of new cases, and other

costs such as plant downtime and other inefficiencies resulting *

missing cases. ". cost per firm for all ^ firms serving Florida

was over t"1,000 in 1976 (Table 9).

Table 9.--Estimated costs of case losses by size of firm, 1976

_. ,_
Size of
firms costs costs Utoais Total, all firms

----------------------- dollars--------------------

Large 61,718 6.7 68,715 687,147

" ium 33, -~ 3. 7 36, ..7

Small 11 3 ," 14, ^S 164,186

All firms 34 4,413 39,1^^ 1329,720

rect cost is the value of missi cases to each firm (wei-'t-
ed by proportions and lacement costs of plastic and wire cases)
less the firm's estimates of discarded cases. This amount does not
include costs of the dai case '- : : : which amounted to
a total of t^1 ""^ for large fir ; -728 for media ., and $11,189
small,a : :' total of $61 .17 ;:, 1976 (see Table A-8).
Indirect costs include down time of process plant, i
labor and increased : *:on costs.

.ts of case losses in relation to fluid volume averaged

$21.18 1 ."^ cases, or 0.53 cents per gallon for all firms serving

Florida (Table 10). Total costs 1,000 cases or per gallon were

lowest for medium-sized firms and highest for small firms. Large firms

costs were very near the average (Table 10).

Friday, July 21, 2006 (3).max

Table 10.--Estimated costs of case losses as related to volume, by
size of firm, 1976

Average per 1,000 cases
Size of Direct Indirect Total costs
firm costs costs Total per gallon

------------ dollars ------------ cents --
Large 19.75 2.24 21.99 0.55

Medium 16.71 1.67 18.38 0.46

Small 23.09 6.66 29.75 0.74

All firms 18.79 2.39 21.18 0.53b

abSee notes to Table 9.

Total dollar value of case losses is naturally greater with large

firms (Table 9) but small processors have higher costs per unit of

volume (Table 10). Medium firms have the lowest cost of case losses

per unit of product even though they purchase more cases per 1,000

cases of volume than firms in the other size classes (Table 4).

Processors' Views of Losses

Half the processors interviewed feel their case losses are "extremely

serious" and another 35 percent call case losses "serious". All the

large firms and 11 of the 13 medium-sized firms described their case

losses as "extremely serious" or "serious", as did 8 of 11 small firms

(Table 11).

When considered by areas of the state (see Table A-1 for firms by

area) processors generally viewed their case losses as extremely serious

or serious (Table 12). Fewer South Florida processors rated their case

losses in the most serious categories, with two firms stating case

losses are "no problem".

Friday, July 21, 2006 (3).max

Table 11.--Processors' description of their case loss situation by
size of firm

of case loss Firm size
situation Large Medium Small Totals

No. % No. % No. % No. %

serious 8 24 8 24 1 3 17 50

Serious 2 6 3 9 7 21 12 35

Moderate 0 0 0 0 1 3 1 3

Slight 0 0 0 0 2 6 2 6

No problem 0 0 2 6 0 0 2 6

Totals 10 29 13 38 11 32 34 100

Both of these are completely integrated convenience firms that maintain

very tight controls on cases from purchase through store delivery. Five

of the nine South Florida dairies considered losses "extremely serious"

and another viewed case losses as "serious".

Where Do Losses Occur and Who is Responsible?

When asked where they felt case losses occurred, dairy executives

believed most were from stacks of empty cases behind supermarkets.

Processors interviewed felt that the proportion of losses from super-

markets was about 40 percent greater than the proportion of case

deliveries to those outlets. The share of losses occurring at other

types of customers was judged less than those outlets' volume share

(Table 13).

Friday, July 21, 2006 (3).max

Table 12. -


-s' description their case loss situation, by


of firms

*:;- emely serious
S ; em


*'"emely serious


Extremely serious
.. te


West Coast


Extremely serious
Sli '
No problem


Extremely serious
No problem


Friday, July 21, 2006 (3).max



S- tral



Table 13.--Processors' estimates of case losses in relation to volume,
by type of outlet

Percent ofa
case losses

Type of outlet


Small groceries

Convenience stores


All others


Percent of
total volume







percentage estimates for each firm were weighted by firm volume.

Accumulation of empty cases outside .ul rmrvkets is largely a

result of variations in milk sales during the week and the number of

deliveries per store. Most supermarkets have milk delivered five days

a week with 29 percent receiving three deliveries a week (Table 14).

Heavy milk sales during the weekend, with lighter movement early in

the week, often result in large numbers of empty cases outside stores.

Table 14.--Number of milk deliveries per week, Florida supermarkets and
convenience stores

Deliveries per week
Firm 3 4 5 Total
--------------- Percent of firms -------------
Supermarkets 29 0 71 100

Convenience stores 38 38 25 100

Friday, July 21, 2006 (3).max


Deliveries to convenience stores are about equally divided between

three, four and five per week (Table 14). However, total volume at

an individual convenience store is not generally as great as in a super-

market, so cases do not accumulate in large numbers at convenience
stores. Also, empty cases are nearly always kept inside convenience

stores (Table 15).

Table 15.--Empty milk case storage locations in retail stores

Empty cases stored
Type of firm Inside Outside, not enclosed

Number of firms

Supermarkets 2 5

Convenience chains 9 0

Total 11 5

When asked who they felt was responsible for unauthorized use of

their cases, processors interviewed generally felt other dairies were

most likely (Table 16). This view was not universal, however, as other

groups were rated more likely than dairies in the Northeast and West

Coast regions of the state, and other food processors were considered

as likely as other dairies in South Florida (Table 16).

A large dairy in the Chicago area recovered over 5,800 cases in

less than a month, with almost 89 percent from other dairies. Pro-

cessors in Georgia and Alabama reported substantial losses to other

dairies, particularly those operating in other states to the north.

On the other hand, processors in the Cleveland area determined that

only 18 percent of their case losses were to other dairies, with 82

percent lost outside the dairy industry.

Friday, July 21, 2006 (3).max

to M CM 0) LO "- (0V 0

Stoo A c c) 0 r-~ o co
u3 !d o o i- <^- n ~

CD 0:

4 (\j C'4








0 i









43 U)

0 (0



(0 0


0 0















U) U)
C *r-
U) 5-

4 o (
(U U

u 0

M 0 4- S

E a)
4- 4-'
. -o C V U)

s~ o -o C

(/I 0 L-l

U) iU
(U S..
S- (U (IU
o 4--
4-) C r- U)
(U zS e--)

W 4W 4 4) -
Co s a t
t = "o r-

O0 CL m
c- en E"c

u 0 s

Friday, July 21, 2006 (3).max

Om fC' cj ) O r- MO Ci Ln E0 M.o

A (A 4i 3 LCt ( r (A 4: 1- 1;- :\4 C') Cr)

fo r- cC Dr- o o i r' r- CD CDo CD -

O cO 0 co CO Co co CD c co CC

A o0 C) CO r- L3 'z r-- v (n 0) (A A (A

X cj CI Cr C(,M CJ ",J Cr) cr)

0( U)
o in
th ?
0 +)
S... rO
0. J""
>0 (U

'r- r
(6 c

-0 0)

..C O
cv L
C 0o
















fO ,






There is a prevailing view among many processors, in Florida an,

other states, that plastic cases tend to disappear faster than wire.

Part of this feeling may result from the large numbers of plastic

cases that must be purchased to change over from wire cases. There

has been a general trend towards use of plastic cases, as indicated


Greater theft of plastic cases is a definite possibility. The

aesthetic characteristics of plastic cases make them very useful in

the home. Numerous newspaper and magazine articles and advertisements

have appeared which feature in-home uses for plastic milk cases. These

ads have probably stimulated unauthorized use.

A frequent rumor prevailing in the dairy processing industry through-

out the country is that plastic cases are stolen and reground for use

in the toy industry or other plastics manufacturing. This process is

definitely feasible, but is not a likely cause of case loss in Florida.

Most plastic cases are made of high-density polyethylene. This

material can be ground in relatively inexpensive machines (starting at

an estimated $5,000), remelted, and used in injection molding for

plastic products. Virgin high-density polyethylene resin currently

costs about 30 1/4 to 32 cents per pound. Re-processed resin is worth

about 12 to 15 cents per pound which means that a dairy case would be

worth from 34 to 69 cents depending on the weight of the case and the

price of resin, after grinding.

A problem encountered with reprocessed resin is that of color. If

the used material to be reprocessed is all one color, the resultant

product will be the same. However, mixing resin colors will result

in a black plastic.

Friday, July 21, 2006 (3).max

Instances have been discovered where cases were being stolen,

ground and resin sold. In 1968 a major Chicago firm successfully

prosecuted an individual for stealing and grinding cases. During 1973

there was concern that case grinding would become serious due to resin

shortages and resultant high prices. However, at today's prices,

grinding is probably not a serious problem.

Evidence from this study does not support the prevailing view that

plastic cases are more subject to theft than the wire type. One major

midwest firm has several divisions that use wire cases exclusively and

several that use plastic exclusively. They experienced similar losses

with both 'ypes. In Florida, firms with virtually all wire cases re-

ported losses similar to those with all plastic. However, data on

case losses obtained from processors in this study are insufficient to

determine conclusively which type of case results in greater theft.

Information on case losses from four Florida dairies using all

plastic cases and two with predominantly wire cases (90 and 95 percent)

shows some differences in costs of case losses in relation to volume,

as shown below.

Plastic cases Wire cases
Costs of case losses per ioc.t. .:: los s per0
Firm 1,000 cases product Firm 1,000 cases product

A $21.30 A (90% wire) $17.00

B 40.40 B (95% wire) 5.80

C 13.0

D 29.00

Friday, July 21, 2006 (3).max

However, most 'rms contacted did not have data in enough detail to

determine costs of case losses l,- 1.- cases of product volume. Case

and other costs of missing cases will v. depending on the

firm's volume, distribution system, market area, : of customers,

and poss:>ly other -. tors. No definite conclusions should be drawn

from the <:.-es shown just above. Those costs are included as examples

of case losses for each type of case, but should not be cited as

nitee evidence that firms using one type or another '' fewer


Internal Control "

controls internal to the dairy ing int'. '. were

explored with to determine processors' opinions and -

iences as to their ". "iveness. Seven basic measures were examined:

case inventories, driver education, case identification, driver in-

centives, the case I. ;- -. retailer incentives, and warni

against misuse on cases. -, .' these measures was rated processors

as to effectiveness on a sea from 0 to 9 where 0 ly

i* and 9 represented ly :" In addition, the

Writ of -,levin enforceable under' r 506 of the Florida Statutes

was discussed with s.

