Night Moves

Retailers eye third-shift deliveries to free up lot space, employees.

By
Samantha Oller, Senior Editor/Special Projects Coordinator

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Under the cover of night, some c-stores are moving deliveries from wholesalers and DSD suppliers to the third shift.

Part cost containment, part customer service, this nocturnal shift remains largely in the shadows; indeed, a CSP Daily News poll found only onethird of respondents received product in the late-evening hours. But many influential chains—including The Pantry, 7-Eleven and Speedway Super- America—and independents are beginning to make the switch.

Eighty-five percent of Speedway’s deliveries from Eby-Brown Co. occur at night for a few days each week. The purpose is to free up the stores for customers, according to the retailer [CSP—March ’10, p. 30]. The wholesaler offers the service for retailers in select markets.

McLane Co. provides nighttime deliveries to more than one-half of its c-store client base, including The Pantry, Hess and Circle K. It’s a prime example of a business win-win, proponents say.

“Redundancy is the killer in our industry,” says Stuart Clark, Temple, Texas-based McLane’s senior vice president of sales and marketing. “If we’re only running trucks during the day and they’re sitting idle at night, you have assets that are not being used. That just adds costs to the system.”

Most wholesalers offer nighttime deliveries, but, depending on their distribution setup, not all consider it an area of growth.

For Core-Mark International Inc., South San Francisco, Calif., routes need to reach a certain volume of stops. “It’s obviously got to be a pretty good amount [of stores] that want to go that direction before we’re able to offer that at a distribution center, so we have to look at the whole routing,” says Christopher Hobson, vice president of marketing. “If five guys wanted to do nighttime delivery, there wouldn’t be enough critical mass to make that work.” While only a few Core-Mark clients receive nighttime deliveries, the wholesaler anticipates more business to shift to overnight hours. “From a retailer’s perspective, it might be the best time,” Hobson says. “Obviously the customer count is low. As far as parking-lot space … it’s not as much an issue as it is during the daytime. And there are some advantages for us as well: We’re able to utilize our fleet more efficiently.” For Core-Mark, it has also meant figuring out how to minimize the disruption in personal lives for drivers who take the p.m. shift. “Security is an issue, safety is an issue, less visibility when it’s dark and you’re driving is an issue,” Hobson says. “We have to be cognizant and prepared for that.”

GOING INTO LABOR

Retailers have their own considerations— primarily, labor. To control costs, most retailers keep one employee on staff during the night shift, says Clark. Some will schedule an extra employee around the estimated time of delivery to specifically handle receiving.

For Dallas-based 7-Eleven Inc., which has been transforming its distribution logistics as part of an ongoing cost-cutting initiative, nighttime deliveries are an essential piece. The chain’s combined distribution centers (CDCs), operated by third parties including wholesaler McLane, receive product from suppliers. The product is then cross-docked onto trucks for delivery to 7-Eleven stores.

The retailer is also testing a setup whereby beer and beverage distributors deliver products to a warehouse operated by a third party, who would then deliver it to the c-stores at night. “Very few” 7-Eleven sites currently receive nighttime beer deliveries, says Jon Kuehnhold, the chain’s former national category manager of alcoholic beverages, who now oversees candy. But stores do receive all of their fresh-food deliveries at night.

The advantages, from 7-Eleven’s point of view: Trucks arrive when customers are not typically in the stores, and thus do not clog up the lots. The cost to commute is also cheaper because of the limited traffic and minimized downtime for equipment and employees, especially in congested major metropolitan areas.

While Kuehnhold cannot point to hard numbers showing cost savings from receiving nighttime deliveries, there are definite efficiencies. “You’ve got to look at it this way: Not only do the trucks not sit idle, they’re not stuck in traffic, they’re not stuck with two other vendors’ trucks on the lot [so] they can’t deliver to the stores,” he says. “In essence, we’re free to get the most use out of that equipment and manpower as well.”

While many of 7-Eleven’s DSD suppliers are interested in providing nighttime deliveries, obstacles include state or local laws that prohibit deliveries during certain hours, union issues and the fact that, for now, most of their retailer clientele still prefers to receive daytime deliveries.

“It’s how they’ve built the system, and the expenses incurred within the system,” says Kuehnhold. “It’s definitely a big challenge—but we’re trying to get a model that gets product to stores faster, easier, on a timely basis and from the standpoint of a cost basis.”

A SECURE FEELING

According to Tim Cote, vice president of marketing for Plaid Pantries, Beaverton, Ore., most of the chain’s 103 sites receive nighttime deliveries from its wholesaler, Core-Mark, as well as Coca- Cola and Pepsi, save for a few sites in residential areas and those open only 18 hours a day. It was a move the company made about six years ago to free up parking for customers.

