Dive Brief:

• Dollar General aims to more than double its private fleet size by the end of 2022 to drive greater operational control and cost savings, COO Jeff Owen said in a March earnings call.
• The retailer's in-house fleet consisted of more than 700 tractors as of last year, Owen said. By the end of 2022, the private fleet is expected to account for about 40% of its outbound transportation, up from 20% at the end of 2021.
• "Importantly, we save an average of 20% of associated costs every time we replace a third-party tractor with one from our private fleet," Owen said.

Dive Insight:

Dollar General's private fleet has been expanding rapidly since its launch several years ago — in fiscal year 2017, the company had just 70 tractors. The fleet's growth in 2022 "will become an increasingly significant competitive advantage" for the company, according to Owen, who added that the company is in the early stages of the initiative.

"First of all, our drivers are on the same team as our store teams, our merchant teams, and that certainly just brings a better service to the overall operation," Owen said of the benefits of a larger private fleet. "But also, it allows us much more flexibility in our control over the environment."

Other companies have expanded their private fleets for similar reasons amid an environment of limited capacity and high spot rates.

Despite the costs associated with maintaining a fleet, many shippers consider in-house trucking an advantage in terms of customer service and cost control, according to a 2021 National Private Truck Council survey. For Pitney Bowes, which is undergoing its own fleet expansion, using in-house transportation can cost just $600 a lane versus contracting a spot market driver, which costs up to $4,000.

Most of Dollar General's merchandise is delivered to its stores by a combination of its private fleet and third-party trucking firms, per its annual report. To fully realize the savings from its fleet expansion, the company will also need enough drivers to staff the new trucks.

In September, the company said it would offer a $5,000 sign-on bonus for people accepting driver positions in its private fleet through Jan. 28. Dollar General's website says its drivers can earn up to $90,000 a year. The company is also facilitating driver training programs for associates who want to become private fleet drivers, according to Owen.