Case Inventories

Until recently, few firms required drivers to inventory cases

because the additional :.`" -: was thought to outweigh the benefits.

However, increasing case losses during the .--t several years have
Some '" -- to develop and use invent--' systems. Currently,

about half of the processors interviewed use some : of inventory

Friday, July 21, 2006 (3).max

procedure. Surprisingly, almost half have no case inventory system

at all (Table 17).

Table 17.--Internal case control measures used by Florida dairy

Have used
or are Have not
Measure using used Totals

Case inventories
Driver education
Case identification
Driver incentives
Case exchange :.wror-.Ia
Retailer incentives
Warnings on cases

-------- Percent of processors -----------

53 47 100
88 12 100
97 3 100
21 79 100
73 27 100
0 100 100
38 62 100

percentages are based on the total number of processors operating
in areas where the case exchange service is operating, i.e. the Pan-
handle area is excluded.

Only one firm has a case inventory on an account-by-account basis

for its customers. This detailed system was initiated early in 1977

and its effectiveness was undetermined when firm executives were

interviewed. A few firms have less detailed inventory procedures

which allow them to determine case losses by driver; others have

systems which keep track of net case deliveries and returns by major

customers or by .:,..;.,r.n, branches or distribution centers.

Even though some firms have identified major sources of case

losses, very few have attached penalties for such losses. One firm

maintains loss records for a major account on a monthly basis and

charges $1.00 per case for shortages. This charge was negotiated when

Friday, July 21, 2006 (3).max

the account was established. However, most firms feel that competition

is too keen to enable them to bargain for such concessions from retailers.

Drivers are rarely held responsible for case losses. Where records

are kept on losses by route, the information is usually used for reprimand-

ing drivers rather than for imposing financial penalties for case shortages.

Some firms expressed the fear that wage regulations and/or union contracts

would prevent them from penalizing drivers.

Florida processors generally viewed drivers' case inventories as

the most effective method currently available for controlling case

losses. The average rating was 5.0 (Table 18). A major midwest dairy

which had suffered substantial case losses instituted a case inventory

procedure which has been highly successful. They reduced their case

requirements by approximately 30 percent in less than two years. The

firm gave all drivers notice on Friday that beginning the following

Monday,all drivers would be charged out with cases and all returned

cases would be counted. When the drivers realized that the crr.iprin was

serious about determining where case losses were occurring, many drivers

started returning more cases than they took out. For the first month of

"case audits", all cases taken out and returned were counted. Subsequent-

ly, case audits have been made one day per week on a spot-check basis.

This maintains case control while reducing enforcement costs.

Driver Education

Eighty-eight percent of the firms contacted currently use some

type of driver education in their attempts to reduce case losses (Table 17).

Firms that make no conscious driver education attempts generally felt

that driver turnover was so low that drivers were aware of the problem

and educational efforts were unnecessary.

Friday, July 21, 2006 (3).max

Table 18.--Processors' opinions of the effectiveness of various internal
methods of reducing case losses, by area

North- North- West All
Measure west east Central Coast South areas

-------------.-- Mean ratingsa---------------------

inventories 4.5 5.3 2.7 5.3 3.9 5.0

education 4.1 4.8 8.0 5.0 4.6 4.8

Identification 2.8 3.2 6.3 2.0 5.4 3.6

incentives 5.6 0.0 --- 2.9 2.8 3.4

Florida case b
exchange --- 1.0 4.7 2.5 3.2 2.9

incentives 2.8 2.3 --- 2.2 0.6 2.4

Warning 2.4 3.0 0.0 1.1 3.0 2.1

aRating scale: 0 = extremely ineffective, 9 = extremely effective.

bThe case exchange program has not operated in the Northwest section
of the state.

Driver education was rated 4.8, second only to case inventories in

effectiveness (Table 18). Most attempts at driver education are re-

latively informal. New drivers typically receive on-the-job training

from experienced drivers or supervisors, at which time proper case

pick-up procedures are stressed. After the initial training period,

most firms use only verbal communication with drivers to remind them

of the effects and costs of case losses. However, a few firms have

used posters, personal letters to drivers, and discussions in sales

meetings to elicit greater driver concern for cases.

Friday, July 21, 2006 (3).max

Attempts at educating drivers should put the loss in a jr-'-p'ctive

the driver can easily comprehend. Relating case losses to a driver's

specific route would probably make a greater inpress;ion than telling

him the "the company spent $100,000 for cases last year". Closely re-

lated to driver education is supervision. Nearly half of the retail

food firms interviewed reported having problems as a result of drivers

failing to pick up cases. Failure to pick up cases promptly not only

results in storage problems for retailers but exposes cases to theft

and damage. Supervisors can assist drivers in developing route patterns

that will minimize empty case exposure.

Case Identiifcation

Only one firm of the 34 contacted does not identify its cases

with the firm name or logo. Wire cases are usually identified with

the owner's name sta'prd into the corner supports, although i:.'r.iplates

are sometimes attached to the sides of the case. Plastic cases usually

have identification printed on two sides. Most case manufacturers

will Jprint identification on all four sides of the case, for an additional

5 -.r case, but most dairy executives do not feel the expense is


Color is also used for identification. Corners of wire cases are

usually painted a distinctive color, and plastic cases are molded with

a specified color of resin. Color identification makes cases easier

for retailers and drivers to sort cases. However, it is quite likely

that the bright attractive colors currently used for plastic cases

by many processors contribute to case losses.

Friday, July 21, 2006 (3).max

The average rating for identification as a control measure was 3.6,

substantially below case inventories and driver education (Table 18).

There were considerable differences of opinion as to the effectiveness

of identification, as well. Several processors felt that identification

was only useful in retrieving cases from other processors. They thought

identification did little to prevent unauthorized use by the general

public. To a certain extent, this may be true because of the proliferation

in recent years of consumer products on which brand names or logos appear.

However, numerous delivery cases were observed in the possession of the

general public during the course of the study which had the owners' name

obliterated. Apparently, many "consumers" find it desirable to remove

owners' identification. Thus, it can be presumed that identification

has some value in reducing losses. Ideally, identification should be

difficult to remove for maximum effectiveness. Some identification can

be easily painted over or buffed off. It might be possible for manufactur-

ers to stamp, mold or otherwise mark cases more permanently.

Driver Incentives

About one-fifth of the processors interviewed have tried various

types of driver incentive plans to encourage drivers to return cases

to plants (Table 17). Most driver incentive programs are used inter-

mittently when firms experience case shortages. The most common in-

centive is a per case ;iaymtnt ranging from 10 to 25, but one firm has

used gifts and gift certificates as well. Another firm has a company

profit sharing plan, and stresses how case losses reduce profits.

Payments in incentive Frol" .l: s are usually Dased on the number of

cases returned compared to the number taken out. Unfortunately, several

Friday, July 21, 2006 (3).max

firms have allowed the "incentive" to degenerate into a "bounty",

since the payment is made for any case rather than only their own.

One firm recently initiated a promising incentive plan which was

based on a drivers' net case returns on a monthly basis. For :"

month that a drivers' case returns equal or exceed the number taken

from the plant he receives a $10 bonus, to be paid in December.

Drivers are only given credit for the firms' own cases. When this

firm was interviewed, the program had not been operating long enough

to assess its effectiveness.

Processors did not generally view driver incentives as being very

effective in reducing case losses. The statewide average rating was

3.4. The only exception was the .'lori:...,'';t area, where incentives are

sometimes used indiscriminately (Table 18).\

Virtually all processors that had used driver incentives reported

difficulties with them. The primary problem was with drivers stealing

cases from each other and from the plant. Most firms reported incidents

of case theft by drivers from other drivers' routes, from other drivers'

trucks, and especially from the plant. In most cases, security at the

plant was a problem.

Another serious shortcoming of typical incentive plans is that

drivers tended to anticipate and perhaps contribute to the need for

incentives. Where incentives are used intermittently, drivers soon

learn that case short-am: are followed by return incentives. Such

practices encourage unscrupulous drivers to become lax in case return

and in some cases, to stockpile cases for "case drives" and the

resulting incentives.

Friday, July 21, 2006 (3).max

Other problems with driver incentives included reduced effectiveness

after a short while, excessive administration, and indiscriminate case

collections by drivers.

Case Exchange Program

In the normal course of delivering fluid dairy products, especially

to outlets where there are multiple suppliers, it is highly probable

that some mixing of competitors' cases will occur despite conscientious

efforts by drivers. Where drivers are allowed by management to be lax

in their case collection and return procedures, considerable case

mixing occurs. Further, when firms regularly use substantial numbers

of competitors' cases, the problem is compounded, frequently resulting

in many cases moving outside the owning firms' market area.

To maintain better control of their own cases, a few Central Florida

dairy processors began to use case exchange services provided by Mr. Jack

Osteen of Orlando in the late 1960's. In 1970, Mr. Osteen's firm,

Florida Dairy Carton Case Exchange, Inc. (FDCCE) was sanctioned by the

Florida Dairy Products Association (FDPA) to make services available to

all FDPA members throughout the state. Since 1970, FDCCE has established

services in all areas of the state except the Northwest or Panhandle

section. In April of 1977, 19 of the 26 firms in the areas served by

the Exchange were utilizing the services.

Processors use the exchange service on a voluntary basis, paying a

charge of 30t per case returned. The charge compares favorably with

that in other areas of the country. A case exchange in Massachusetts

charges 45 per case for members who own shares in the Exchange, 55t

Friday, July 21, 2006 (3).max

for members who do not own shares, and 65 per case for non-members.

In Cleveland, the charge is approximately one-fourth the price of a new

case, and a similar charge was made in the Chicago area. In most areas,

case exchanges have been only marginally effective in controlling case

losses outside the dairy industry.

The Florida E:...:F'.nAle picks up stray cases primarily at dairy

processors, although a few are obtained at water bottlers and some

food processors. Cases that are abandoned along roadways and refuse

dumps are also picked up whenever found, but according to Mr. Osteen,

these constitute a very small proportion of the total.

The cases picked up by Exchange trucks are stored on a vacant

lot in Orlando leased by FDCCE. Whenever truckload quantities accumulate

for individual processor, delivery is made directly to their plants.