“We don’t have gas in the majority of our stores, so our parking lots are very tiny,” says Cote. “When [delivery trucks] come in, we’re essentially closed when they’re delivering, because there’s nowhere to park.” In addition, product would get lined up in the aisles, cluttering the store.

Stores still receive daytime deliveries from Frito-Lay and beer distributors because of local laws prohibiting latenight alcohol-beverage deliveries. That said, if Plaid could receive snacks and beer at night, the company would do it in a heartbeat, according to Cote.

For most Plaid stores, the staffing was kept at one employee; the retailer did have to train third-shifters on how to receive orders, and overlap schedules so that employees would have help putting large deliveries away.

Distributors also had to train delivery staff on the new rhythm of nightly deliveries; the check-in process can become choppy as employees stop to serve customers. “The customer’s always first, and the vendor knows that,” says Cote. “If we’re checking in an order, and the customer’s ready, everybody waits while the customer is taken care of.”

At the same time, delivery staff must take extra measures to secure product while unloading the trucks in the dark of night. Interestingly, however, their presence provides an additional sense of security to Plaid Pantry employees. “From the standpoint of robbery prevention … you’ve got another person in the parking lot,” Cote says. “That cuts down on your chances of getting robbed. It’s not just a second clerk— it’s someone running around who’s not just an employee there.”

Plaid enjoys another benefit: Due to the current rarity of night deliveries, the chain receives nearly exclusive access to its suppliers’ drivers.

“There are only a couple of us who will take [deliveries] in the evening, so with two to three chains, the routes become somewhat chain-specific, and the delivery guy gets really familiar with check-in procedures,” says Cote. This is especially advantageous in the case of DSD beverage suppliers, whose drivers are also responsible for setting up displays and signage and already are familiar with Plaid Pantry’s merchandising preferences.

However, it’s been “very difficult” to quantify the cost savings of nighttime deliveries, according to Cote. While the retailer captures more competitive pricing from suppliers by taking nighttime deliveries, those lower costs get obscured during contract negotiations.

“From a sales standpoint, you never knew how many people you were losing during the day with a truck parked on your lot, so it’s difficult to say how much you picked up,” Cote says. “You just have to work off your gut and say, ‘The lot’s open during the day when people are trying to get into our lot. It can’t hurt, so it’s got to be helping us.’ ”    

Nighttime Deliveries

Scheduling third-shift deliveries frees up lots and aisles during daytime hours.

Not all wholesalers provide nighttime service; many require that routes achieve a critical mass.

Greater security and dedicated drivers are additional benefits.

With cost savings tough to measure, enhanced customer service becomes the true win.Under the cover of night, some c-stores are moving deliveries from wholesalers and DSD suppliers to the third shift.

Part cost containment, part customer service, this nocturnal shift remains largely in the shadows; indeed, a CSP Daily News poll found only onethird of respondents received product in the late-evening hours. But many influential chains—including The Pantry, 7-Eleven and Speedway Super- America—and independents are beginning to make the switch.

Eighty-five percent of Speedway’s deliveries from Eby-Brown Co. occur at night for a few days each week. The purpose is to free up the stores for customers, according to the retailer [CSP—March ’10, p. 30]. The wholesaler offers the service for retailers in select markets.

McLane Co. provides nighttime deliveries to more than one-half of its c-store client base, including The Pantry, Hess and Circle K. It’s a prime example of a business win-win, proponents say.

“Redundancy is the killer in our industry,” says Stuart Clark, Temple, Texas-based McLane’s senior vice president of sales and marketing. “If we’re only running trucks during the day and they’re sitting idle at night, you have assets that are not being used. That just adds costs to the system.”

Most wholesalers offer nighttime deliveries, but, depending on their distribution setup, not all consider it an area of growth.

For Core-Mark International Inc., South San Francisco, Calif., routes need to reach a certain volume of stops. “It’s obviously got to be a pretty good amount [of stores] that want to go that direction before we’re able to offer that at a distribution center, so we have to look at the whole routing,” says Christopher Hobson, vice president of marketing. “If five guys wanted to do nighttime delivery, there wouldn’t be enough critical mass to make that work.” While only a few Core-Mark clients receive nighttime deliveries, the wholesaler anticipates more business to shift to overnight hours. “From a retailer’s perspective, it might be the best time,” Hobson says. “Obviously the customer count is low. As far as parking-lot space … it’s not as much an issue as it is during the daytime. And there are some advantages for us as well: We’re able to utilize our fleet more efficiently.” For Core-Mark, it has also meant figuring out how to minimize the disruption in personal lives for drivers who take the p.m. shift. “Security is an issue, safety is an issue, less visibility when it’s dark and you’re driving is an issue,” Hobson says. “We have to be cognizant and prepared for that.”

GOING INTO LABOR

Retailers have their own considerations— primarily, labor. To control costs, most retailers keep one employee on staff during the night shift, says Clark. Some will schedule an extra employee around the estimated time of delivery to specifically handle receiving.

