It takes a lot for grocers to keep on truckin’.
Managing a truck fleet is one of the biggest challenges in grocery logistics. It involves complex issues that apply to all truck fleets, such as the difficulty of attracting and retaining drivers, as well as others that are specific to food retailing, such as managing the cold chain.
The challenges vary depending on where you are in the supply chain and who owns the trucks, but regardless of the specifics, the stakes are high for all involved parties.
Stores operate on ever-narrower delivery windows, seeking to use floor labor as efficiently as possible. Bottlenecks in loading or delivery can waste driver salaries and even food—all of which wastes money.
Many grocers are taking advantage of fleet-management systems (FMS) software, which can systematize and smooth out the rough spots in a delivery schedule. They also can keep track of maintenance, interface with inventory and other software, and help manage drivers. By analyzing data from onboard hardware, they can record drivers’ hours and even help evaluate their performances.
Grocers have the same options as all businesses that use trucks: own, lease or hire. Michael Hane, senior director of Chainalytics LLC, a supply-chain intelligence and consulting firm, says the majority of grocers own their own fleets, but that can vary according to what they’re hauling, and on which leg of the journey. Inbound trips from suppliers, for instance, are more straightforward and have less potential to go wrong than outbound trips to stores, so it might make more sense to hire a third-party hauler for those (or pay the supplier to do it, if that’s an option). In addition, outbound trips with little or no backhauling are sometimes candidates for third-party carriers, especially with non-refrigerated goods.
But a lot of grocers want the flexibility and the security of owning their own fleets, even if it costs more, Hane says. “You do have a lot of capability sitting around in your fleet,” he says. “You might be overpaying for certain stuff, but you do have not as much risk of failure if you have that fleet asset, so a lot of people use it almost like a comfort blanket.”
Hours or Miles
One of the biggest differences between private truck fleets and hired ones is that drivers for the former usually get paid by the hour; for the latter, it’s by the mile. This gives private fleet owners an added incentive to make sure that their trucks get loaded efficiently, says Dan Murray, vice president of the American Transportation Research Institute.
“It seems anecdotally that they’re more efficient with their own trucks and drivers, for a couple of reasons,” Murray says. “Most private fleet drivers are not paid by the mile, so when you’re paying your own employees by the hour and they’re sitting around doing nothing, that shows up pretty dramatically, almost in neon lights, as a major inefficiency that has to be addressed.”
Drivers for hired carriers, on the other hand, can find themselves sitting for hours at a grocery warehouse or distribution center, waiting for a load, he says; many have responded by assessing customers a surcharge for excessive wait times.
Private fleets have another advantage: It’s usually easier for them to attract and retain drivers, because they make shorter trips and don’t need to spend a lot of time away from home.
“Definitely, it’s a lot more attractive for the drivers to drive for a private fleet where you’re going to get home, if not [literally] every day, pretty much every day,” Hane says.
But private and for-hire fleets have similar issues when it comes to driver performance. They need to make sure the drivers are where they’re supposed to be, doing what they’re supposed to do—but not for too long. The latter is mandated by federal regulations that limit driver hours for safety reasons. As of last December, most trucks must have on-board electronic logging devices (ELDs) that keep track of driver hours. Federal law limits those hours in several ways; for instance, after driving for 11 hours, drivers must have a break of 10 consecutive hours.
Data From the Source
ELDs can be used for more than logging hours. Along with video cameras, GPS locators and other onboard devices, they generate data that can be analyzed by fleet-management systems to identify long-term trends.
One of these is driver performance. Onboard devices can indicate when a driver is speeding, engaging in frequent hard braking or abrupt lane changes, or otherwise displaying bad driving habits. Not only is this a tool to evaluate driver performance; in some cases, combined with data such as absenteeism, it can help with retention by indicating drivers who are dissatisfied and liable to quit soon.
“If you see an increase in driving behaviors like harsh breaking events or safety concerns that are out of characteristic for a specific driver, that can be a flag,” says John Anderson, director of sales engineering for Omnitracs, a vendor of transportation management software and hardware. “Generally, it indicates more aggressive driving, and that can be an indication of driver frustration, which can be an indication that the driver is at risk of leaving.”
When used in conjunction with more comprehensive platforms, FMS software can also help with wider planning. Software packages from vendors such as Omnitracs, Paragon and Lytx can input parameters such as customer addresses, delivery quantities, cargo perishability, time windows, vehicle sizes, plus driver shifts, records and preferences, and come up with optimized delivery schedules. They also can analyze historical data, such as delays caused by bottlenecks, for ongoing revision and improvement of scheduling.
Some systems can interface directly with grocery stores in certain ways. Paragon Live, for instance, has a module called Live Management that allows up-to-date arrival times to be displayed as HTML pages on any device. That means a list of deliveries, with accurate ETAs, could be displayed on a large screen in the back of a store to allow the relevant store staff to be available when the delivery arrives.
As fleets become larger and more complicated, it pays managers to look into software solutions, Hane says: “If you’re just doing pen and paper today, or pins on a map, and you have let’s say more than two or three stops on a truck, the software probably will find more efficient ways to do things.”
H-E-B’s Extremely Impressive Fleet Management
One recent example of how the flexibility of a private fleet can help cope with extreme circumstances came when Hurricane Harvey struck the Houston area last year. The storm knocked out most of 80 H-E-B stores in the Houston area. But the San Antonio-based retailer was able to use its private fleet to forge through bottlenecks and get the stores back in business as soon as possible, at one point actually taking drivers by helicopter to the company’s headquarters in San Antonio. H-E-B’s efforts won it the Private Fleet Owner of the Year award from Fleet Management magazine.
In addition, H‑E‑B provided relief to storm‑torn communities in the wake of Hurricane Harvey by mobilizing its emergency response team to disaster response units (DRUs) with its mobile kitchen to the H‑E‑B at 1505 E. Rio Grande in Victoria, Texas.
The convoy of more than 15 vehicles, which includes the DRUs—which are fully equipped with an H‑E‑B pharmacy and mobile business services unit, which allows displaced residents to fill prescriptions, cash checks and pay bills, as well as have access to an ATM—two H‑E‑B mobile kitchens, water and fuel tankers and H‑E‑B trailers, delivered much‑needed relief supplies and services to the communities in the affected area. More than 100 H‑E‑B partners volunteered to accompany the convoy and assist affected residents. Supplies included food, water, ice, dry goods and medicine.