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Pepsico: A Trucker In Shipper's Clothing

Pepsico: A Trucker In Shipper's Clothing

If there is one shipper that knows what it's like to be a motor carrier, it's Pepsico, Inc. (NYSE: PEP) chosen by FreightWaves as a "shipper of choice." The $63.5 billion beverage and snack food giant ranks first among U.S. private fleet operators with 11,100 tractors, 17,500 trailers, 3,500 straight trucks and  20,600 pick-ups and vans, according to a 2018 list compiled by Transport Topics. A recent survey by Fleet Owner places Pepsi second in private fleet size behind only telecommunications giant AT&T Corp. (NYSE: T), with 62,400 vehicles–14,300 of them trucks–and 15,000 trailers.

Pepsi's Frito-Lay snack division, which accounts for nearly one quarter of all revenue and is its most profitable business, has for decades been considered one of the best private fleet operators in the world. The U.S. fleet is comprised of about 23,000 vehicles of all types. It operates the nation's largest electric-powered fleet, and more than 560 compressed natural gas trucks, according to the unit's website. Frito-Lay also operates the country's largest direct store delivery network, with approximately 15,000 routes that make over 500,000 weekly service calls on approximately 290,000 customers, according to the unit.

Pepsi is using technology to drive efficiency across its global operations. In its Mexico business, for example, the company "used to call on 22 stores per day on a normal route, [and] by applying technology we're able to increase that to 25 per day," said Chairman and CEO Ramon Laguarta at a consumer goods conference earlier this year. Laguarta assumed the CEO job last fall after long-time Chairman and CEO Indra K. Nooyi stepped down. Laguarta added the chairman's role earlier this year. Pepsi did not reply to a request for comment for this story.

Frito-Lay has installed robotic truck loaders and automated picking for individual small bags at some of our facilities to allow fully automated mixed cases for delivery to small-format stores, Frito-Lay's then-North American COO, Vivek Sankaran, told analysts in April 2018. "This is something we never thought possible five years ago. Technology advances, and now we can pick ‘eaches' with robots," Sankaran said at the time. (Sankaran was promoted to Frito-Lay North America CEO in January 2019 but left in April to become head of supermarket chain Albertsons Cos.)

FreightWaves and Convoy teamed up to present the first annual "Shipper of Choice" Award to a top-notch manufacturer, distributor or retailer. The first-of-its-kind award was created to recognize shippers committed to eliminating inefficiencies from the supply chain and aiming to be excellent partners for their carriers. Nestle declined to comment on the award.

"The Shipper of Choice Award is all about increasing transparency as we highlight innovative best practices that keep freight moving and contribute to a healthy freight community," FreightWaves CEO Craig Fuller said.

Image Sourced From Pixabay


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