One firm occasionally picks up its own cases at FDCCE's storage lot

when it experiences severe case shortages, and the firm pays a reduced


One shortcoming of FDCCE's operation is the lack of security at

its storage area. Several thousand cases may be stored unprotected at

any given time. It is quite probable that some theft occurs. However,

it should be noted that FDCCE does not own the storage area, and tighter

security would result in increased operating costs which would eventually

cause charges for returned cases to increase.

Opinions of r,-r's --rcrtiveness in reducing case losses varied

considerably ji if g ;iroceo:.~rs. The average rating for all areas was

2.9, but ranged for 1.0 in the Northeast to 4.7 in the Central section

of the state (Table 18). Reaction to the Exchange was mixed. Some

Friday, July 21, 2006 (3).max

processors were extremely critical, others were pleased. On the

positive side, processors felt that the E/rha.i'je provided them with

improved case returns at a reasonable cost.

Some processors complained that the Exchange "did not come around

often enough". This complaint was heard more frequently outside the

central, homebase area. Perhaps a regularly scheduled route for all

areas by FDCCE would alleviate this problem. On the other hand,

operation of a truck route entails considerable expense, and it may

not be economically feasible for FDCCE to *oro-te routes on a scheduled

basis. An alternative which FDCCE might explore in the interest of

improved public relations would be to :-rovide cooperating processors

with a periodic report on the number of their cases which FDCCE has on

hand. Obviously, FDCCE cannot economically justify delivery of small

numbers of cases, but conversely, it cannot retrieve cases without

visiting processors either.

Some processors also voiced concern over the integrity of the

FDCCE operation. Comments focused on three primary areas: 1) the

temptation to pick up cases behind stores or other unprotected areas,

2) the temptation to sell Florida cases out of state, and 3) selective,

arbitrary case collection procedures from processors resulting in some

firms not obtaining their cases back from other firms. There are no

easy ways to allay these concerns. One procedure which could reduce

or eliminate many complaints would be an inexpensive invoice system

maintained by FDCCE and verified by processors, which would account for

all cases picked up and delivered by FDCCE. Abandoned cases located

by FDCCE would obviously lack verification, but should constitute an

Friday, July 21, 2006 (3).max

extremely small proportion of the total. The accounting system could

be audited periodically by FDPA as a condition for continued sanction

of FDCCE. The records would provide a greater legitimacy for FDCCE

and would provide processors with assurance that they are not being

treated unfairly. Further, detailed auditing of the case exchange

invoices could give processors an indication of which firms are lax in

their own case collections. Individual processors could then take

appropriate action with those particular firms, which should result in

less case "mixing".

It should be noted that the present system is basically unfair to

firms which conscientiously keep their cases separate from their com-

petitors. They pay a fee to get their own cases back (which is still

substantially less than the price of a new case) while firms that

indiscriminately pick up cases benefit from the use of the cases and

are not penalized for doing so. A more equitable, but presently un-

workable arrangement would be to have firms possessing others' cases

bear the costs of returning them to the owners. This arrangement

would probably require legislative action.

Retailer Incentives

Retailer incentives such as discounts or rebates for case returns

have not been used in Florida. Further, processors were of the opinion

that such incentives would probably not be very effective in reducing

case losses. Their average rating was only 2.4 (Table 18). Several felt

that a retailer incentive would not be practical because of the record

keeping that such a plan would necessitate. The combined costs of record

keeping plus the incentive itself were viewed by processors as too great

to make this a viable alternative.

Friday, July 21, 2006 (3).max

Since adequate data on case losses by retail firms were not available

from processor, the retailer incentive plan could not be analyzed from

an economic standpoint. As data are obtained by processors, however,

this alternative may be reexamined.

Warnings on Cases

The use of warnings against unauthorized use of cases appears to

be increasing rapidly, especially on plastic cases. Approximately

70 percent of the firms which use plastic cases reported having warnings

on some or all of those cases. The prevalence of warnings on wire cases

is substantially lower. About 25 percent of the firms reported using

warnings on some or all of their wire cases.

Most plastic cases have flat side panels which allow manufacturers

to print almost any desired warning on the sides at very low cost.

Most plastic case manufacturers will print warnings on two sides along

with the purchasing firm's name and/or logo at no additional charge.

Warnings on wire cases are less commonplace due to the basic case


Despite the increasing use of warnings, processors are pessimistic

as to their effectiveness. The warnings were rated considerably below

other control measures evaluated, averaging 2.1 statewide (Table 18).

Sufficient data were not available to analyze statistically the effects

of warnings on case losses.

Despite the low ratings given to warnings, it is suggested that

processors be sure to specify a strongly worded warning when ordering

cases. Cost would not usually be a factor, and the warning may deter

a segment of the population that may be tempted to "take" cases in the

absence of a warning.

Friday, July 21, 2006 (3).max

Additional Control Measures

Several methods of controlling case losses now used by some

firms in Florida or in other states considered to be potentially use-

ful were investigated with processors and retailers. The measures

evaluated were: deposits, a universal case plan, state inspectors,

signs and fences, voluntary inside storage by retailers, public re-

lations efforts, bulk delivery systems, and case redesign. Each of

these is defined and discussed in detail in succeeding sections.

Processors and retailers rated each of these measures on a nine-

point rating scale indicating how strongly they cited or disliked

each measure (I = like very much, 9 = dislike very much). Average

ratings by dairy executives placed a mandatory deposit as the most

preferred measure while a voluntary deposit was among the least

liked (Table 19). Retailers disliked a mandatory deposit, but opposed

a voluntary deposit even more.

Aside from their differences on a mandatory deposit, processors

and retailers generally agreed in their ratings of the other control

measures. There were differences between ratings by supermarket

executives from those by representatives of convenience store fims

(Table 19). Supermarket personnel showed a much stronger dislike for

the mandatory deposit and voluntary inside storage than did members

of convenience store firms. On the other hand, convenience chain

executives were less interested than supermarket personnel in joint

public relations programs with dairies to attempt to reduce losses in

milk cases and grocery carts. Ratings and other aspects of each of

the measures along with comments by those interviewed are discussed

in detail in following sections.

Friday, July 21, 2006 (3).max

Table 19.--Processors' and retailers' ratings of case loss control

uConvenience A1l
Measure Processors Supermarkets stores retailers

Mandatory deposit 3.6 8.1 5.6 6.7
Voluntary deposit 7.4 8.4 8.2 8.3
Universal case plan 7.1 6.2 7.0 6.6
State inspector 6.2 5.9 7.9 6.9
Warning signs 5.8 2.9 4.4 3.6
Fenced enclosures 5.4 6.4 5.2 5.8
Voluntary inside
storage 5.8 4.7 2.6 3.7
Public relations
program 5.0 3.7 5.5 4.1
Bulk delivery
system 7.6 6.1 7.6 6.9
Case redesign 4.9 2.3 3.7 3.1

aScale of 1 to 9,
very much".

where 1 was "like very much" and 9 was "dislike

In addition, ratings on each control measure were combined into

three groups, to give a general indication of processors' and retailers'

overall feelings toward each of the controls. As already noted, both

groups felt generally the same about the measures, with the exceptions

already indicated (Table 20).


No subject connected with case losses is so likely to get a smile

from processors or a snarl from retailers. A mandatory deposit, establish-

ed by state law or regulation, was most preferred by processors from

among the choices offered in interviews. As could be expected, retailers

Friday, July 21, 2006 (3).max

ranked the mandatory deposit far down in preference, with an average

rating of 6.7, compared to the processors' rating of 3.6 (Table 19).

Table 20.--Processors' and retailers' preferences for control measures

Processorsa Retailersa
Measure Favor Neutral Oppose Favor Neutral Oppose

------------------- Percent ---------------------

65 11

Voluntary deposit 15
Universal case plan 10
State inspectors 24
Warning signs 21
Fenced enclosures 31
Voluntary inside
storage 26
Joint public
relations 33
Bulk delivery
systems 6
Case redesign 38

aOn a rating scale of

Processors in the Northwest area

by area) and in the Northeast favored

24 25
76 0
68 0
58 14
47 57
44 33

52 54

30 56

1-9; 1-3 = favor, 4-6 = neutral, 7-9 = oppose.

(see Table A-1 for firms and locations

a mandatory tf ~' considerably more

than did executives in the other three areas (Table 21). However, the

mandatory deposit was also preferred to other alternatives in South Florida,

even though rated considerably lower than in the Northeast and Northwest.

Central Florida processors rated a mandatory deposit 3.7, second in their

preferences, as did West Cna-t processors with a 3.9.

Voluntary deposits were rated last or next-to-last in all areas, re-

ceiving an average rating of 7.4 statewide. A voluntary deposit was

Friday, July 21, 2006 (3).max

Mandatory deposit

disliked slightly less in Central Florida, with the strongest negative

feelings in the l it.'eIt and Northeast regions.

Table 21.--Processors' ratings of selected case loss control measures,
by area

North- North- West All
Measure west east Central Coast South areas

------------------- Mean ratingsa-----------------

Mandatory deposit 2.6 2.7 3.7 4.1 4.8 3.6
Voluntary deposit 7.8 7.8 6.7 7.3 7.1 7.4
Universal case plan 6.4 7.3 7.3 7.6 6.3 7.1
State inspector 5.4 5.8 7.3 6.0 6.3 6.2
Warning signs 6.0 5.5 2.0 4.6 5.4 5.8
Fenced, lockable
enclosures 5.3 4.1 5.5 6.0 6.5 5.4
Joint public
relations 5.0 4.2 4.9 3.9 5.4 5.0
Bulk delivery
system 6.9 7.6 8.1 8.1 6.6 7.6
Case redesign 3.4 4.1 5.5 4.4 5.1 4.9

aMean values are based
9 = dislike very much.

on a rating scale where 1 = like very much,

Retailers were even more strongly opposed to a voluntary deposit

than were processors.

Average retailer rating was 8.3.

As mentioned

earlier (Table 19) retailers rated a mandatory deposit 6.7, with super-

markets much more strongly opposed (rating of 8.1) than convenience

stores (5.6 rating).

Processors were asked what amount a deposit should be, if a deposit

were required. Suggestions for deposit amount )-!,i- from 25d to the

cost of a case. Average for all processors was $1.11 (Table 22).

Friday, July 21, 2006 (3).max

When asked to estimate costs to their firms of implementing a

deposit system, processors gave figures from zero to about $94,000.

