For e-grocery businesses, being able to optimise route planning to meet customers’ increasing demands for fast and convenient delivery is crucial. Even more important, however, is being able to do this without increasing costs. As a global integrated food solutions group and the world’s leading meal kit company, HelloFresh has found that since switching from PTV Route Optimiser to PTV OptiFlow for route planning, their transportation costs have actually decreased. In addition, they’ve been able to offer a better experience for their customers whilst reducing CO2 emissions.
HelloFresh operates under eight different brands in 18 countries across three continents. Their operational model for meal kits allows customers to choose each week from different recipe options (in the Benelux region, they can choose from 40). Based on this, they order exactly the amount of ingredients needed to fulfil the orders and ship them straight from the supplier to their packing centres. From here, they deliver them to customers using their dedicated fleet – the largest refrigerated electric fleet in Europe.
From a logistics planning perspective, the challenge is great. In Benelux, customers across three of HelloFresh’s brands can choose delivery slots of between two and four hours. To manage these deliveries requires a route optimisation tool that can handle a high level of complexity. In this case, they chose PTV OptiFlow.
According to Jasper van Dooijeweert, Associate Director of Transport Planning at HelloFresh Benelux, there were three key reasons for selecting OptiFlow: to enable automation of the planning process so the team can focus on more strategic projects; to move to a cloud-based system that provides a more reliable service and that allows employees to work remotely; and finally, to use best-in-class technology when it comes to performance. For Jasper, OptiFlow ticked all these boxes. “We recently benchmarked our last-mile technology partners, and we find that PTV Logistics continues to come out on top and outperform the competition in value and ROI.”
During a recent webinar, Jasper joined Oliver Mangas, Director of Operations and Mark Ulrich, Principal Product Manager from PTV Logistics to discuss HelloFresh’s experience of switching to PTV OptiFlow and the positive impact it has had on the business.
How did you find the migration to PTV OptiFlow and what has been your experience of using it since?
“When we still used PTV Route Optimiser it took new transport planners quite some time to learn how to best create routes and navigate their way through all the menus and settings. The user interface of PTV OptiFlow is much cleaner and simpler to understand and we have noticed that after just one or two days a planner is capable of planning using PTV OptiFlow on their own.
While most of the planning process is automated, it still is possible to make manual adjustments to our orders or vehicles straight from the user interface. This is something that we still use on a daily basis. For example, during Carnival in the south of the Netherlands recently, we had to manually adjust routes to plan around the busy city centres.
In general, the continuous evolution of our transportation strategy [with PTV OptiFlow] has not only kept pace with our soaring order volumes but has elevated our operational capabilities to new heights.”
What operational changes have you made since implementing OptiFlow, and how have they benefited your company?
“Since PTV OptiFlow is cloud-based, it allows our planners to work remotely, giving them the flexibility to work from home or at one of our distribution hubs, where they can be in close contact with the operational teams. Our planners are required to work during the weekends, which turned out to be a blocker for candidates during our hiring process. By allowing them to work from home during weekends, this has become less of a blocker.
Additionally, thanks to the automation of the planning process and fast optimization times using OptiFlow’s power engines, we spend less time on a daily basis to create our operation plan. This leaves more time for our planners to work on initiatives that improve our delivery service to our customers or strategic scenario planning to see how we can further optimize our delivery network.”
How have your transportation cost savings improved since using OptiFlow?
“Directly after switching from PTV Route Optimiser to PTV OptiFlow, we saw a cost saving of 7%. Not only did we manage to save on kilometers and driving hours, but also the number of vehicles we needed decreased due to a better fill rate. Whereas with PTV Route Optimiser the planners had to do a lot of manual work and make a lot of decisions themselves, creating the routing in OptiFlow is completely automated.
In recent years we have worked together with the PTV team to increase the complexity the system is capable of handling. When we started with PTV OptiFlow we still had to manually allocate our orders to our distribution hubs, but thanks to various upgrades this is now no longer the case and PTV OptiFlow can determine the most optimal distribution hub for our deliveries, bringing in 4% additional cost savings.
With our continued partnership with PTV Logistics in the past four years, we’re now saving 16% of our transportation costs. This remarkable saving is attributed to the ongoing enhancements of the product, empowering us to efficiently manage an increase in volume of orders, while continuing to improve our delivery service offering to our customers.”
How have you been able to transform your customer relationships and give yourself a competitive edge?
“We aim to deliver a premium delivery experience by offering our customers the flexibility to choose delivery time slots that align with their schedules. Utilizing the capabilities of OptiFlow’s power engines, we can efficiently manage the complexity of providing narrow time slots, typically spanning just a couple of hours. Furthermore, ensuring the accuracy of our communicated arrival times is paramount for achieving customer satisfaction.
By integrating PTV OptiFlow’s predictive traffic data into our logistics planning, we consistently achieve an impressive 93% delivery accuracy, with our meal boxes arriving within 30 minutes of the scheduled time.”
Tell us more about your sustainability goals and the progress you’ve made here?
“At HelloFresh, we want to become the most sustainable food solution at scale and are committed to providing a more sustainable way to buy, prepare and enjoy food. That’s why avoiding and reducing emissions is an integral part of our corporate strategy.
We follow a holistic approach to decarbonise our supply chain. Besides further minimising food waste, innovating and reducing packaging and transitioning to renewable forms, investing in decreasing emissions caused on the last mile is a very important pillar in HelloFresh’s decarbonisation efforts.
PTV OptiFlow has helped us lower the number of planned kilometres by over 20% compared to planning created by PTV Route Optimiser. The planning optimizations also simplify the use of green energy and local delivery: we have largely transitioned our benelux fleet from diesel to electric vehicles in recent years, as range and charging are considered in the route planning software. This has enabled HelloFresh Benelux to increase the number of e-vans powered by renewable energy, which led to 72% emission-free deliveries in 2023 on average, up from 48% in 2022 and 10% in 2021. Our goal is to make that 100% the upcoming years.”
What is your future vision for the transportation market and how will technology make a difference for you?
“Our vision of the transportation industry is one where transportation is no longer about trying to get from point A to point B as cheaply as possible, but one where every aspect of the journey should be considered. Think about leveraging driving behavior data and weather conditions to accurately predict the range of electric vehicles and optimize the charging during or in between routes.
Next to this technology also plays a crucial role in improving our communication to the end customer, by leveraging real-time traffic data, artificial intelligence, and machine learning we can continue to increase the accuracy of our planned arrival time. Technology providers like PTV play a crucial role in making all of this happen.”
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As Jasper highlighted, the relationship with PTV Logistics over the last four years has not just been that of supplier and user, it’s more of a partnership. “PTV Logistics offers us not only a solution, but they are a dynamic partner propelling our success story to grow our business and meet the important needs of our global customers.”
As we continue to develop our software to meet the changing needs of valued customers like HelloFresh, we can’t wait to see what they’re able to achieve.