SATELLITE TRACKING TO CUT COST OF TRUCKING AT SAFEWAY U.K.

JAMES FALLON

CHESHUNT, England (FNS) -- Safeway here is investing $2.43 million in a satellite tracking system with the goal of cutting delivery costs by $1.62 million a year.

The satellite system will track the movement of the company's 600 trucks, which make about 9,000 deliveries each week, said Lawrence Christensen, logistics director at Safeway here.

Sensors on each vehicle will relay signals via satellite to Safeway's computers at its headquarters, which will track the position of each vehicle in relation to Safeway's 13 depots.

The information will be used to monitor variables such as whether a driver is over-revving in third gear and using too much fuel. The system also can be used to alert drivers to traffic delays or warn stores of late deliveries.

Safeway has been testing the system at its Warrington, England, depot for about a year, where the system helped cut 10% off the depot's fuel costs. It currently is installing the system at its Bellshill depot.

Christensen said the system will cost about $567,000 a year to operate but said Safeway hopes to recoup its investment in a little more than a year.

In addition to fuel-cost savings, Safeway believes the system can help it reduce labor costs by eliminating delays. Christensen estimated that delays cost the group more than $2 million a year in extra drivers' wages.

The software for the system was developed by Safeway and Logiq of the Netherlands and it eventually will be integrated with Safeway's bar-code system for products coming into and leaving the warehouse.