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
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
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
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-
Exel Logistics Americas, headquartered in Columbus, OH, has 6,000 associates,
1,000 vehicles, and 25 million square feet of distribution center and
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.