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Story URL: http://www.silicon.com/retailandleisure/0,3800011842,39264247,00.htm

Tesco.com vans cut fuel bills with telematics tech
Price hike steers changes in driving technique

By Julian Goldsmith

Published: Friday 25 July 2008

Tesco.com has upped delivery rates and reduced fuel consumption of its delivery vans - by 10 per cent in both cases - using new telematics technology.

The online arm of the UK's leading supermarket chain has a fleet of 2,000 vans operated by 6,000 drivers making more than 70,000 deliveries per day.

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Tesco.com has struck a multimillion-pound deal with supply chain specialists Microlise to deliver a telematics system that provides real-time information on van routes, fuel consumption, engine revs, speed and odometer reading.

With this data the retailer has been able to alter driver behaviour through an advanced driver training programme, called Excellent Delivery, currently being rolled out across the Tesco store estate.

Speaking to silicon.com, Tesco.com fleet manager Dino Papas said the implementation had primarily been driven by the increase in fuel pricing but also had a part to play in improving customer service.

He said: "This is the first time we had seen a system that could do everything we wanted but if we could make a fuel consumption improvement, that was an obvious way to pay for the technology."

Tesco conducted a trial of the technology over the end of last year and early this year using 200 vans, which revealed the fleet could make an additional potential 50,000 deliveries per week.

The full roll out of the technology and of the driver training programme is expected to be completed before the holiday season at the end of the year.

Papas explained that, rather than feeling spied on, the drivers welcomed the move, which was made in consultation with driver unions.

He said: "Because they are out of the store most of the day, the drivers can end up feeling not part of the business. This programme has made them feel wanted. As a result we are distancing our delivery service further from the 'white-van man' stereotype, which improves the level of customer service we can give."

Papas told silicon.com the system may be used in the future to flag up alarms on the condition of each van's engine, allowing vehicle maintenance to be organised much more efficiently.

However a function that is likely to come on line before that is one to allow customers to track the progress of their own deliveries.