US Foods adapts delivery routes to changing ordering patterns

Diving Brief:

  • US Foods has launched the first phase of a delivery route optimization initiative as it adapts to changing customer ordering patterns, said interim Chief Commercial Officer and CEO Andrew Iacobucci said during the company’s first-quarter earnings call.
  • The first phase focuses on identifying lost miles in its current routing system and, in the coming months, remapping routes so that customers are routed to the most efficient fulfillment center based on mileage and service,” said Bill Hancock, executive vice president and chief supply chain officer.
  • In phase two, the company will work to replace its current system with dynamic routing technology, according to Iacobucci. The initiative has already resulted in approximately 10% improvement in checkout volumes per mile in the company’s core markets compared to the same period in 2019, he said.

Overview of the dive:

U.S. Foods’ routing technology upgrade will allow it “to provide dynamic delivery windows and real-time visibility to a customer,” improving service and further reducing miles and costs, Hancock said during of an earnings call in February. The move comes as US Foods seeks to maintain on-time delivery while dealing with a rebound in demand and serving new customers in new locations.

“As Hospitality and Healthcare have improved from a macro-recovery perspective and our expected new business is delivered, combined with accelerated restaurant cash growth, we expect legacy volume to strengthen at levels of 2019 later this year,” said CFO Dirk. Locascio said during the call last week.

Dynamic route optimization can help carriers maintain operational efficiency and consistency during periods of volatile demand, with the added benefit of reducing emissions by reducing idling. The technology has proven useful for businesses that have struggled with inconsistent load volumes and rates since the COVID-19 pandemic took hold.

“The difference between the pre-[COVID-19] and currently we are looking to use our tools to route shipments more dynamically and be more creative in how we schedule versus some level of static routing,” said Amos Rogan, LTL Operations Manager at Averitt. Express, at Transport Dive in 2020.

Even if US Foods eliminates wasted miles, it will still need drivers to fuel its fleet of about 6,500 trucks. Hancock said the challenge of hiring Class A drivers “isn’t going away for anyone anytime soon”, prompting the company to invest in its own training initiatives.

US Foods is offering to have applicants without a Class A license undergo driver training before hiring them, Hancock said. The company has also rolled out a proof of delivery device for its current drivers to help them board faster and increase productivity, he added.

This story first appeared in our sister publication, Transport Dive. Register here.

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