How to Cut the Cost of Food Transportation

Whether it’s ambient, chilled or frozen, food needs to be transported as quickly as possible to ensure that grocery shelves remain full and food service establishments can always offer diners everything on the menu.

Food logistics typically requires frequent deliveries each week, or in the case of large grocery stores, multiple deliveries each day. With margins already low, cutting the cost of transportation is a high priority for every operation that ships food products.

Combining regular delivery schedules with the proper handling requirements required by food products makes for complex truck routing plans. When you add in specific store nuances, such as delivery door restrictions, 30-minute drop-off delivery time windows, Hours of Service regulations and growing congestion, it gets a whole lot more complicated.

Our customers vary enormously from large food retailers like Asda-Walmart to niche food producers like George’s Chicken, but all of them operate in an environment where missing a deadline doesn’t just lead to an unhappy customer.

Food transportation operations largely manage truck routing plans with multi-drop schedules and tight delivery windows and turnaround times that drivers must adhere to in order to eliminate the domino effect if time slots are missed. Like any transportation operation, if a truck is delayed at one stop, subsequent stops will also be delayed. But for these operations delayed deliveries can result in fines, food having to be destroyed, or empty shelves and lost grocery or food service customers.

For large grocery stores that are dependent on many deliveries each day this is even more complicated. For example, one of our clients operates 30-minute delivery windows where trucks have to pull up and unload at the dock within this time, or fines may be administered. Any delays – such as workers taking too long or not having enough resources to unload or if there is another vehicle at the dock door causing the driver to find another unloading dock or wait in line – can cause a significant ripple effect of lost productivity and time.

To overcome this, transport planning teams often introduce slack into the schedule – the addition of extra time built into the transportation schedule to buffer delivery times. This helps ensure on-time performance measurements are met, staff are utilized properly and food products arrive for display on shelves as quickly as possible. However, slack costs money by adding time to schedules, which means that drivers and trucks are not as fully utilized as they could be.

While basic truck routing plans take trucks, drivers and locations into consideration, more advanced routing and scheduling systems incorporate all of the constraints and variables that apply to each delivery including restrictions dictated by the load and the individual delivery location. This reduces the amount of slack that needs to be built into the plan, helping transportation planners to better meet time windows and cut the cost of food transportation.

If you’re looking to improve the efficiency of your food transportation, here are 9 ways that routing software can help:

1. Reduce fuel costs by making the largest delivery first – While many stores will require the same delivery window each time, some delivery operations may want to be able to specify deliveries by size. Creating a rule that specifies per rigid vehicle group and trailer group that the largest delivery/collection must be visited first means that heavier items can be offloaded as quickly as possible reducing fuel consumption for the rest of the journey.
2. Manage deliveries and collections in the same plan – Empty running can be another big cost. If you are collecting packaging for recycling or empty containers for refill then using truck route planning tools to ensure that collections can be scheduled on return journeys maximizes the utilization of drivers and vehicles.
3. Improve communication with back of store arrivals boards – Integrating your truck route planning software with vehicle tracking software allows you to compare the real-time location of your vehicles against the plan. You can then use the available data to provide store managers with up to date arrival times so that they can improve store efficiency and ensure the vehicle is turned around promptly.
4. Manage time of day or day of week variables – School drop-off/pick-up times, large sporting events or local regulations that limit when trucks can travel through residential areas can all make planning feasible routes more manual and time consuming. Automatically applying legitimate route deviations at specific times of the day, week or month by truck type to their transportation plans, reduces the level of manual intervention required by the planner. Drivers can better meet delivery schedules while adhering to road restrictions and regulations, ensuring on-time deliveries and improving customer satisfaction.
5. Manage multiple vehicle types – Companies like Stewart’s Shops have a large number of variables that affect delivery to each store. Truck route planning software that allows planners to layer rules for every truck on top of the rules created for each delivery location and delivery type, ensures that all routes remain efficient.
6. Plan by compartment to streamline your planning process – Not all foods are compatible when it comes to transportation. Using a truck route planning tool that allows you to specify product compatibilities, streamlines the planning process and prevents incompatible products being mixed in transit. The same tools can also be used to order the off-loading sequence by compartment.You can plan for the sub-division of goods into compartments on trailers and rigid vehicles, enabling effective monitoring of segmented collections and deliveries. An advanced routing and scheduling tool will allow for multiple units of measure and caters for deliveries, collections and transfers.
7. Use mapping data to cut slack further – Using more detailed mapping tools like truck attribute data helps you build more accurate transportation plans. For example, historic road speed data improves the accuracy of your journey times which reduces the slack that needs to be built into the plan. Adding truck attribute data to the planning process ensures that routes remain feasible for all trucks, irrespective of their height, width, length and weight.
8. Offer customers later order cut-off times – Using a truck route planning tool that has the ability to optimize very complicated transport plans faster means later cut-off times can be offered. This is particularly useful for wholesalers delivering to small convenience stores.
9. Proactively warn customers of delays – Telling customers about unexpected delays doesn’t cut costs but it does improve customer service. Proactively telling a customer by phone, email or SMS that their delivery will be later than planned allows them to manage resource on site.

Our customers in the food sector have seen a lot of change in the last few years as consumers have adopted smaller more regular shopping habits and increasingly take advantage of click and collect, or home delivery services.

Having the ability to meet increasingly tight delivery schedules is key to survival in this highly competitive market. We are continuously refining our software to help customers in this sector cut their food transportation costs. For example, the latest version of Paragon’s truck route planning software includes an auto correction tool that will refine the exact positions of delivery locations, based on actual tracking events, to automatically improve the accuracy of plans and arrival times communicated to customers.

If you would like to find out more about how our customers are working with Paragon, why not listen to Martin Brower or Warburtons explain how they use Paragon’s truck routing software to maintain the highest levels of customer service.