For Dallas-based 7-Eleven Inc., which has been transforming its distribution logistics as part of an ongoing cost-cutting initiative, nighttime deliveries are an essential piece. The chain’s combined distribution centers (CDCs), operated by third parties including wholesaler McLane, receive product from suppliers. The product is then cross-docked onto trucks for delivery to 7-Eleven stores.

The retailer is also testing a setup whereby beer and beverage distributors deliver products to a warehouse operated by a third party, who would then deliver it to the c-stores at night. “Very few” 7-Eleven sites currently receive nighttime beer deliveries, says Jon Kuehnhold, the chain’s former national category manager of alcoholic beverages, who now oversees candy. But stores do receive all of their fresh-food deliveries at night.

The advantages, from 7-Eleven’s point of view: Trucks arrive when customers are not typically in the stores, and thus do not clog up the lots. The cost to commute is also cheaper because of the limited traffic and minimized downtime for equipment and employees, especially in congested major metropolitan areas.

While Kuehnhold cannot point to hard numbers showing cost savings from receiving nighttime deliveries, there are definite efficiencies. “You’ve got to look at it this way: Not only do the trucks not sit idle, they’re not stuck in traffic, they’re not stuck with two other vendors’ trucks on the lot [so] they can’t deliver to the stores,” he says. “In essence, we’re free to get the most use out of that equipment and manpower as well.”

While many of 7-Eleven’s DSD suppliers are interested in providing nighttime deliveries, obstacles include state or local laws that prohibit deliveries during certain hours, union issues and the fact that, for now, most of their retailer clientele still prefers to receive daytime deliveries.

“It’s how they’ve built the system, and the expenses incurred within the system,” says Kuehnhold. “It’s definitely a big challenge—but we’re trying to get a model that gets product to stores faster, easier, on a timely basis and from the standpoint of a cost basis.”

A SECURE FEELING

According to Tim Cote, vice president of marketing for Plaid Pantries, Beaverton, Ore., most of the chain’s 103 sites receive nighttime deliveries from its wholesaler, Core-Mark, as well as Coca- Cola and Pepsi, save for a few sites in residential areas and those open only 18 hours a day. It was a move the company made about six years ago to free up parking for customers.

“We don’t have gas in the majority of our stores, so our parking lots are very tiny,” says Cote. “When [delivery trucks] come in, we’re essentially closed when they’re delivering, because there’s nowhere to park.” In addition, product would get lined up in the aisles, cluttering the store.

Stores still receive daytime deliveries from Frito-Lay and beer distributors because of local laws prohibiting latenight alcohol-beverage deliveries. That said, if Plaid could receive snacks and beer at night, the company would do it in a heartbeat, according to Cote.

For most Plaid stores, the staffing was kept at one employee; the retailer did have to train third-shifters on how to receive orders, and overlap schedules so that employees would have help putting large deliveries away.

Distributors also had to train delivery staff on the new rhythm of nightly deliveries; the check-in process can become choppy as employees stop to serve customers. “The customer’s always first, and the vendor knows that,” says Cote. “If we’re checking in an order, and the customer’s ready, everybody waits while the customer is taken care of.”

At the same time, delivery staff must take extra measures to secure product while unloading the trucks in the dark of night. Interestingly, however, their presence provides an additional sense of security to Plaid Pantry employees. “From the standpoint of robbery prevention … you’ve got another person in the parking lot,” Cote says. “That cuts down on your chances of getting robbed. It’s not just a second clerk— it’s someone running around who’s not just an employee there.”

Plaid enjoys another benefit: Due to the current rarity of night deliveries, the chain receives nearly exclusive access to its suppliers’ drivers.

“There are only a couple of us who will take [deliveries] in the evening, so with two to three chains, the routes become somewhat chain-specific, and the delivery guy gets really familiar with check-in procedures,” says Cote. This is especially advantageous in the case of DSD beverage suppliers, whose drivers are also responsible for setting up displays and signage and already are familiar with Plaid Pantry’s merchandising preferences.

However, it’s been “very difficult” to quantify the cost savings of nighttime deliveries, according to Cote. While the retailer captures more competitive pricing from suppliers by taking nighttime deliveries, those lower costs get obscured during contract negotiations.

“From a sales standpoint, you never knew how many people you were losing during the day with a truck parked on your lot, so it’s difficult to say how much you picked up,” Cote says. “You just have to work off your gut and say, ‘The lot’s open during the day when people are trying to get into our lot. It can’t hurt, so it’s got to be helping us.’ ”   


Nighttime Deliveries

  • Scheduling third-shift deliveries frees up lots and aisles during daytime hours.
  • Not all wholesalers provide nighttime service; many require that routes achieve a critical mass.
  • Greater security and dedicated drivers are additional benefits.
  • With cost savings tough to measure, enhanced customer service becomes the true win.

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