,A'.'er-lT' cost per firm was estimated at about $20,500 per year. Total

annual cost for the 34 firms serving Florida was nearly $700,000

(Table 23).

Retailers were reluctant to estimate their costs for a deposit

system. Only a few firm representatives would estimate store employee

time and other costs associated with a deposit. Nearly all who would

estimate time needed figured an added 5 minutes per store per delivery.

Calculating only employee time at $3 per hour, average cost per store per

year was about $65. While not appearing large at first glance, this

amount would mean that a supermarket chain with 200 stores would spend

$13,000 per year more than they are currently spending. A convenience

chain with 500 stores would spend $32,500 annually. Costs for additional

storage and accounting could not be estimated.

There are an estimated 7,500 grocery stores of all types in Florida.

At $65 per store per year, cost of a deposit system would be $487,500

annually for grocery stores. Costs to restaurants, institutions and

other outlets served by dairies are not included in this figure.

Table 22.--Amount of deposit suggested by processors, by size of firm

Size of Amount of deposit
firm Number Average Low High

--------------- Dollars -------------

Large 10 1.08 0.25 2.08
Medium 11 1.32 0.50 2.50
Small 10 0.92 0.25 2.00
All firms 31 1.11 0.25 2.50

Friday, July 21, 2006 (3).max

Table 23.--Processors' estimates of the cost of a deposit system, by
size of firm

Size of Average Estimated
firms Number cost Low High state totals

------------------- Dollars-------------------

L-- 10 29,774 0 93,985 297,742
Medium 9 23,467 0 65,000 305,071
Small 9 8,499 0 17,160 93,489
All firms 28 20,479 0 93,9'',5 696,302

aTwn medium firms did not make spcaific estimates, altl+khough t
I -. I I. I~ _V__ U.1+kVUr_- ,
did indicate a deposit system would entail "-, n.I'1, unknown costs". An
arbitrary figure of r.O per v,.-i- was estimated for these two firms.

Total costs estimated for dairies and grocery stores is about $1,184,000 -

about what processors' case losses are now.

Additional requirements for a deposit system are monitoring and

internal accounting in dairies. Those states which have mandatory

deposits also have state employees auditing both processors' and re-

tailers' records to insure that dairies are *:h3r-iing and customers are

paying the deposit. All billing is on a net basis, and most firms use

a computerized accounting system, so actual deposit collections would

not likely be large, nor would accounting costs. California dairies

using a voluntary deposit keep records of customer case use but do not

collect deposits unless the customer leaves that processor.

A major problem reported from all states with either mandatory or

voluntary deposits is the amount of time needed at plants and distribu-

tion centers in counting empty cases back in, and in keeping track of

case movement for individual routes. F:FP''-- entatives from two different

Friday, July 21, 2006 (3).max

state organizations reported that firms that jF',i.n rigorous internal

-a3r q:;ent controls when deposits were required, and maintained those

controls,reduced case losses significantly. One of those representatives

suggested that the main value of a deposit program was the greater

internal control established by dairies.

Other industries have collected deposits on returnable cases

and containers for many years. Soft drink bottlers are the most note-

worthy example. The long history of soft drink case deposits, and

differences in the competitive structure of the soft drink and milk

industries generate a different climate among retailers toward deposits

for each of the containers.

Eggs, bread, meat and other food and beverage products are also

delivered to retail stores in reusable cases and containers. Many

retail organizations, especially convenience chains, use a plastic

case or "totebox" for dry groceries, health and beauty aids and other

packaged merchandise. These containers are usually accounted for with-

in the retail organization.

Plastic egg containers, which hold 15 dozen eggs, are lost at the

rate of 3 to 4 percent per year according to one Florida firm. Losses

for the first six months after these egg cases appear in a given area

are about 10 percent, then drop to the levels mentioned above. One

firm tried to impose a deposit of 50t per case, but decided not to

because of complaints from retailers and competitive pressures.

Universal Case Plan

The concept of a universal case plan where a service firm owns

cases and distributes as needed to dairy members was briefly described

Friday, July 21, 2006 (3).max

to processors and their reaction was obtained. Statewide, two-thirds

felt that such a plan was infeasible. On the nine-point preference scale,

the universal case plan (UCP) was rIne-ally disliked; the average rating

was 7.1 (Table 19) and all areas were very similar (Table 21). Retailers

expressed a similar negative reaction with an average rating of 6.6

(Table 19). Most retailers felt that a universal case plan would have

little if any effect on them. Processors and retailers felt that a

UCP would add another firm that would have to cover expenses and return

a profit, so that case costs would likely be higher than at present.

One plan is currently functioning in Cincinnati, Ohio. The executive

director of this plan was interviewed. The UCP was originally organiz-

ed in 1975 as a non-profit corporation by three major firms, two of

which have since merged. Five dairies in the market area do not partici-

pate. In the two years of the plan's operation, case costs to the dairies

have remained at the same levels as before the UCP.

The two firms which are now members have tightened up their case

accounting procedures, but the UCP has not solved the basic case loss

problem. The UCP executive felt that consumers in general and other

dairies are responsible for case losses. Operating details of the

Cincinnati UCP are presented in Appendix C.

A universal case pool can be particularly helpful in markets which

have a relatively high proportion of volume which is not particularly

loyal, i.e., accounts which are under contract to the lowest bidder.

Case pools can result in greater efficiency by eliminating excess

case requirements that may result when such accounts move from one

processor to another. Given the nature of the various Florida markets,

Friday, July 21, 2006 (3).max

the prevailing attitudes towards a universal case plan and experiences

in other areas, this alternative does not appear to have much promise

of alleviating the Florida industry's problem.

State Inspector

Processors and retailers tended to dislike the alternative of

the dairy industry hiring a state inspector to look for unauthorized

use of cases as shown by the average rating of 6.2 for dairy processors

and 6.9 for reatilers. The primary complaint from both qrr'upr was "we

have too many inspectors already".

A few processors suggested that the present corps of plant inspectors

could be given additional authority and responsibility for correcting

unauthorized case use in plants. However, several other dairy represent-

atives felt plant inspectors should not depart -rr:ril the primary job of

sanitation and plant condition to be, as one processor put, "everybody's


The Michigan Department of Agriculture does investigate reports

of unauthorized case use, and provides post cards for individuals to

report such use. However, none of the nine other state organizations

were found to police case use through their agricultural departments.

Warning Signs

Processors' and retailers' reactions to placing warning signs on

loading docks and case storage areas were explored. Processors in

Central Florida and the West Coast generally a!,ipr-,iove of this alternative,

but those in all other areas tended to dislike the idea (Table 21).

The overall average rating was 5.8. On the other hand, retailers,

particularly supermarkets, tended to like the idea. The average rating

for warning signs from supermarket executives was 2.9, for convenience

Friday, July 21, 2006 (3).max

stores 4.4, for a combined average of 3.6. Processors tended to be

pessimistic about the effectiveness of warning signs and a few express-

ed concern that warning signs might attract attention to the cases

which would result in greater losses. Others were concerned about


Signs do offer the potential of serving a dual purpose. First of

all, the obvious effect would be to inform the public that it is illegal

to take cases. Several processors and retailers felt that many people

were not aware that taking cases was wrong, since cases are unprotected,

and usually at the back of the store in the same areas as the trash.

Another purpose would be to inform retailers that the dairy industry is

serious about controlling case losses. Signs could be used as a part

of a retailer-directed public relations effort.

Fenced Enclosures Outside r- il1 Stores

This measure generated few strong feelings among processors and

retailers. Average ratings were 5.4 and 5.8, respectively, or about

neutral. Some 31 percent of the processors favored the measure, 44

percent opposed it and 25 percent were neutral. Among retailers, 33

percent were in favor, 13 percent were neutral, and 53 percent opposed

fenced enclosures (Table 20).

Several dairy executives, as well as most retailers, were concerned

about likely costs of building enclosures at stores, especially super-

markets. Continuing costs for maintenance and cleaning, and added labor

in moving cases in and out were also expected to be deterrents to wide-

spread adoption.

Friday, July 21, 2006 (3).max

Voluntary Inside Storage by Retailers

Processors rated this measure 5.8, considerably lower than the

retailers' 3.7. Over half of the processors were opposed to trying

to establish this measure, as they felt it would be too costly and

impractical for retailers and an intrusion in internal store operations.

Convenience firm executives favored this control, since many are currently

storing empty cases inside stores. Supermarket representatives were

less enthusiastic about inside storage, rating the measure 4.7 compared

with convenience chains' 2.6. Supermarket executives indicated that

their relatively high volume made inside storage difficult, although

some said they try to keep cases inside in high pilferage areas at the

requests of dairies. Several convenience store executives said their

stores put empty cases back into the cooler. This may be a viable

alternative for many accounts, except where high volume would make

working around empties difficult for store employees as well as drivers.

Joint Public Relations Program with Retailers

Processors and retailers were asked for their opinions about a

joint effort, using mass media and in-store printed materials, to educate

consumers as to the increased costs of the products they buy as a result

of "missing" shopping carts and milk cases. Supermarkets were generally

amenable to such a program, giving it an average rating of 3.7, but

convenience stores tended to react negatively. The obvious reason is

that few shopping carts are used in convenience stores. The overall

processor reaction was mixed as well. Their -eneral reaction was

neutral. There were a few that felt that such a program would have

positive benefits, but there were others that felt that such publicity

would stimulate greater public awareness of milk cases, resulting in

even greater loss.

Friday, July 21, 2006 (3).max

Several dairy organizations in other states have tried various

PR programs. Usually, they have been conducted solely by the dairy

organizations. Results have been mixed, but usually the effectiveness

cannot be measured.

The Cleveland Milk Foundation prepared and distributed news releases

to all local newspapers, radio and television stations. Releases

were used by the media as a public service, at no cost to the foundation.

As a result, several dairies received offers from .;'rr~irycIlr. callers to

sell them small quantities of cases. Dairies suspected that enterprising

individuals had helped themselves to unprotected cases as a result of

the publicity, hoping to make a few dollars. However, the Cleveland area

dairies felt that some cases had been retrieved as a result.

Another media campaign in a southern college town resulted in the

voluntary return of a large number of dairy cases, particularly those

which were the same color as the schools' colors. A major midwest dairy

processor ran a series of radio spots in 1975 aimed at consumers to

educate them as to the seriousness of case losses. The program was

judged to be a total failure because case losses were unabated.

