Woolworths Takes a New Direction in Specifying Trailers

As part of the national rollout of its Metro Transport Model, supermarket giant Woolworths has taken a new direction in specifying trailers. PATRICK O’BRIEN filed this report after speaking with Woolworths management about a strategy which has seen the company acquire batches of new trailers from several leading suppliers.

A Fresh Start

The Woolworths fleet management team has plenty on its plate these days. An important part of its daily function is to spend considerable time poring over past and predicted sales figures to ensure the Woolies’ fresh food fleet is made up of exactly the right number – and type – of vehicles to manage the task.

Traditionally Woolworths has been primarily focused on moving stock known as secondary freight from warehouse to store whilst in parallel running an in-bound primary freight service, with the magnitude of both operations having increased markedly in recent years. As a result of this the company had suffered from increasing inefficiencies due to trucks going out full one way and returning empty. The main reason for this was that even if a supplier to Woolworths was located just down the road from the supermarket, the trailers weren’t configured for carrying both types of freight.

Therefore, a key objective of the fleet management team involved developing a strategy to enable the integration of primary and secondary freight haulage in order to maximise vehicle utilisation.

With the exception of the Victorian fleet, which has been company-owned and controlled since the Safeway purchase in 1985, Woolworths used to contract out each of its transport operations and pay operators a pallet rate.

Then in 2008 the company made the decision to take control of the trailers and load planning, implementing an operating model known as Metro Transport Model (MTM). Payment was switched to a set kilometre rate that the haulier would receive no matter how many pallets were being transported, and Woolworths began purchasing and leasing its own trailers in states outside of Victoria. This gave the retailer added flexibility and control over costs and service which was deemed critical to the maximised performance of its operations.

While a cursory discussion about the relative merits of flat rates and MTMs may not seem particularly fascinating, delving deeper can be revealing in its own way. That’s because although Woolworths’ switch to the MTM is a relatively recent move, it represents a marked culture shift in the company’s approach to its transport needs.

For instance, over the past few years Woolworths has gone from owning or leasing a couple of hundred trailers to being responsible for over 700 units nationwide. In fact, it was the practice of hiring extra equipment around the peak Christmas period that saw Woolies well placed to quickly restock empty shelves in south-east Queensland after the devastating floods earlier this year.

Yet as an instantly recognised part of Australian life, thanks to its bright green livery and lively slogans, Woolworths is certainly conscious of how its fleet is viewed by other road users and the general public. As a result, it was one of the first operators to specify side under-run protection on its new trailers, a decision it says has proven to be one of the best it could have made with its fleet.

Within the first year of operation the inclusion of side under-run protection proved its worth by preventing a car and its driver from being wedged under the axle group of one of the trailers. Woolworths says it specifies its equipment with safety foremost; from side under-run protection and EBS (electronic braking) on its trailers to driver’s airbags on rigid trucks and prime movers.

As well as prioritising safety, the team at Woolies has been focused on reducing the fleet’s carbon footprint. For example, the company was an early adopter of ADR 80/03 (Euro 5) compliant vehicles well before the legislation was mandated and now claims to have over 200 such vehicles operating around the nation. Furthermore, the company says its Victorian fleet has been using B20 fuel (a blend of 20 percent biodiesel and 80 percent distillate) in its vehicles since October 2010.

Integration innovation

An important part of the switch to the MTM involved procuring trailers that could work equally well delivering rear loaded pallets of groceries to stores as returning to the distribution centre (DC) with inbound palletised product that often needs to be loaded from the side.

To this end, Woolworths made the decision not to buy any more 24 pallet dry vans and sent out the call for similar sized curtainsiders with a number of special requirements including:

• Legal 24 tonne payload capacity;
• Identical safety levels along with a cheaper purchase price than a normal hard-sided van;
• The same ease of rear loading as a conventional van in addition to side loading capability.

Evidence that the local boys can hold their own against anyone can be found in the fact that in 2010 Woolworths ordered and received 36 MaxiTRANS Freighter ‘Integration’ trailers that tick all the aforementioned boxes. Prior to this, however, 10 similar units were built for Woolworths by Krueger.

Looking at the two offerings, it’s interesting to see how each manufacturer has used different ideas to achieve essentially the same result. For example, where Krueger utilises standard curtains with aluminium gates that slide sideways for side loading access, Freighter’s Integration trailer has no gates, instead employing load restraint curtains and folding kick-strips that provide curtain protection and guide rear loading while simply folding flat on the floor so as to allow side loading.

Similarly, while Krueger’s gates incorporate mounting points for conventional horizontally positioned shoring bars, Freighter’s gate-less design utilises an innovative mix of horizontal and vertical shoring bars, with the latter secured in corresponding rows of holes in the floor and roof.

