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Executive Summary:
Tractor Supply Co. has announced a multi-year initiative to enhance its last-mile delivery operations by transitioning more bulky item deliveries to its in-house network. During a recent investor presentation, EVP and Chief Supply Chain Officer Colin Yankee detailed plans to establish “hub stores” that will integrate drivers and inventory from various facilities to streamline deliveries.
Currently, 90% of the company’s 5 million annual final-mile shipments occur within 40 miles of a Tractor Supply store. The initiative leverages the company’s extensive store network and mixing centers to create a highly flexible, asset-light delivery model. Deliveries will range from lighter loads to multi-pallet shipments, ensuring a broad capability to meet customer needs.
Key advantages of in-house delivery include significantly lower product return rates—10 times less compared to external carriers—and a 13% increase in customer satisfaction scores. These benefits align with Tractor Supply’s focus on improving customer experience and operational efficiency.
The rollout will occur in phases:
- 2025: Establish the final-mile team, implement routing and scheduling technology, and expand test markets.
- 2026-2027: Scale coverage area and integrate complementary services with third-party providers.
- 2028-2029: Increase in-house delivery volume, launch premium services, and improve route density to reduce costs.
By the decade’s end, Tractor Supply aims to handle 90–95% of large-item deliveries in-house, a significant increase from its current 15% coverage, while reducing reliance on external carriers like FedEx, UPS, and Roadie.
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