TULSA, Okla. -- Outsourcing of its transportation and maintenance operations not only gave Affiliated Food Stores here newer, more technologically advanced equipment -- it also helped the wholesaler reduce its fleet size by nearly one-third, from 60 tractors to 42.
Prior to outsourcing, Affiliated's fleet "had anything from 20-year-old equipment to two- to three-year-old equipment, and it was all different types," said Bob Ripley, president and chief executive officer of Affiliated. "It was quite a hodgepodge."
The outsourcing program involved having Ryder System, Miami, a third-party transportation company, purchase Affiliated's existing fleet and lease equipment back to the wholesaler. Affiliated also leased its maintenance shop to Ryder, which took charge of maintaining the truck fleet.
"This provided us with the latest technology as far as engines and tractors were concerned, which lowered our overall variable operating costs," said Ripley. "For instance, our fuel mileage increased using their equipment compared to ours."
Affiliated was able to cut its fleet size, without jeopardizing customer service to the 1,250 stores it services, because of the third-party transportation company's promise to make extra equipment available on an as-needed basis.
"In their original presentation, Ryder talked to us about not having equipment sitting on the lot four or five days a week when you only use them two days a week," said Ripley.
"They talked about reducing the overall size of the fleet and having additional pieces available a few days per week, and that's worked out well for us."
Equipment availability has also helped the wholesaler avoid down time since outsourcing its fleet in early 1996. "We used to fight the problem of breakdowns continuously," said Ripley. "Now we don't have any breakdowns at all, and if we do, we're on the road again in a couple of hours -- either with a replacement piece or having the vehicle fixed."
Affiliated bought another wholesaler, Independent Grocers, Abilene, Texas, this year, taking over operations on Labor Day. Independent Grocers had also been leasing its fleet from a third-party company, but Ryder took over operations Dec. 1, said Ripley.
"We'll be able to achieve significant savings by using them in that facility as well," said Ripley. Independent Grocers services approximately 400 stores, and its fleet consists of 14 tractors and 20 trailers, he noted.
Besides fleet operations and maintenance, Affiliated has outsourced its Department of Transportation-mandated driver testing and its safety training to the third-party company. "They road test the drivers before hiring to see if they can handle it, and give recommendations for potential candidates," said Ripley.
"Outsourcing has meant a remarkable increase in our ability to serve the customer," Ripley added. "The vehicles are a lot better, they're easier to work with, and the drivers are a lot more comfortable. Basically, it has eliminated a lot of the hassles we had in operating our transportation fleet."