Thus, the overall effects of media campaigns are difficult, if not

impossible, to assess. There is the definite ::o.;ibility of adverse

reaction. Further, to stress the cost of missing delivery cases to

the average family may have little impact, since 1/2t per gallon means

little to family expenditures.

Bulk Delivery Systems

These systems, a radical departure from case deli'.e''y methods now

used, are made up of large wheeled dollies with shelves, holding approxi-

mately 30 cases of milk. Some new or remodeled plants and some large

Friday, July 21, 2006 (3).max

supermarkets have incorporated such systems for many departments,

including dairy products. Some military commissaries also have bulk

milk handling systems.

When considering these systems as alternatives to current methods

with cases, processors did not feel bulk handling was feasible for

existing plants and stores. Processors gave this measure a 7.6 rating,

showing the strongest dislike for it of any of the measures considered

(Table 19). Over three-fourths of the processors opposed bulk systems

as a measure to reduce case losses and only 6 percent favored them.

Retailers rated bulk delivery methods 6.9 and 73 percent were opposed,

with only 27 percent favoring (Table 20).

Many executives from both types of firms.recognized the long-term

trends toward bulk handling milk, and believed that new plants and new

stores would incorporate these systems in the future. A recent study

from Purdue University showed significant labor time and cost savings

with bulk systems in supermarkets.

Processors were concerned that initial costs in plants, trucks

and stores for such systems would be quite high. They also considered

that trucks could transport less product due to weight and bulk of

dollies, and storage and return of dollies and cases would present

many of the same problems experienced with cases.

Case Redesign

The possibility of redesigning the present case was explored with

processors, retailers and case manufacturers. It was felt that a nesting

or collapsible case would facilitate indoor storage by retailers and also

permit more cases to be returned to the processing plant.

Friday, July 21, 2006 (3).max

Heavy sales during the weekend frequently result in retailers stack-

ing cases behind stores. In many instances, drivers making light deliveries

on Monday find that they cannot remove all the empties. As a result, empty

cases are left in alleys and loading docks where they are subject to

damage and pilferage.

The reaction to case redesign by processors was generally one of

indifference. The statewide average preference rating was 4.9. There

were a few that felt that redesign was a viable alternative, but there were

others that were quite pessimistic. Those that disliked the idea were

concerned that case redesign would entail expensive changes to their

equipment, or that the cost of the new case would be prohibitive.

Retailers, supermarkets in particular, expressed a favorable attitude

toward case redesign. Most of the returnable master containers they

presently receive nest in a ratio of 3:1 or more, and they would like for

dairy delivery cases to be easier to store as well.

The seven case manufacturers interviewed that currently make dairy

delivery cases were not optimistic about the possibility of designing

nesting or collapsible cases. Four of the firms have research and develop-

ment departments. Several have developed prototypes which nest or collapse,

but none has been successful. Production runs have been made but there

have been design problems due to the inherent nature of the product being


Cases for milk must be extremely strong due to the weight transported

and the rough handling they receive in the processing line and throughout

the transportation system. Thus, collapsible cases must have strong

hinges and locking devices, which result in considerable expense. Further,

Friday, July 21, 2006 (3).max

sophisticated machines or extra labor is required to assemble or disassemble

the collapsible cases designed so far.

Nesting cases also present problems. Due to the strength required,

the side wall thickness results in a case which does not nest efficiently.

Further, the necessary angle of the side walls results in wasted space

in transportation. As with the collapsible case, a nesting case requires

expensive machinery or additional labor in the processing plant to correct-

ly index it, that is, turn it in the proper direction so that it will nest

or stack as desired.

The likelihood of developing cases that will permit nesting or stacking

in the near future seems remote. There is always the -possibility, however.

Since this problem area is of nationwide scope and concern, pe'-haus assistance

in case design could be obtained from the U.S.D.A., land grant universities

and case manufacturers.

Minor changes to the basic case currently in use should also be explored.

Cases should be as open as strength requirements will permit, in order to

make them less useful for unauthorized purposes. Another basic consideration

is color. Bright colors, particularly for plastic cases, make identification

easier for drivers. But it is also likely that bright colors make cases

more attractive for non-dairy uses. Adoption of an ugly color might reduce


Preference Ranking of Additional Control Measures

It is likely that a number of the alternatives discussed above will

be required in order to reduce case losses. In deciding which to pursue,

processors' and retailers' overall preferences must be considered, because

their acceptability is a prerequisite for success for most measures.

Processors' and retailers' like-dislike ratings of the various measures,

Friday, July 21, 2006 (3).max

when ranked show reasonable agreement on most measures, except for deposits

(Table 24).

Table 24.--Ranking of control measures by processors and retailers

Measure Processors Retailers

---- ---- P. 1---------- i. ----------
a. .

Mandatory deposit 1 7
Voluntary deposit 9 10
Universal case plan 8 6
State insI.'ctt:r 7 9
Warning signs 6 2
Fenced enclosures 4 5
Volunt-ir-, inside storage 5 -3
Public relations program 3 4
Bulk delivery systems 10 8
Case redesign 2 1

al = Preferred most; 10 = Preferred least

Case redesign, joint public relations, fenced enclosures, and voluntary

inside storage were all ranked in the top five by both processors and re-

tailers. Warning signs, rated highly by retailers, were placed sixth by

dairy executives. Otherwise, the last four measures listed state inspectors,

a universal case plan, voluntary deposit and bulk handling systems were

ranked nearly the same by both groups.

Findings show considerable agn-empnt on case loss control measures

among both dairy executives and their retail customers. The recommendations

which follow lean heavily on those findings and the agreement shown.

Friday, July 21, 2006 (3).max


The methods of reducing case losses explored by this study can

be classified into five broad categories. They are: direct management

practices, public relations efforts, legislative and regulatory measures,

improved technology, and ethics. Each category is discussed below.

Direct Management Practices

Direct management practices cover a broad -nn" of activities which

can help reduce case losses. Their basic theme is to provide the firm

with more information which can be used for making rational decisions

in regard to cases.

Basic Accounting

Until recently, most processors have apparently given little continuing

attention to the case loss problem. Cases are generally ordered on a crisis

basis, whenever shortages occur in the plant. For accounting purposes, most

larger firms treat cases as part of the production equipment. Thus, the

production manager is primarily concerned with having adequate cases. An

alternative is to make the sales department responsible for cases and there-

fore, more aware of case expenditures. The sales department is closer to

the problem and can exercise more control over drivers. In addition,

coordination among production, sales, and accounting departments is essential

for understanding of case losses and controls.

Case Records

In many firms, records of case purchases are usually aggregated with

other types of equipment purchases, making analyses difficult. Readily

accessible records of case purchases along with records of discards would


Friday, July 21, 2006 (3).max

allow firms to determine case requirements more accurately than is presently

done. Only one firm of the 34 interviewed had case discard records.

Periodic sampling of cases in use (provided they have acquisition

dates) with a comparison of purchase and discard records would allow a

determination of case life. Thus, such records can provide the basis

for making decisions as to the types of case least susceptible to disappear-

ance and d.irri.e and result in lower case costs.

Driver Accountability

Making drivers responsible for cases on a customer basis is one of

the most effective measures used by dairies. Lax case collection efforts

can be easily spotted by supervisors and corrective action taken. Further,

if drivers know which customers are losing cases and how many are being

lost, they can frequently gain more cooperation from stores.

Cases must be carefully accounted for, however. Estimates will not

work. "Policing costs" of drivers' case inventories to insure accuracy

can be reduced by spot-checking case returns once the procedure is adequate-

ly established.

Case Collection Procedures

In addition to close supervision, drivers need help too, particularly

those less epxerienced. Supervisors can assist in developing route patterns

to minimize case return problems. For example, reversing the route may

make it possible for a driver to delay picking up a lot of empty cases

until later in the day so that he does not have to work around them as


High-volume supermarkets which have a history of high case loss may

justify special collection routes. When weekend volume results in more

cases that can be retrieved by a driver during his regular Monday delivery

Friday, July 21, 2006 (3).max

it may be economically feasible to collect empties quickly, rather than

to expose them to damage and pilferage for several days.

Case Scout

A major midwest dairy processor recently hired a retired police

detective to assist in retrieving cases. The scout is employed full time

at an annual salary of $18,000 plus car and expenses. He has retrieved

enough cases in several months to justify his entire annual salary. "o=;

cases to date, 98 percent, have been discovered at other dairies, although

he looks for cases ~erviwheire. His only authority is that of comip:nY

affiliation, backed by a threat of the states' writ of replevin and

occasional police protection.

The scout's general method of operation is to visit businesses suspect-

ed or known to have his company's cases. He explains the purpose of his

visit in a firm but friendly manner. He notes the number of his company's

cases on the premises and makes an appointment for his firm to pick them

up. Thus far, there has been considerable cooperation.

The brief experience of this firm's scout and a two month study in

California indicate that a case scout's effr'tiveness would be greatest

where dairy processors and their milk customers are guilty of unauthorized

use. The use of a case scout to retrieve cases form the general business

community and public would probably be economically infeasible and damaging

to the c:nFn', 's rr':dJil.

The company plans to rotate the scout among its several divisions

for maximum effectiveness. This approach may be feasible in Florida

where severe problems exist with other dairies. However, the economic

effectiveness may diminish when processors stop using each others cases.

Friday, July 21, 2006 (3).max

A major consideration in hiring a case scout would be the type of person:

personable, yet firm. The retired detective apparently has the necessary

attributes to function adequately in the case scout role.

Use One-Way Cases

One-way cases are presently too expensive for general use. However,

for certain types of accounts, such as ports (ships), airports, and other

outlets where case losses are excessive, "expensive" one-way cases may

be the most economical.

Public Relations

Public relations can be directed at two basic audiences: retailers

and the general public. Each is discussed below.


Most retailers contacted during this study were unaware of the economic

losses that dairy processors have been incurring. Retailers do recognize

that cases are valuable. On the average, retailers estimated the value

of a wire case at slightly over $8.00 and the value of a plastic case at

nearly $6.00. Many feel that case loss is primarily due to poor collection

procedures. Th1-e- do not realize how many are being lost at their own stores.

Loss records on a store-by-store basis could elicit greater cooperation

from retailers.

