With supply chain and delivery logistics costs exerting pressure on the overall operating costs of retailers, they are increasingly relying on logistics companies that integrate tech into the mix to manage costs.
Last mile cold chain delivery business HDS which counts Woolworths, Marley Spoon, 7-Eleven and Metcash, among its clients in Australia is reported to be using AI routing technology and warehouse convergence protocols to reduce the number of trucks on Australia’s roads.
The tech is believed to be combining key consumer goods at the warehouse level to reduce the number of delivery vehicles on Australia’s roads.
Traditionally, a single service station would receive up to 100+ separate deliveries per week, each dropping off a small box of goods from various suppliers.
HDS brings those multiple deliveries together at the depot level and then sends a single truck to deliver an entire pallet of combined stock.
FMCG businesses are working together to share transport costs earlier on in the supply chain with the supplier and retailer, both winning when they do so effectively.
Additionally, as HDS points out, the move also works to directly connect the supplier with the retailer and cut out the distributor margin which can be up to 40 per cent.
Delivery costs are reduced due to the economies of scale achieved by combining stock at the warehouse prior to delivery, rather than at the store level, utilising its fleet of 450+ refrigerated vehicles ranging from 2 tonne to 22 pallet trailers.
Fewer trucks are also a necessary response when you consider Australia’s massive truck driver shortage. A recent survey from the International Road Transport Union reveals there are 26,049 unfilled truck driver positions in 2024, and the numbers are expected to worsen.
“We are using cutting-edge technology to fundamentally shake up Australia’s archaic transport industry by finding much smarter ways to combine deliveries and simplify the entire FMCG supply chain,” said HDS co-CEO Shane Hodskiss.
Beyond retailers, HDS also says that it covers 85 per cent of the country when it comes to home deliveries.
Here too, tech is being implemented wherein a customer can take a photo or video of their home and specify exactly where they would like a delivery left. The delivery route intel is transferred to the IT system rather than just the driver, so that any replacement driver too can see that information.
HDS says that next, it will turn its attention to the convergence of Australia’s milk and bread deliveries into local coffee shops, restaurants, pubs and clubs, which it says are currently receiving multiple deliveries from half-empty trucks each day.
