Post on 07-Feb-2016
description
Hy-Vee Fuel Efficiency
• Employee Owned Company• Founded in 1930• Corporate Office – West Des Moines• $7.2 Billion in Sales Last Year• 235 Stores• Over 60,000 Employees
Chariton
• Hy-Vee Distribution Centers– Chariton, Iowa – Cherokee, Iowa
• Subsidiary Distribution– Perishable Distributors of Iowa– Lomar Foods– Florist Distributing, Inc.
Hy-Vee Sales History
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Billi
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Approximately 250,000 Square Mile Trade Territory
Hy-Vee - Transportation
Asset Allocation
Tractors Trailers
Chariton 144Cherokee 66PDI 95Total 305
Chariton 320Cherokee 75PDI 120Total 515
Total Acquisition Cost: $60,000,000
Miles Driven
Chariton 18,285,110
Cherokee 5,322,490
PDI 7,463,503
Total Company 31,071,103
Equivalent to 1,248 trips around the world every year.
Transportation - 2011
Chariton Cherokee PDI Total
Outbound Loads 45,608 12,641 22,891 81,140
Outbound Tons Hauled 723,122 317,053 280,000 1,320,175
Backhauls 21,662 4,642 11,765 38,069
Contract Backhauls 2,376 NA 2,004 4,380
% of Loads with Backhaul or Contract 53% 37% 60% 52%
Effect of Fuel Cost on Truck Expense
Effect of Fuel Cost on Truck Expense
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Fuel Price Per Gallon
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2011
Fuel Cost Per Mile
Truck Expenses
Wages Fuel Depreciation Group Insurance Vehicle Repair Other
26.7 Million
18.2 Million
6.1 Million
3.1 Million
3.7 Million
9.2 Million
Fuel Economy
Projected SavingsFuel Economy over 6.4 mpg
GOAL: To improve transportation efficiencies without disrupting service to our stores.
Technology
• Tractor/Trailer Aerodynamics• Tires – Super Singles & Fuel Efficient Duals • Onboard Computers – People.net• Fuel – Biodiesel & Propane • Load Planning – Retalix Transportation
Optimization (RTO) • Dispatch Visibility – CAMS • Tractor Specification
Aerodynamics
Trailer Aerodynamics
SUPER SINGLE TIRES• Began in 2005 with 5 tractors & 5 trailers (40 tires);
expanded to additional units
• Test results with super singles on tractor & trailer showed 0.12 to 0.32 mpg improvement in fuel economy
• Fuel economy shown with super singles was wiped out by reduced tire wear & driver satisfaction
• Currently phasing out super single tires &have gone to a fuel-efficient dual tire
Fuel-Efficient Duals
PeopleNet Onboard Computers
PeopleNet Reports
• Records MPG– By Driver– By Tractor
• Records Idle Time
• Driver Speeds
• Driver Activity Reports
• Bread Crumb Trail
• Fuel Tax
Fuel – Soy Biodiesel• 18 month test
• 5% blend
• Adds lubricity to the engine to offset the
ultra-low sulfur diesel
• 183,000 gallons purchased
• No impact on fuel economy
• Cleaner fuel system
• Cost Prohibitive – Adding Soy Biodiesel
increased fuel cost by $0.09 per gallon
Benefits of Fuel – Propane Mixture
• Reducing fuel cost & increasing fuel economy
• Improved engine horsepower• Receive approximately 75 HP boost with
propane
• Extended service intervals– Use of propane reduces particulates caught in
the particulate trap– Oil soot samples have been reduced
• Reduced greenhouse gas emissions• Warranty is still valid
Propane Diesel Injection System
• A small amount of propane is mixed with the air intake prior to the introduction of the air to the engine (20% propane & 80% diesel).
Propane Diesel Injection SystemWhy it is so beneficial….The small amount of propane increases the combustion efficiency of the diesel burn producing more mpg and less emissions and enhanced performance.
Propane ComparisonPlain Diesel
Miles Gallons MPG Cost/Gallon Cost/Mile
Diesel 125,000 20,358 6.14 $3.64 $0.593
Total Cost/Mile $0.593
Diesel + Propane
Miles Gallons MPG Cost/Gallon Cost/Mile
Diesel 125,000 17,934 6.97 $3.64 $0.522
Propane 125,000 3,289 38.01 $1.31 $0.034
Total Cost/Mile $0.557
Difference $0.036 per mile savings
Estimate Annual Savings145 Tractors
18,000,000 miles driven annually
@ $0.02 per mile = $360,000
@ $0.03 per mile = $540,000
@ $0.04 per mile = $720,000
Estimated Cost to Purchase & Install Propane System
on Entire Fleet145 Tractors x $1,800 = $261,000
18,000 gallon tank and 2 pumps = $40,000
$301,000
AmeriGas Agreement
Will Install 18,000 gallon tank and 2 pumps - $40,000
145 units x $1,000 rebate -$145,000
-$185,000
Hy-Vee Investment $116,000
ROI of Approximately 4 months
• Routing Software was installed in 2010
• Interfaced with our Warehouse Management System & Electronic Dispatch
• Provides Dynamic Routing
Retalix Transportation Optimization - RTO
CAMS Dispatch Software• Allows visibility between Distribution Centers• Interfaces with our warehouse management
system, routing software, & onboard technology (PeopleNet)
• Streamline payroll• Dispatch loads to drivers• Reporting & analyzing equipment usage• Tracks backhauls• Manages drivers time off• Track average delivery weight & cube by store
New Tractor Technology
• 2011/2012 Volvo Tractor– 2010 EPA emission standards– Aerodynamic body style– I-Shift automatic transmission– Disk breaks reduce stopping distance– Have purchased 60 over the last two years– Averaging 6.8 mpg as a group– Most popular tractors we have purchased
Increase Freight Capacity
• Maximize Outbound Weight & Cube• 81,140 Loads
• Contract Freight• 4,380 Loads
• Backhaul Freight• 38,069 Backhauled
• Direct Store Deliveries• Included in backhaul freight
Contract Freight - Hormel
• Partnered with Hormel in 2004
• Hy-Vee’s private fleet delivers to Hy-Vee stores in a 7 state area• Hormel has several plants in this 7 state area• Currently pick-up 2,400
loads per year
• StoresPlants
Chariton & Cherokee DC’s
Backhauls• Backhaul over 50% of our loads• Reduce empty miles• Deliver to subsidiaries• Major Suppliers:
– Kraft– Premium Water– American Bottling– Kimberly Clark– Quaker– Hormel– General Mills– Unilever– Nestle
Direct Store Deliveries – DSD’s
• 8.4% of backhauls are DSD’s• Allows stores to make better deals with
vendors– Kraft– Premium Water– American Bottling– Kimberly Clark– Quaker– Hy-Vee Lawn & Garden
Questions?