Target strengthens delivery capability! Increase transportation capacity by using trucks with higher load capacity!

Target improves delivery by using larger trucks with higher load capacity

BusinessDialogue learned that John Mulligan, Executive Vice President and Chief Operating Officer, said on last week’s earnings conference call that Target is increasing the use of larger delivery trucks in the markets served by its distribution centers to increase capacity and create more efficient routes.

Mulligan said that for routes previously serviced by cars, SUVs, and small trucks, more than twice the number of packages can be delivered, and the company’s “large capacity trucks” can provide nearly five times the package service. Target has been testing large capacity truck routes at its sorting centers in Dallas and Minneapolis.

Mulligan said that in the first quarter, about 65% of the final mile deliveries provided by Target’s subsidiary Shipt were made using larger vehicles, compared to zero a year ago. “This has saved us a considerable amount of cost for our overall final mile delivery plan,” he added. It is reported that relying more on large capacity vehicles is just a way for Target’s final mile delivery business to develop more closely to reflect the package carrier process.

Mulligan said that the retailer is also studying “a standardized, faster way to load these trucks, achieve containerization of packages, and easily identify the correct packages during delivery.” This simplifies the driver’s loading process and allows the company to safely bring more Shipt drivers in and out of its sorting centers, thereby improving the final mile delivery capability.

These measures will help the company handle an increasing number of packages flowing through its sorting centers in a more cost-effective manner. The company delivered 26 million packages through these centers in 2022 and plans to double that number this year.

The opening of new sorting centers should also increase the number. In February, Target announced a $100 million investment to expand its next-day delivery capabilities by adding more sorting centers. Mulligan said on the May 17 conference call that the company currently has nine such centers and expects that number to climb to more than 15 by 2026.

BusinessDialogue has learned that Target is making efforts to maximize its next-day delivery capabilities in its sorting centers. Mulligan said the company opened an “expansion facility” in Smyrna, Georgia this month, expanding its presence in the Atlanta market.

Mulligan said online orders outside of Target’s Atlanta sorting center can be transferred to the Smyrna factory. Drivers can pick up these orders in Smyrna and deliver them to other communities.

“With the opening of this expansion facility, our next-day delivery capabilities now cover over 3 million guests in the Atlanta market,” Mulligan said.

Editor ✎Estella/AMZ123

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