Once adequate loss records are available, dairy executives could make

personal visits to top management armed with specific loss problems and

r-qiue';ts for cooperation. Also, route supervisors could make similar

visits to individual problem stores to elicit their cooperation in re-

ducing losses. Menti.riinn visits with top management to store people will

usually serve to get their attention. These combined efforts, implemented

by all concerned dairies, will serve notice to retailers that the problem

is serious enough to warrant their attention as well. Further, if

Friday, July 21, 2006 (3).max

losses continue, these public relations efforts will have provided some

of the groundwork for stiffer control measures such as deposits.

G>nera, Public

Radio spots and news releases designed to educate the general public

about the seriousness of case losses are difficult to evaluate. Exper-

iences in other areas have been mixed, with little concrete evidence of

their effectiveness. Public-service advertising may be low-cost, but

paid advertising sufficient to provide market saturation would be quite

expensive. Further, increasing the public's awareness of cases through

various programs could increase case disappearance. In view of the

possible adverse consequences of this alternative, it is not recommended
for widespread use.

Legislative and Regulatory Measures

Many processors complained that the present legal remedy for un-

authorized use of cases is too cumbersome. Attorneys have indicated

that little likelihood exists for revising the present legal procedures

to make prosecution of unauthorized use of cases easier. The ,ra-'-nt

law (Chapter 506, Florida Statutes) provides for relatively stiff

penalties, although it could be amended to make penalties more severe,

as several processors suggested.

Part of the difficulty with the oresenL legal procedures may stem

from a lack of understanding of the procedures. A simplified, step-by-

step outline appears in the Appendix D.

Processors plagued with continued and extensive unauthorized use

of cases by a particular firm or individual should consider using the

legal measures currently available, even though it is somewhat burden-

some. Opinions are that one or two successful u-r-:-'vit ions would do much

Friday, July 21, 2006 (3).max

to discourage unauthorized use. Care must be taken that the plaintiff

has -lean hands", i.e., is not guilty of similar misconduct.

Another major alternative wou- be to devel the legal and admisistra-

tive framework for a mandatory deposit system, which could be implemented

if ".' necessary I the dairy industry. Given the *:-t competitive

situation of the Florida dairy industry, a vol deposit system would

probably be unworkable.

A mandatory deposit -' is not a .'icularly attractive option

at present because of estimated costs. Plant labor, security, and adminis-

tration would be excessive for some firms. In addition, the industry

would have to bear the costs of 'ng the system to insure lance

by the state's 7.' stores and t1 processors. In addition, a

Sit system would entail considerable -.-- for retailers as well.

the total costs of a ':...t system would .; .ly outweigh the


Improved case i: ces, if adopted by more firms, will

de the necessary data with which a deposit system can be more accurate-

ly evaluated. In the immediate future, the Florida Dairy action

should continue to monitor the situation in other states that have or plan

to implement a mandatory deposit system in order to avoid their ."' lls.

Finally, FDPA should explore with the Florida ". '. of "culture

and Consumer Services the possibility of havi inspection station

1 check any trucks with cases for illegal interstate move-

ment. These inspection stations have been of service to Florida,

and as a result, groups have requested their assistance. Adding

another function may not be feasible, but it should be investigated.

Friday, July 21, 2006 (3).max

Improved Technology

Successful firms keep abreast of technological changes. Processors

and retailers should investigate labor-saving methods such as bulk

handling systems for new plants and stores. These systems apparently

offer greater security for cases and dollies as well.

Most current bulk systems still use cases and many dairy customers

will continue to need cases for dairy products because of their small

size. Transition to bulk systems will probably take a considerable

amount of time for lircer firms and may never become reality for smaller

ones. In view of the likely continuing need for cases, Florida dairy

processors should explore possible modifications or new types of cases

with manufacturers. In the short run, case costs may be reduced by

adopting "ugly" cases (drab, unattractive colors) and insisting on more

open sides and bottoms to make them less aesthetically pleasing and less

functional for holding small objects.

In the long run, public agencies such as universities and the United

States Department of Agriculture could also contribute research and

development for more efficient, less bulky or less expensive one-way



Dairy delivery cases are an important and necessary element of the

dairy processing business. As part of the delivery function, cases are

comparable to trucks. Few processing firm managers would condone the

unauthorized use of another firm's truck, but -."ly blatantly and

indiscriminately use cases belonging to others that may have an aggregate

value comparable to a truck. Their morally weak argument is "every-

body does it".

Friday, July 21, 2006 (3).max

If all processors made reasonable -. to use only their own cases,

one major source of l "ict and economic loss could be largely avoided.

The continued unethical use of others' cases could 7. : to ether question-

able business practices that would eventually require costly control

measures as well as tarnish the lic image of the entire in' '

Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max

Table A-1.--Dairy processing firms contacted

Area and firm

Pensacola, Tallahassee


Green Cove Springs

T. G. Lee
Meadow Gold

Orl ando
Winter Haven

West Coast


St. Petersburg
Fort Myers
St. Petersburg

Dade Co.
Farm Stores

M amil
Rivera Beach
Vero a '.ari.n

Friday, July 21, 2006 (3).max






,Jr) r t h ,i ,t.


Table A-2.--Retail firms contacted

a Stores in
Area and firm Typea Locationb Florida





A & P
Food Fair
Li'l Champ
Winn Dixie
Zippy Mart





West Coast

Li'1 General
Shop & Go


Farm Stores
Food Fair
Grand Union
Mr. Grocer

Riviera Beach


S = supermarket; C =

convenience chain.

bCorporate or regional office.

Friday, July 21, 2006 (3).max






Table A-3.--Dairy ji-cups contacted




Massachusetts, New Hampshire,
Rhode Island, Vermont



New Jersey

New York




Dairy Institute of California

Dairy Services of Indiana

Association of New England Milk
Dealers, Inc.

Michigan Dairy Foods Association

Mississippi Dairy Products

New Jersey Milk Industry

New York State Milk Distributors,
Metropolitan Dairy Institute

Ohio Dairy Products Association
Cincinnati Cooperative Milk
Sales Association
Cleveland Milk Foundation

Dairy Products Institute of

Wisconsin Dairy Products Associa-

Friday, July 21, 2006 (3).max



Table A-4.--Soft drink, egg and firms contacted


r .- la ;tling -

Southeast division
Mobile 'on
Local bottler

Royal Crown Bottling y

Jacksonville division
Local bottler

Pinebreeze Farms (eggs)

Sun City Dai Farms (^---)

Pride Bakery Division


S s,
Mobile, Alabama
Gainesville, Florida

Jacksonville, Florida
Gainesville, Florida

Jacksonville, Florida

Miami, Florida

Jacksonville, Florida

Friday, July 21, 2006 (3).max

---- --

Table A-5.--Case manufacturers contacted

Dairy case
Firm and location manufacturer

Seymour, Indiana yes

Belleview, Inc. (Helubell)
Belleview, New HI-m.iii-hire yes

Cumberland Case Comimn'.
(Orlando, Florida representative) yes

Erie Crate Company
Erie, Pennsylvania yes

Lustroware Corporation
Columbus, Ohio yes

Nestier'(Midland Ross)
Cinncinatti, Ohio no

Phillips Products Co., Inc.
Bartlesville, Oklahoma no

Piper Industries
Clarendon, Arkansas yes

Atlanta, Georgia yes

Friday, July 21, 2006 (3).max

Table A-6.--Fro;lnr-t lons of various types of delivery cases used by

of Cumulative
Plastic Wire Total Firms percent



(Total firms = 33)a

aOne manager that
the .-.i-riprn' t ions.

used both types of cases could not estimate

Friday, July 21, 2006 (3).max

I- ~--~--

Table A-7.--Presence of manufacture dates on cases

Dates on cases Number of processors Percent

Yes 21 62

No 13 38

Total 34 100

Table A-8.--Case exchange costs by size of firm, 1976a

Size of Average
firm costs Low High Totals




All firms

--------------------- Dollars -----------------

4,200 600 10,000 21,000

3,716 500 10.030 29,728

2 ..., 189 9,207 11,189

3,440 189 10,030 61.917

aOne firm was unable to provide data.

Friday, July 21, 2006 (3).max



Friday, July 21, 2006 (3).max




1. How many fluid milk suooliers do you have?
Supplier Deliveries per week Ca:


ses per

Weekly cases

2. On the average, how many dairy delivery cases would your tyoical
store have:
A. Containing product in the walk-in cooler?
8. Cnnt~irir:q product in display space?
C. Empty

3. How frequently, if ever, do produce departments in .iur stores use dairy
delivery'cases? (Hand card. Side A)
A. Never B. Rarely C. Usually D. Always

Dry grocery department?
A. Never B. Rarely

C. Usually

Meat department?
A. Never B. Rarely C. Usually

4. What is your estimate of the cost of a dairy delivery case
A. Plastic $ B. "ire $

Where are empty cases normally stored?

A. Inside B. Outside enclosure C.

Outside-ooen D. Other:

Friday, July 21, 2006 (3).max

D. Always

D. Always


5. Do drivers (milk delivery men) usually Dick up all emntv cases
belonging to their company whenever they make deliveries?
A. Yes B. No C. Don't know

6. Do drivers count dairy cases upon pickup?
A. Yes B. No C. Don't know

7. Do your store employees keep records of the number.of dairy
cases received from and returned to suppliers?
A. Yes B. No C. Don't know

(If yes, how?)

8. What other products are delivered to stores in re-usable cases or containers?
(Circle) Do any require deposits? (Circle) If so, how much?
Product Deposit Amount Where Stored?
Eggs Y N
Bread Y N
Soft drinks Y N
Beer Y N

9.. Milk case losses are substantial. Who do you feel is responsible for the

What measures would you recommend to reduce case losses?

Friday, July 21, 2006 (3).max

10. !We want to get your reaction to several alternative control measures
using a rating scale (give respondent card, 1=like very much, ?=dislike
very much).

What would be your reaction to:

11. Warning signs on open loading docks, outside case storage areas?

12. Outside fenced lockable enclosures?

13. Do you currently have sufficient outside enclosures for milk case
storage? (1)Yes (2)No

14. Joint public relations program for shooting carts, milk cases using
in-store signs, mass media

15. yolu'ntary inside storage effort Cy retailers

16. Given present store facilities, would voluntary inside storage be
A. Yes B. No C. Don't know

(If no, why?)

17. What would inside ;sorAcr' space cost your firm per snuare foot? $

What would be your reaction to:
18. A bulk delivery system which would eliminate carts with
larger racks or rolling carts? _

Case redesign: collapsible, to facilitate indoor storage

Friday, July 21, 2006 (3).max

20. State inspector to locate and recover illegally used cases
with salary and travel costs paid by the dairy industry.

21. A universal case nlan: a system where a service firm owns,
collects, and distributes cases to dairy processors charging
rental to participating processors.

