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The Urban Maze: Making Deliveries Count in NYC

Operating its chain of drug stores in the tight spaces of New York City, Duane Reade has engineered a new concept in inventory management while optimizing its fleet for electrification.

November 2012, by Joanne M. Tucker - Also by this author

Photos courtesy of Duane Reade.

Duane Reade’s all-electric trucks are from Smith Electric. Duane Reade chose the 80-kWh battery-electric Newton 24-ft. box truck.
Photos courtesy of Duane Reade.Duane Reade’s all-electric trucks are from Smith Electric. Duane Reade chose the 80-kWh battery-electric Newton 24-ft. box truck.

With no back doors, no loading docks and busy sidewalks to push deliveries through, how does a delivery fleet in New York City survive? Operating for more than 50 years, Duane Reade, a New York City-area drug store with about 255 stores in total, has a few tricks to moving fleet in this tight urban space.

Michael Fowles, Duane Reade’s fleet manager, says that toll roads and parking regulations in general can have a significant impact on the company’s transportation costs, so keeping those to a minimum is a top priority.

Twenty-five percent of Duane Reade’s fleet is comprised of Smith Electric Newton box trucks. Rounding out the fleet are other similarly sized diesel box trucks and tractors with customized trailers that are made to meet local regulations.

An All-Wheels, As-Needed Delivery

Due to the antiquated buildings and other space constraints, Fowles says Duane Reade’s delivery workers must enter and exit the same door as customers. And so, instead of using pallets or other traditional forms of delivery, the company fills plastic totes with inventory back at the warehouse. 

Without back doors or loading docks, Duane Reade’s stores can’t accommodate much extra inventory, which has forced the company to implement a unique delivery style.
Without back doors or loading docks, Duane Reade’s stores can’t accommodate much extra inventory, which has forced the company to implement a unique delivery style.

About 10-12 totes are strapped together onto a dolly, while bulky items are put onto a wheeled cart with flexible siding. Fowles says the company calls it the “wheeled delivery” concept.

Another restriction due to the old buildings is that most Duane Reade stores have very little storage room in back, if there’s a back room at all. Because of this, stores make orders from the Duane Reade warehouse — located in Queens — on an as-needed basis. “Instead of sending a full case of Snickers, we’ll just send whatever the demand is,” Fowles says, adding that this is why the totes work.

Before making deliveries on these “glorified skateboards,” as Fowles calls them, the process took three or more hours. But now that the inventory is quickly wheeled from the truck’s lift gate and into the store, deliveries take less than 30 minutes.

Upon delivery, the equipment and totes are left there. “That’s been a huge benefit,” he says. “But the one downside is it forces us to stop back at that store and pick up the equipment.” This extra pickup means that the trucks are making more stops than they did before. But with stores operating in a concentrated area, Fowles says the costs of adding stops have been incremental and worth the time saved in deliveries.

“We’re still well under the delivery time compared to delivering on pallets,” he says. The trucks also load any recyclables that have been dropped off at stores by customers, per New York’s cash refund laws.

And though it now takes more time to pack the truck at the warehouse, Fowles says that from an inventory management perspective the process is “pretty slick.”

Concerns in Urban Routing

Routing software is a must for Duane Reade because of the Big Apple’s notorious toll roads and traffic. And with the delivery approach the company has taken, at times the warehouse will even run out of the new delivery equipment, according to Fowles.

“Our trucks and our trailers are somewhat of a mobile extension of our warehouse,” he says. “Sometimes we might actually run out of equipment because of the number of vehicles we can have out delivering combined with those being loaded.” This means that proper routing can go a long way in getting the totes and specially designed carts back in a timely manner.

For routing and tracking Duane Reade uses a routing software that offers a mix of GPS, driver behavior telematics, remote vehicle shutdown and driver logs for tracking hours of service, among other features.

If the volume goes down on a particular day for a particular store or a group of stores, the routing software allows Fowles to minimize or combine routes to maximize the utilization of each truck and the route.

Fowles adds that due to the delivery style, routes are rarely canceled — even if the store’s order volume is low.

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