James and the Giant Tiger

At the height of the pandemic, during the great toilet paper shortage, a desperate mom spotted a Giant Tiger truck rolling into her town. She pulled a u-turn and drove up alongside the cab. “Got TP in there?” she hollered over the diesel’s growl.

The driver said he did. The mom followed him to the store and waited with her kids while the staff quickly unloaded the trailer and merchandised the TP so she could buy her share.

This is the kind of service and attention to detail that characterizes Giant Tiger and its whole supply chain staff, said James Johnstone, the discount retailer’s head of transportation.

With 264 retail stores across the country to keep stocked, Johnstone is responsible for a fleet of 160 trucks, 400 trailers, and 300 intermodal containers, 35 sets of B-trains and 60 container chassis, and the 180 drivers who run them across the country.

Johnstone is this year’s winner of the Freight Management Association of Canada’s (FMA) Supply Chain Executive of the Year. The award pays tribute to his vision that has resulted in transportation capabilities expanding some 700 percent in the five years he’s been with the company.

Johnstone joined Giant Tiger in early 2018 as director of transportation, was promoted to assistant vice-president and now is head of transportation for the company.

He came to GT from a career with asset-based intermodal and truckload carriers, and as a consultant to the industry, running his own company. His business, for the three years before joining Giant Tiger, focused on optimizing small- and medium-sized trucking operations.

Johnstone said his first meetings with the GT team really got his mind racing about all the things he could accomplish. “In the initial discussions, just coming from a transportation background, and the other side of the desk, the gears were really going with all the things we could do to make it really special,” he recounted in an interview.

Start small and grow

In 2018 GT had 22 drivers, 20 trucks and 83 trailers in its internal transportation department, known as Tiger Trucking. They handled about 10 to 15 percent of outbound capacity to stores, Johnstone said.

Inbound to the Ottawa DC was largely handled by outside carriers. “We relied heavily on third-party carriers to handle anywhere from 90 to 85 percent of our outbound capacity to stores. Tiger Trucking started in 1987, and we had, I think four to five drivers then. So there wasn’t a whole lot of growth between 1987 and 2018,” Johnstone noted.

Transportation was not seen as a core competency at that point, he recalled. It was well managed, but because GT is a national retail chain, the focus was tight on retail. “We make our money selling goods in stores, not warehousing and not trucking them” he said.

But, with Giant Tiger’s urban stores and smaller footprints, the truck is often the backroom. Most stores get up to six deliveries a week, alternating between fresh, frozen, and hard and soft dry grocery, he explained. That means service is critical to ensuring stores have inventory on time.

Opportunity through analysis

With that reality, Johnstone said one of his first jobs at the company was to analyze the cost of operating the private fleet versus third-party carriers. “After a very thorough analysis, there was an obvious gap between what it cost us to have company drivers servicing the stores, with the high touch points, versus outside carriers,” he recounted.

On top of that, being located in Ottawa meant there was a limited pool of for-hire carriers locally, and when the company moved its DC from Ottawa to Johnstown, at the intersection of Ontario highways 401 and 416, there were even fewer to choose from.

Crunching the numbers proved that Giant Tiger’s in-house transportation team could do the job better, and for less. Numbers aside, however, Johnstone said the service provided by the company’s in-house drivers was head and shoulders above anybody else.

“There was a really strong mantra of top level service to stores, and we never could really get the same performance from outside partners as we could our own people,” he said. “And that was very intriguing, because what’s the difference between driver A and driver B? They’re both being paid to do a job. So there’s some unknown factor. And that factor is that our people really cared.”

Johnstone pointed out that many of the delivery drivers are still with the company today, with more than 30 years of experience. “They know the stores, they understand the importance of serving those communities. They have personal relationships with the store managers, so there’s this level of commitment and it’s not just another gig.”

Insulation

One of Johnstone’s additions to Giant Tiger’s transport capabilities is intermodal capacity. The company’s 300 intermodal containers and 60 chassis allow it to transload goods in Vancouver into its own 53-foot containers, with dedicated capacity aboard eastbound CN trains. “Peak seasons happen and delays happen, and there’s a substantial charge to have dwell time on that equipment, which is understandable. But at some points in the year, it can be enough to pay for your own fleet in terms of the upfront capital,” Johnstone said.