22. A mandatory deposit system which would reouire that all
distributors collect a deposit on cases.

23. A voluntary deposit system which would ajow dlt. *.'nn.-.
to ::hj-re a deposit on cases if they desire.

24. H-L, much additional store employee labor would be required
if a deposit system were used?

(minutes ner delivery

total time per week ___ )

25. What other costs, if any, would a deposit system entail?

Friday, July 21, 2006 (3).max






1. What types of cases do you use? How many of
No. Percent Present cost



each type do you have in use?
Colors, markings, etc.


2. Advantages, Disadvantages:


3. Case Suppliers:


How would you describe your case loss situation? (Card A)
extremely serious serious moderate slight no problem
1 2 3 4 5

A. How many plastic (wire) cases have you purchased (lost) in recent years?

Fiscal/Cal. Plastic W ire
Year Bought Lost Bought Lost
to_ N. $ Value No. S Value I N. $ Value No. Value


Friday, July 21, 2006 (3).max




6s What has been your yearly total volume for these years?
What has been your maximum (peak) weekly volume?

Year Total Yearly Volume Maximum Weekly Volume
Yr (gals. or Ibs.) (gals. or Ibs.)


7. How frequently do you order additional cases?
8. Do you mark acquisition dates on cases? Yes No
9. .bat proportion of ,.ouL, cases would currently be in use at Plants(s) __
Dist. Centers) Trucks Customers __ ?
10. Ratio of cases to product movement:
11. How many cases are discarded every week due to damage or condition?
Plastic Wire Total
12. Do you 'currently participate in the state case exchange program? YES M0
[If yes] What have been your costs of the case exchange program?
1976 S 1973 1970
1975 1972
1974 1971

13. In addition to direct replacement costs, what other costs do you incur, if any,
due to missing cases?
Down time of processing plant S
Increased labor..............
Increased transportation.....

14. What type of delivery system do you presently use?
Service Drop [If drop], When did you adopt?
Convenience stores

Friday, July 21, 2006 (3).max



15. How many delivery routes do you have?_
Trucks? Drivers?
16. [If firm makes drop shipments]
How many routes trucks and drivers would you
need if you made all service deliveries?
17. What kinds of outlets are your main customers? How often, on the average,
do you deliver to these types of outlets? What volume of cases or percentage
of volume goes to each? What percentage of case losses occurs in each?
Deliveries/Week Volume Losses
Small groceries
Convenience stores
Other institutions

18. Based on your experience and oIbservations, who do you fee is responsible for
.U, LO J kt yVUZ LlUll ZI Uki U f ctJL I uu I I t j1ur
unauthorized use of cases? (Rotate, Card 8)
(Rate on a rating scale where 0 = extremely unlikely, 9 = extremely likely)
Produce merchants Supermarkets
Other dairy processors Convenience stores
Other food processors Independent groceries
Water bottlers Schools
Commercial fisherman Restaurants
Electricians Other
Apartment dwellers
College students
19. How do you currently try to hold down case losses? Which of the following
methods do you presently use? How would you rate the effectiveness of each
on a rating scale when 0 = extremely ineffective, 9 = extremely effective?
(Card C) Comments

Identification (name)

Member, Fla. case
Driver's case

Friday, July 21, 2006 (3).max

19. Continued.

Driver education
Company policy
Driver incentive plan
Retailer incentive plan


Deposit System

20. Is a voluntary deposit system (1) feasible or (2) infeasible for the Florida
21. Wh't is your reaction to a mandatory deposit system? (1 = like very much,
9 = dislike very much, Card D
22. Why?

23. Assuming that some type of deposit system could be designed, what size
deposit would you recommend? _

24. What would it cost your firm to implement a deposit -t.: e.?

Universal Case Plan: a system where a service firm owns, collects, and distributes
cases charging rental to participating members.

25. Do you feel that a universal case plan is (1) feasible or (2) infeasible?

Friday, July 21, 2006 (3).max

-26. What would you expect a UCP to cost per case per trip?
27. What is your overall reaction to a universal case plan?
(1 = like very much, 9 = dislike very much)
28. .'ndt is your reaction to a system which provides for a
state inspector who would locate and assist in recovering
cases, with salary and expenses to be paid by the industry?
Do you feel this would be (1) feasible or (2) infeasible?

29. What is your overall reaction to this system?
(1 = like very much, 9 = dislike very much)

30. What is your reaction to the present "writ of repievin"
which provides for retrieval of cases by the rightful
owner? (1) adequate (2) inadequate
31. [If inadequate], what further measures do you recommend?

(Rate, Card D, I = like....9 = dislike)
32. Warning signs on users open loading docks, outside case
storage areas?
33. 'Outside fenced, lockable enclosures?
34. Joint public relations -;r -, with retailers for shop-
ping carts, milk cases using in-store signs, mass media?

35; A voluntary inside storage effort by retailers

36. A bulk delivery system which would eliminate carts with
larger racks or rolling carts?

37. Case redesign: collapsible to facilitate indoor storage__

38. What other measures do you suge :t, if any, for control of case losses?
(also rate each, 1 = like very much, 9 = dislike very much)

Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max

Cincinnati, Ohio

There are very universal case pools operate in the U.S.

plan in Cincinnati was initiated in -, 1 ., by three

major firms, two of which have since merged. These ms account

for 40 to -- percent of area milk volume. Five area -' : chose

not to participate in the plan. The UCP is organized as a

Universal Milk '-'le Service Inc., a : 't corporation.

The three 'ci. ': firms were issued a case --:

based .- a "float" factor of 0.8 and their class I sa' : the

month immediately preceding the UCP start No initial inventor

was taken.

Maintenance funds are obtained r .. members on the basis of

volume. ,:ci are to contribute 5i per cwt. on

Class I milk and cwt. on Class II volume each month. In

addition, as members need new cases, ., an initial charge of

40 percent .. new case :. ce. This is currently $1.00. Th

5t and 24 assessments were initially determined on the basis of

costs incurred by the .-'cipati .' firms. The fees are subject t

periodic revision to keep revenues approximately equal to costs.

ts were .' for : and December, "'76. All new

cases are identified by color and name as belonging to the Univers

case .1.






Friday, July 21, 2006 (3).max

Firms that no longer want to :'"tici :' in the are ''led

to a case refund (actual cases only) based on a .* actionn

schedule as .. lied to their original case i. They do not

get credit for cases ordered -" joini : the zation. Cases

bel :i to the UC 1 are also iated over 5 years.

Case costs are currently estimated to be 0.5 cents -llon

of Class I sales, : -* :' ly what they were to the UCP.

According to the director of the --.-. a major 'lem is the

limited partici '"on. He feels that case costs could ibly be

reduced if more firms would ". Case collection -

have not been ----iably altered the ipating firms, though

firms have "ti."' .-' -. on their case accounting methods. The

UCP with ': '-:. participation : result in increased -" iency

for participati-- firms, but it does not solve the basic case loss


A Universal case :.- 1 would be "cularly ..CF 'ive in a market

which has a relatively high proportion volume which is not 'ticular-

ly "loyal", i.e., accounts which are under contract to the ::.'

bidder. Case pools can result in greater efficiency by eliminating

the excess case requirements that may result when such accounts move

one ir to another.

The market area where the 'versal case 1 is currently operat-

ing also has a case exchange program. A firm collects other firms'

cases from processors and returns them for 50 cents each. The firms

that belong to the '...'versal case 1 also Iicipate in the case

S program. .-- there are some 'rms in the area that do

not cooperate with either .

Friday, July 21, 2006 (3).max


This agreement made in the City of Cincinnati, Ohio, this day

of __, 19 by and between the UNIVERSAL MILK BOTTLE

SERVICE, INC., as Ohio Corporation not for profit hereinafter called


hereinafter referred to as "handler", to wit:

I. Whereas, UNIVERSAL provides various services for milk processors
and/or handlers, including the service of providing milk cases;

II. Whereas the "handler" desires to use milk cases owned and provided
by UNIVERSAL: and,

III. Whereas, UNIVERSAL desires to provide milk cases for the use of
the 'Handler".

Now, therefore, UNIVERSAL AND "handler" agree as follows:

1. "case", as used in this agreement, means a moulded or extruded
plastic container of four sides and with a bottom, designed
to hold milk and products of milk packaged in other than glass
containers, and by way of emphasis, cases or containers desiirn,-.
to hold milk and products of milk in glass containers are exclud-
ed from the purview of this agreement.

2. "handler", concurrently with the execution of this Agreement,
will furnish UNIVERSAL the following information and authority -

a. The number of cases now "owned by" "handler", being the
number of milk cases now under the control and possession
of "handler" and which "handler" has the right to use and
to possess; except, as a lesser number results from the
multiplication by .8 of the hundred weight of milk sold
in Class I by "handler" in the last full month of operation
prior to the signing hereof, as such information is furnished
by the Market Administrator for such month. The smaller
number shall be the number of cases i.rwn.ri by" the "handler"
for all of the purposes of this agreement.

b. The "brand" or other identifying mark or insignia used by
"handler" in indicating ownership of milk cases acquired
from other than l'UN]E ',AL.


Friday, July 21, 2006 (3).max

c. "Agency" authority to "register" the "brand" or other "'nart"
or "insignia", of the "handler", as provided in Sec. 1329.41
et seq. ORC, except as "handler" may have here-to-fore made
such a registration; and to pick-up (take possession) milk
cases carrying the brand, mark or other insignia of "handler"
wherever they may be found except as "handler" is in
control and use of such milk cases.

c. Direction to the appropriate office of the "I.irk-t Administrator
to furnish to UNIVERSAL the pounds of Class I and Class II
sales of "handler" for the month.