Before Woolworths commissioned Freighter to build the Integration trailers the company held numerous meetings in Sydney and Melbourne with its DC operations teams to ensure everyone involved was given the opportunity to voice their opinion on how the trailers should be constructed. Using this information, Woolworths informed Freighter about what it wanted and this began a process of to and fro with design ideas and solutions.

Features like the load restraint bar mounting points in the floor and roof are a good example of the innovative ideas Freighter came up with to satisfy its customer’s needs. All up, it involved about 12 months of design work by the trailer manufacturer before all requirements were met, however once this was established the company delivered all the trailers within a month, on time and on budget.

According to Freighter general manager Rod Cunningham, from a manufacturing point of view the biggest challenge involved working out an economical way to position the kick-strips vertically while also allowing space between for two pallets.

“In the raised position the kick-strips actually rest against the side posts that support the roof of the curtainsider, so we faced a considerable challenge in working out how to provide the necessary width between the kick strips for two pallets whilst at the same time containing the trailer’s overall width within 2.5 metres,” Cunningham explained.

“We employed a few little tricks to pull this off. We slimmed down and strengthened the side posts to give us a bit more width inside, came up with a space saving hinging system and utilised an air operated lifting mechanism that is powered from the trailer’s air supply.

“In manufacturing, some ideas cross over easily while some don’t,” Rod continued thoughtfully. “The idea of the kick-strip certainly grew from other concepts. It was a matter of streamlining previous ideas into something new, but integrating it with the load restraint system proved to be a major challenge.”

That’s due to the use of load restraint curtains where there were no side gates in which to mount traditional horizontally positioned shoring bars, meaning a totally different approach was required. That’s why Freighter engineers hit upon the concept of vertical positioning with the bars locking into corresponding sets of holes located in the floor and ceiling.

The Integration trailer is a great example of how local manufacturers can catch the eye of a big company such as Woolworths. In this case, Woolworths had specific needs and Freighter came up with a series of ground-breaking solutions. Bringing innovation to the table and explaining how it’s going to save the customer some money while fitting into their current operation, is, as always, the secret to success.

“It’s about listening and trying to dig out what our customers are trying to achieve by working closely with them,” Cunningham added. “A lot of the time, someone will come up with an initial idea but where we end up might be in a completely different place although still supporting that original concept.

“There’s really no one way of doing things, rather it’s a combination of many things. We have a lot of resources behind us, people who have been in the industry many years and have seen many different types of operations. At the core of our business is a culture of creating and recreating.”

It’s worth noting here that despite Woolworths purchasing equipment from a number of suppliers including some that source their products from abroad, the company has been genuinely impressed with the ability of Australian manufacturers to produce equipment that consistently meets the harsh demands of this country’s unique operating environment. It’s also important to remember that there’s a lot of Woolies’ fleet on the ground wearing a wide variety of badges, meaning relationships with many manufacturers will naturally stay close and strong through maintenance agreements and the like.

On the subjects of maintenance and vehicle lifespan, Woolworths actually makes a decision annually on whether to replace or retain a piece of equipment. Each trailer is inspected onsite every 30 days and although it is generally expected that no piece will last longer than 10 years, if it’s still up to the task it will stay part of the family. In fact, there are some refrigerated fibreglass vans still running throughout Victoria that are more than 15 years old – although it would be fair to suggest that their days are probably numbered.

The final decision is made through consultation between the site fleet managers and the national fleet management team. If an onsite fleet manager requests a replacement, the  maintenance team estimates how much it will cost to keep the trailer running over the next year based on the work it’s been doing for the past year or two. If it’s decided that yes, it needs to be replaced, the team goes through the usual budget process before going out to buy the new unit.

For now, the fleet strategy for the team at Woolworths is all about consistency. In Sydney alone you’ll find trailers built by Vawdrey, Peki, MaxiTRANS and Krueger, with BPW axles on some and Fuwa K-Hitch on others. However, such variety tends to make maintenance a little more problematic, which is why SAF-Holland has been the axle of choice on recent builds. This means having to keep fewer parts for maintenance and just one phone call to sort out any issues that may arise. Put simply, Woolworths has just completed a fleet building process and now has to determine the optimal use of that fleet.

In other words, the company is very aware it now needs to make sure its systems and people make the best use of the equipment to minimise cost and continually increase the level of integration between inbound and outbound freight.

To sum up, with its Metro Transport Model Woolworths has transitioned from being simply a grocery logistics company to a total transport provider in its own right. While it’s still early days, to date it’s been an interesting journey to follow and you get the sense that this is only just the beginning.