DELIVERING THE GOODS 2003

NEW YORK -- FreshDirect here takes advantage of New York's dense population to keep its delivery costs in line.

urdays and Sundays. The company recently added another 30 trucks to the fleet.

FreshDirect receives more than 2,000 orders per day -- and rejects between 600 and 800 orders because it does not yet have the delivery capacity to handle that volume, according to Joe Fedele, chief executive officer.

The average order totals $97. FreshDirect charges $3.95 per order for delivery -- significantly less than the $9.95 charged by traditional supermarkets in several markets. Fedele calculated that it costs the company "less than $6" per delivery.

The company loads 12 trucks at a time, and can stock 60 to 70 deliveries per truck every half hour, Fedele said. Drivers are able to deliver 14 to 24 orders every time their truck stops. Each truck serves a two-by-four-block area.

Meredith Adler, analyst, Lehman Bros., New York, said she sees a lot of potential for FreshDirect's model in New York City, but she said the company has yet to prove that delivery can be efficient outside the five boroughs.

"I don't think the economics of home delivery in the suburbs are all that great," she said, noting that she thinks the company will test alternative delivery methods, such as parking trucks at suburban train stations or in parking lots where customers can pick up their orders.