Manage Your Truck Fleet to Reduce Food Waste

For grocers and their food distribution divisions, food shrink is a continuing issue that cuts into profits and contributes to food waste. “Food shrinkage” refers to spoiled or wasted products from distribution to a grocery store. Consumers today are also concerned about sustainability efforts, placing additional pressure on grocers and distributors to make improvements in their overall operational strategies.

In the U.S., food spoilage and waste are estimated to be between 30% and 40% of the overall food supply, according to USDA. For their part, grocers have traditionally relied primarily on inventory management solutions to reduce fresh food waste; however, new solutions are needed because, in addition to a greater focus on sustainability by consumers, the continued problem of food shrink is costing food retailers more than $52 billion annually.

Industry players are having a difficult time reducing this cost. Reducing shrink can lower operating costs by 15% to 20%, or more, Martin Gooch, PhD, chief executive officer of Value Chain Management International, told Produce Business. In retail, a 1% reduction in shrink helps improve the financial bottom line equivalent to a 4% or higher increase in revenue, simply because organizations reduce the subsidies of ineffective operations.

Food shrink also adds financial pressure as grocers must restock their shelves. More than 60% of grocers say they have had to significantly increase fresh inventory to keep up with demand, according to a whitepaper by Shelf Engine, a ­Seattle-based technology firm focused on food waste.

Improving On-Time Deliveries to Reduce Spoilage

There may be other ways to reduce food shrink, and a closer focus on improving on-time deliveries among food distributors may help. Many grocers leverage private trucking fleets for their grocery delivery and, according to the 2021 National Private Truck Council’s Benchmarking Survey Report, 68% of fleets measured on-time performance for 2021, versus 82% in the prior year.

Improving on-time delivery rates alone could have a profound impact on saving food from spoilage. In many cases, trucks arrive late to a store due to weather or traffic delays; however, when older trucks remain in a distributor’s fleet, maintenance and repair (M&R) problems, and other mechanical breakdowns can cause more serious delays, further damaging delicate produce that needs to arrive at the store on time.

When isolated down to an aging truck fleet, organizations aren’t just losing billions because of food shrink. These older trucks can further erode a grocer’s or food distributor’s bottom line when M&R costs and lease structures are factored in.

Older Truck Fleet Means More Spoilage and Additional Expenses

Distributors and transportation fleets have had their eye on improving truck M&R in their operations for years, especially since operational expenditures can significantly add up over time on aging and older trucks. These companies believe it’s such a big problem that M&R was the largest reason why fleets renewed, replaced, or upgraded their trucks according to the most recent industry benchmark report from Fleet Advantage.

M&R costs on a 2016 sleeper model-year for grocer distributors total $25,392, compared with $2,244 on a 2023 model-year truck, which provides a savings of $23,148. Across a fleet of 100 tractors, this amounts to $2.3 million.

These cost savings become even more significant when you look beyond the typical M&R expenses, including tires, tubes, liners, and valves, and include preventive maintenance measures, brakes, expendable items, exhaust systems, fuel systems, and more. The older the truck, the costlier the repairs become. What’s more, technician time becomes more expensive, too, because fleets end up requiring more technician time for service.

Lease Agreements for Your Truck Fleet

Aside from the specific costs involved with M&R on older trucks, distributors are also paying closer attention to the type of lease agreement they have (full service versus unbundled lease [UBL]), which can also dramatically impact the expenses involved with maintaining their fleet of trucks.