2. a. UNIVERSAL will provide milk cases to the order of "handler"
on order placed on and after 1975, and such
order will be delivered to "handler" place of business
days after the placing of such order for milk
cases with r'NIV']RSAL.

b. UNIVERSAL will endeavor to recover milk cases of "handler"
and other similarly situated, as the same can be determined
by the 'L.rrad", "mark" or other insignia or sign of owner-
ship, wherever they may be found, except as such cases may
be under the control and use of "handler", as in part 1(c)

3. a. "handler" agrees to pay UNIVERSAL for milk cases ordered
from UNIVERSAL, as aforesaid, at the rate of 40% of the
cost of such cases) (as in part (b) of this part provided),
payment to be made to ..'1rVERtiFAL by "handler" within ten
(10) days of the receipt of an invoice from UNIVERSAL by
"handler"; and, additionally, "handler" shall pay monthly
to UNIVERSAL, as part of the consideration for the services
of UNIVERSAL, as herein specified, as follows:

(i) 5t per cwt on the Class I sales of "handler" in
the month, as such information is supplied by
the appropriate office of the Market Administrator,
as in Section 1(d), hereof provided, and,

(ii) 2t per cwt on the Class II sales of "handler" in
the month (supplied as in 1(d) above).

(iii) The monthly payment as in parts (i) and (ii)
hereof provided shall be made by "handler" as
aforesaid, to UNIVERSAL not later than ten (10)
days following the furnishing of the Class I
and Class II sales oni~rl' for the month to
UNIVERSAL as in part 1(d) hereof required.

(iv) Provided, however, that O:ir.neint rates, as set
forth in parts (i) and (ii) hereof, shall be
reviewed by UIV','L::.AL not less often than once
each year and any modification or adjustment

Friday, July 21, 2006 (3).max

of such rate shall be made known to "handler"
not less than 120 days prior to the anniversary
date of this agreement, except as the parties
hereto may otherwise agree.

(v) and provided further, that the obligation of
h-incler" to U:VEPiAL, calculated as in this
part set forth, shall be subject to a credit
to "handler" on product shinnpped in a '.- s)"
furnished by a third party not a party to an
agreement with UNIVERSAL (see part 5 of this
agreement) or as may be shipped in paper, wood,
or metal containers, not ",e;' provided by
UNIVERSAL as herein provided; such credit to be
taken on the invoice from UNIVERSAL TO "handler";
and, "handler" ships product subject to such
credit, generally, as follows:

(if none, so indicate)

b. .ilIVEI2'L shall make known to "handler" its "cost" of
a casess, as the term is used in part (a) of this part.

c. "handler" acquires no ownership or right or duty of
ownership in milk cases "ordered" from and received
from UNIVERSAL and for which payment is made to
UNIVERSAL as in 3(a) hereof provided except:

(i) The right to use and to possess said cases
for the purpose of storing, holding and
delivery of milk products.

(ii) The right to recover and possess said milk
cases against the adverse claim of any party
except UNIVERSAL, and even against i" ;I'VER'dAL
as long as payments are made in accordance
with the provisions of part 3(a) hereof.

d. I.iVE'.SAL shall hold and meet the duty of ownership
in said milk cases, except that of "use" and ',-.:::....ion"
which may be in "handler" as a result of making payments
of money as in part 3a, 3a(i) and 3a(ii) provided, and
as aforesaid.

Friday, July 21, 2006 (3).max

4. a. is agreement shall continue in effect ... .- to
year, bei a one (1) year contract renewable automatically
:-' as cancel" '. and cancellation and termination
can be had by either .rty on the gi.'. of notice in
writi to the other .. of the intention to terminate
and giving such notice in writing not less than ninety
( ..) days prior to theanniversary date of such contract.

b. On termination by either the rights of
to milk cases which he be usi or which it may
have in possession shall be determined as follows:

(i) The .-- of cases by
as provided in .:: 1(a) shall be reduced '
20% for year that '- 1 and UNIVERSAL
have been ties to this contract. (Example:
At the end 5 years, 1 would "own"
no milk cases).

(ii) number of milk cases by '
the calculation reduction as in
t (i) of this part shall be furnished to
"-.. by UNIVERSAL whether,
marked or bearing the ia of 1. '
is immaterial to this agreement, .. there
s to be an -'. in furnishi .milk
cases so marked, to the extent available.

(iii) milk cases in the use, possession and/or
control of in excess of the number
"-.. .' by as calculated according
to the provision of part (i) of this ,
shall be returned to

5. It is and understood by and between .. AL and
that UNIVERSAL has more than one agreement of
this type, of the same terms and 'sions : for
difference of name of 1- number of milk cases
listed, etc., and that UNIVi. will be .. 'ding
service to all with whom it contract and that any
-.y, a on this or another such .,
might receive a milk cases) bearing the' .... mark,
or insi .-'a of a "hand'. on another such agreement
with UNIVERSAL and, a ,. r" on another such
t with UNIVERSAL receive a cases(s"
beari : the brand, mark, or other insignia ', "ler"
herein, and "cases" so furnished and marked or branded
is not a violation of this ..; ; is immaterial to
this :- .-. -. or to any other like it; and in no way
diminishes, enl -. upon, or alters : duties
imposed by the agreement or others like it.

Friday, July 21, 2006 (3).max


In Witness whereof, Witnesseth the : "te signatures, binding
S rties hereto to the ':sions and duties of this .
affixed on the day and year first aforesaid.


Friday, July 21, 2006 (3).max



Friday, July 21, 2006 (3).max


The following is an outline of legal procedures that are presently

available to the Florida dairy industry for controlling unauthorized

case use. As in all legal matters, extreme caution should be exercised

when using these remedies, and a competent attorney consulted prior to

taking action.

I. Statutory Remedies

A. Florida statutes (506) stm .iped on marked bottles and boxes.

i. Obtaining possession of containers (506.37).

a. The owner may take possession of any such container
and shall not be liable in damages therefore, on for
any trespass arising out of taking possession.

b. Under common law, trespass would be involved but for
the provisions of F.S. 506.37.

(1) An owner is entitled to enter the premises of
another for the purpufis of demanding the return
of his property. He may use whatever force is
reasonable and necessary in self-defense of his
person if he is physically attacked by the owner
of the premises, (Arlowski V. Foglio, 135 Atl.
397, 1926).
c. F.S. 506.37 essentially permits self-help but there
can be no breach of the peace in so doing. Where
there is a reasonable likelihood of physical violence
or opposition the search warrant route should be used.
(See next major section.)

d. Statutory trespass (810.08).

(1) Whoever, without being authorized, willfully
enters or remains in any structure or having been
authnri7Pd is warned to depart and refuses to do
so commits the offense of trespass.

(a) F.S. 506.37 provides a statutory exception to
the above rule concerning trespass.


Friday, July 21, 2006 (3).max

(b) However, where there is a 3tr--nq possibility
of a breach of the peace occurring (if the
owner does much more than merely request the
return of his containers), the owner should
refrain from relying on the statutory pro-
tection of 506.37.

II. Search Warrant

A. Steps involved (506.03).

1. When any person shall make an oath

2. before the county court judge

3. that he has reason to believe and does believe that his
containers are being unlawfully used by another person

4. the judge shall thereupon issue a search warrant signed
by him

5. to the sheriff or r-in other person authorized by law to
execute process

6. commanding the officer to search immediately the r-'n.o't'v
described in the warrant for theproperty specified and
bring the same before the court.

B. Court Proceedings

1. Where such containers are found to have been unlawfully
held the county court judge who issued process shall
proceed to trial and judgment.

2. Upon rendering judgment, the court shall award possession
of the containers so taken under such warrant to the
owners of the containers.

III. Replevin (F.S. 78)

A. Right of replevin (78.01).

1. Any person whose property is w.- 'rinlfully detained by any
other person may have a writ of replevin to recover such

B. Procedure for obtaining pre-judgment writ.

1. Plaintiff shall first file with the clerk a complaint
reciting the following information:

a. Description of the claimed property which is sufficient
to make possible its identification along with a state-
ment of its location and approximate value.

Friday, July 21, 2006 (3).max

b. Statement that the plaintiff is the owner of the claimed

c. Statement that the property is wrongfully detained by
the defendant al-,ni: with a statement of the means by
which the defendant came into possession of the con-
tainers, as well as, a statement of why the defendant
is wrongfully detaining them.

d. Statement that. the claimed p:pe--ty has not been taken
for a tax assessment.

e. Statement that the claimed property has not been taken
under an execution or attachment against the property.

2. Court will examine the filed complaint, and if, on the basis
of the complaint and further showing of the other relevant
evidence in support of it the court finds that the defendant
has waived his right to be notified and heard, the court shall
promptly issue an order authorizing the clerk of the court
to issue a writ of replevin,

a. Waiver by the defendant can be in terms of:

(i) Engaging in any conduct which clearly shows that
he wants to forego his right to be heard.

(ii) Failing to appear at the duly scheduled hearing.

(iii) Any writing signed by defendant that he wishes
to forego the hearing.

3. If the court finds that the defendant has not waived his
right to be notified and heard, the court shall pr-c-rptly
issue an order to the defendant to show cause why the
claimed property should not be taken.

4. If, after serving a show-cause order the court finds that
the defendant has waived his right to be heard, it shall
dispense with the hearing on the show-cause order and promptly
issue an order authorizing the clerk of the court to issue
a writ of replevin.

5. If the court finds the defendant has not waived his right
to be heard on the order to show cause, the court shall
at the hearing consider the affidavits and other showings
made by the parties .:ilp-riring and make a determination of
which party, with reasonable uro-bability is entitled to
the possession of the claimed property pending final

Friday, July 21, 2006 (3).max

Full Text
xml record header identifier 2009-01-05setSpec [UFDC_OAI_SET]metadata oai_dc:dc xmlns:oai_dc http:www.openarchives.orgOAI2.0oai_dc xmlns:dc http:purl.orgdcelements1.1 xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.openarchives.orgOAI2.0oai_dc.xsd dc:title Dairy delivery case losses in FloridaIndustry report - Florida Agricultural Market Research Center ; 77-1dc:creator Mathis, Kary, 1936-Degner, Robert L.Florida Dairy Products Association.dc:subject Dairying -- Costs. -- FloridaCrates -- Costs.dc:description "A research project conducted for the Florida Dairy Products Association, Inc."b Funding FAMRC industry report ;dc:publisher Florida Agricultural Market Research Center, Institute of Food and Agricultural Sciences, University of FloridaFlorida Agricultural Market Research Center, a part of the Food and Resource Economics Dept., Institute of Food and Agricultural Sciences, University of Florida,dc:date 1977dc:type Bookdc:format xi, 87 p. : 2 forms, 1 map ; 28 cm.dc:identifier (aleph)ACF7028 (notis)10809299 (oclc)dc:source University of Floridadc:language English


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max


Friday, July 21, 2006 (3).max

PAGE 100

Friday, July 21, 2006 (3).max

PAGE 101

Friday, July 21, 2006 (3).max