CINCINNATI -- Kroger Co. here is outsourcing the fleet maintenance for its Central Marketing Area, which includes 141 supermarkets in Indiana, Illinois, Missouri, Michigan and Ohio.
Transervice Lease Corp., Lake Success, N.Y., is providing maintenance for 82 tractors, 52 forklifts and 400 trailers -- 235 of which handle refrigerated product -- at Kroger's Indianapolis distribution center.
Jack Sweeney, distribution manager at Kroger's Indianapolis facility, confirmed that the division entered into the outsourcing agreement August 9, but declined to provide further details. The agreement is reportedly for five years.
Kroger is outsourcing its daily fleet-maintenance responsibilities to "obtain maximum cost control and productivity," according to a source familiar with the program.
The maintenance program includes vehicle inspections, repairs, major overhauls, road service and a preventive maintenance program. In addition to a fully equipped service facility on Kroger's premises, a dedicated fleet manager and certified maintenance personnel maintain and service the Kroger equipment.
Approximately 20 maintenance personnel, ranging from dedicated operations supervisors to mechanics, are employed by the third party. Drivers are not included in the outsourcing agreement.
The agreement states that Transervice will provide Kroger with a maximum guaranteed rate for the outsourcing contract. Cost savings due to increased productivity are shared with the retailer.