Over the last couple of years, as the Covid pandemic has changed the way consumers interact and shop with retailers, brands, and consumer goods companies, last mile delivery has become increasingly important. Customer expectations for expedited delivery are becoming more commonplace, in both the B2B and B2C world. And as the lines continue to blur between B2B and B2C, and the model expands to a B2B2C focus, order fulfillment processes become more complex. I recently interviewed Al Contreras, Innovation Manager at Gordon Food Service to understand how the company handles last mile deliveries, the role visibility plays, and how a last mile solution has impacted their business.
Gordon Food Service (GFS) began its business as a butter and egg delivery service in 1897. Today, GFS delivers to restaurants, the healthcare industry, and schools across the Midwest, Northeast, Southeast, and Southwest regions of the United States and all across Canada. GFS is the largest family-operated broadline food distribution company in North America, employing 19,000 people with an annual revenue of $12.9 billion. The company uses FarEye, an intelligent delivery logistics platform, for its last mile delivery solution.
GFS provides service in three distinct areas: wholesale, retail, and truck delivery. Prior to using FarEye, there was no van delivery service in place. Deliveries were made from their distribution centers via their owned fleet of 28- & 53-foot trucks, and the occasional van delivery. These deliveries were made on a weekly basis to restaurants, healthcare facilities, and schools. If the customer needed small food deliveries between their weekly or twice-a-week deliveries, they had to go to local grocery stores or club stores.
GFS has a network of brick-and-mortar grocery stores. As a new offering to their customers, GFS wanted to be able to offer van deliveries from their brick-and-mortar stores to fulfill needs outside of their weekly distribution center deliveries utilizing their own vans. Same-day van deliveries enabled GFS to keep customers in their ecosystem. Businesses could order same-day deliveries from their 175+ Gordon stores rather than running to a local grocery for any last-minute needs.
This was a new initiative to solve their clients’ needs between distribution center deliveries through lastmile van delivery from their brick-and-mortar stores. GFS worked with FarEye to implement a digital last mile solution with the ability to centrally control, monitor and optimize routing and instantly track and trace orders.
Adding this last mile capability allows GFS the ability to satisfy their customers’ needs both weekly and daily, and gives them a competitive advantage over their competitors who do not have their own physical stores. With FarEye’s last mile solution, GFS now offers customers individual items delivered the same day from their stores. There is no need for businesses to take a trip to a local grocery store or wait for a weekly delivery to replenish items.
GFS began working with and went live with FarEye’s last mile delivery solution in 2020. FarEye’s last mile delivery solution gives GFS the ability to have capacity planning with order management. Managers can see orders in real-time and where they are in the delivery process. Drivers are routed efficiently through a driver app using optimized routes in order to hit target delivery windows. Customers are also able to receive real-time updates as to where their order is through a customer app that uses track and trace.
Supply chain visibility, especially as it pertains to accurate ETAs is becoming more important across the industry. GFS was able to offer their customers more choices like a convenient three-hour delivery window time and the ability to be consistent and on-time in the chosen delivery window.
As with any new solution implementation, there are concerns from a budgetary and timing standpoint. GFS worried their software might be difficult to integrate with FarEye’s solution. They wanted the integration to proceed quickly and smoothly so items like addresses would not need to be entered manually into FarEye’s solution. GFS found they were able to easily exchange data and integrate their software to take advantage of FarEye’s routing capabilities. The implementation remained on time and within budget.
In the end, it all comes down to results. By adding digital last mile capability, GFS grew their sales in 2021 by 8.6 percent over 2020. Last mile delivery from stores accounted for 36 percent of that growth. One GFS store rolled out van delivery in 2021 and increased that individual store’s sales by 54 percent over 2020. Additional results that GFS has seen through utilizing FarEye’s digital last mile capability include:
- Grew market share during a time of market disruption
- Increased efficiency through intelligent routing
- Offered same-day service with delivery in time windows chosen by clients
- Created omnichannel fulfillment utilizing last mile
- Increased sustainability through less miles driven with more efficient vehicles
Looking towards the future, GFS sees new opportunities with FarEye. One specific area the company is exploring is crowdsourcing gig drivers to expand their driver pool using FarEye’s technology. Drivers are capped at 40 hours per week, but the vans have more capacity. Adding crowdsourced drivers would add the ability to expand the hours the vans could be on the road.
Additionally, GFS is looking to tap into FarEye’s DSP community to expand capacity. Collaborating with FarEye’s DSP’s already running FarEye’s last mile solution will help Gordon Food Service grow their fleet of delivery vehicles for additional stores.