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Peapod in Warehouse Alliance With Exel Logistics Americas

Peapod Inc. entered into a strategic alliance with Exel Logistics Americas, a supply chain management company, to develop customized warehousing and transportation solutions for Peapod's Internet grocery shopping and delivery service.

Under the agreement, Exel Logistics will provide Skokie, IL-based Peapod with substantial consulting and planning services in connection with the development of warehouse-based fulfillment operations. Financial details were not disclosed.

The services will include fulfillment center site location analyses, routing optimization, facilities and operating process design, and consultation regarding technology requirements for materials handling, inventory management, and routing.

In addition, Peapod and Exel Logistics said they anticipate they will enter into an operating services agreement pursuant to which Exel Logistics will acquire, configure, and operate a Peapod warehouse during 1998. The relationship may extend into multiple metropolitan markets in the future.

"Exel offers Peapod substantial resources that should allow us to implement cost-effective, high-quality fulfillment centers. These centers are critical to Peapod's plan to reduce fulfillment costs, improve service quality, and offer consumer value that will yield increasing membership and order volumes," said Andrew B. Parkinson, president and chief executive officer of Peapod.

Peapod currently provides branded grocery services in seven metropolitan markets in the U.S. and serves approximately 75,000 households. Peapod also offers its unique forum to consumer package goods companies for targeting promotions and advertising at the point of purchase, and for conducting cost- effective research.

Exel Logistics Americas, headquartered in Columbus, OH, has 6,000 associates, 1,000 vehicles, and 25 million square feet of distribution center and warehouse space in 125 operating sites across the United States, Canada, and Mexico.

It is part of NFC plc, a $4 billion international logistics and moving services company based in the United Kingdom.