The investment has paid off, especially in times of crisis such as we’ve seen with the pandemic, and the flooding in British Columbia last year that cut Canada’s supply lines. Owning the capacity means never having to give it up to another customer at the expense of a store, Johnstone said. When capacity out of BC disappeared and intermodal rates were higher than team truck rates had been just a few weeks prior, GT was protected, he added.

“We didn’t have to worry about not offloading something and paying. We were totally insulated from that because we had our own capacity, and then we also use our equipment on a for-hire basis to reposition it back to the West,” he said. “So our ecosystem for that move is totally self-contained. Ultimately, any revenue made from that goes back to the stores…offsetting our outbound costs.”

Cutting cost

The added intermodal capacity is just one of the innovations Johnstone has introduced. GT has recently taken over fresh and frozen distribution from a third party. Adding to that, he is converting as many stores as possible to receiving B-train deliveries.

“Rather than having, say, six deliveries a week to Thunder Bay, where you have three hard and soft, and three fresh and frozen, we’re able to deliver on a mixed use trailer. It’s a 31-foot refrigerated lead trailer and a 31-foot dry trailer on the back. And we can deliver dry hard and soft on the rear, and fresh frozen on the front, on the same truck.”

Johnstone said the company is waiting on more reefer trailer deliveries to continue converting stores to the new delivery model. And the savings from cutting half these stores’ deliveries will be significant, with over a million kilometres a year taken off the road.

Long combination vehicles (LCVs) are another of Johnstone’s additions. Right now 15 percent of monthly mileage is on LCVs, and he is working to make the entire fleet LCV spec. To better serve stores in Eastern Canada GT opened a depot in Moncton, New Brunswick, in 2019. Now LCVs make their way from the Johnstown DC to Moncton. From Moncton, another driver picks up the trailers and drives them to the stores. There’s a complicated scheduling dance to ensure all the drivers have enough hours available to complete their deliveries under hours of service rules.

But Johnstone said that his initiatives are cutting kilometres and cutting costs, making it worth the effort. The bonus is reduced environmental impact from the operation, which GT boosts through the use of trailer skirts, aerodynamic fairings, and automatic transmissions.

They’re also replacing diesel powered auxiliary power units with and electronic power units, which provide power from lithium-ion batteries when the engine is off. “We’re seeing a substantial fuel savings in the trucks that have them versus the trucks that don’t,” he said. “And we’re just doing the things that make great sense from a fuel economy perspective.”

People first

Giant Tiger prides itself on being a people-first workplace. Johnstone highlighted the company’s less-than-one-percent turnover rate for drivers, and said its work to develop and promote them gets the credit. “We treat our drivers very well,” he says. “We compensate fairly. We are very big on training, so we’ll upgrade driver skills – and pay – to handle B-trains and LCVs. We have our own in-house LCV trainer.”

GT also has a program that allows workers in the distribution centre to train as drivers. In light of the driver shortage and numbers of people walking away from the industry, Johnstone said the program takes people who already understand the organization’s values and lets them upgrade their skills and pay. Hopefully, he said, the company will keep them around as long as some of the veterans with 30-plus years.

The nine year old within

Johnstone returned to the pandemic toilet paper delivery to illustrate his point. The dedication of Giant Tiger’s supply chain staff made that one customer’s day, and more. But, how many other people became Giant Tiger customers during that time because of the resiliency of the company’s supply chain?

“Without having that great on time percentage and that dedication to the organization, we wouldn’t be there,” he said. “I’m a firm believer that the team that we’ve built truly cares about the organization, and there’s a sense of duty.”

The staff believed they were essential and there was total buy-in from all levels of the organization. “They just did what they had to get things done. Everyone is just as passionate as I am about being here.”

The impetus for the transformation of transportation at GT comes from the kid inside him, Johnstone said. “I really like building stuff. The nine-year-old in me is the answer. What I really enjoy is building that team and having that tangible thing that you can look back at and say ‘We built this capacity, this machine that delivers goods. And it’s super efficient. It looks great. It really represents the company well.’”