KeHE: Delivering natural foods with PacLease

Founder Art Kehe’s philosophies still permeate throughout all aspects of KeHE Distributors’ wholesale business—almost 70 years after the company started out as a local food distributor in 1952.

The common thread is plainly stated in its mission: “We SERVE to make lives better.”

For KeHE, that means remaining employee-owned, staying focused on meeting the ever-changing needs of retail and supplier partners, giving a portion of net profits to a separate foundation, KeHE Cares—with donations going to charitable organizations—embracing its Certified B Corporation status (decisions based on workers, customers, suppliers, community and the environment), and using technology to stay innovative.

Today, KeHE runs an impressive operation with more than 5 million square feet of warehouse space within 16 North American distribution centers—13 of which are in the U.S. It distributes natural and organic, fresh and specialty food products to more than 30,000 stores, with a fleet of more than 550 Class 8 trucks. It’s one of the largest wholesale food distributors in the country, with a flexible outbound shipment approach that provides its customers with a high level of support, efficiency, and order accuracy.

“We have a 96% overall on-time delivery rate to customers that include Safeway, Publix, Fresh Thyme, and our largest customer—Sprouts Farmers Market,” said Tom Harden, KeHE’s senior manager of fleet assets. “Our fleet of trucks, all on a full-service lease, have to be dependable—truck reliability and uptime are critical to us in meeting time-delivery windows. And we need trucks that our drivers like to drive.

“We want their workspace to be as comfortable as possible.”

Financial freedom

While the company finds full-service leasing attractive for a variety of purposes, it’s the ability to have quality equipment—with maintenance provided—that makes Harden happy. “We get top-of-the-line trucks without having to invest in our own shops for maintenance,” he said. “Leasing frees us from that.”

For the past several years, the company has utilized PacLease as part of its transportation solution. A former driver himself, Harden was drawn to Kenworth equipment. “It’s the No. 1 preferred brand by drivers,” he maintained. “I like to test what I plan to lease, and I could see why the Kenworth T680 was so highly regarded when I got behind the wheel. I wish that I had been able to drive a Kenworth during my driving days. My philosophy as fleet manager is to provide trucks that our drivers want to drive. I feel our Kenworths, and how they’re spec’d with high-content driver comforts, are helping us keep our drivers happy, and with KeHE for the long haul. Granted, our drivers are some of the best paid in the industry, but equipment is also very important to them. They deserve a quality truck.”

When trucks come up for replacement, Harden and the local fleet manager figure out the best solution for the region. “Overall, we run 70% daycabs, but do run some longer hauls in certain areas, so we also lease sleeper units,” he said. “We lease from PacLease in six locations currently and are looking at expanding. We just placed 21 T680s in Atlanta.”

According to Harden, general baseline specs are determined for the fleet, and then modified for each region. “Each area is different,” he said. “On the East Coast, they’ll see more snow, so they need a specific bumper system. Other areas are more mountainous, so we need higher horsepower and more torque. Generally, we run between 400 and 450 hp, and we’ve gone to automated transmissions. That helps with new drivers, plus helps with fuel economy. We also have recently gone with the Bendix Wingman Fusion system with side detection. I personally drove a T680 with the system to see how it all worked. I was impressed.”

While the Kenworths have been a big hit with drivers, they’re also making an impact on KeHE’s fuel usage and environmental impact. “With a fleet our size, we track all the metrics—we’ve been getting a 1⁄2 mpg better in fuel economy with the T680s as compared to other brands we’re running,” Harden said. “That’s substantial when you consider the almost 50 million miles we ran last year. We have 720 drivers, so in some of our areas we run a slip seat (two-shift) operation. It also allows us to make strides on our sustainability initiatives to reduce our emissions.”

Meticulous maintenance

Keeping trucks moving with minimal downtime has been aided by a meticulous maintenance program. In five of the locations utilizing PacLease, the leasing company performs preventative maintenance services at KeHE distribution centers. In Chino, California, PacLease personnel retrieve trucks at KeHE and perform maintenance services back at its own shop. “Truck utilization is extremely high, and the maintenance schedules don’t slow us down,” Harden said. “And, if there ever is a truck in the shop for an extended period, PacLease has us covered with a substitute vehicle program. So, we can always make deliveries.

“Trucks are mechanical, so there will always be cases for repairs, but technology helps us keep an eye on how everything is running so we can be proactive. The T680s have remote diagnostics, so if there ever is a fault code that is triggered, we’re alerted right away and can figure out what the issue is, and more importantly the course of action. Our driver can call PacLease, report the fault light, get a diagnosis, and then continue on or go to a PacLease facility for a repair. This is a far cry from the early days when an engine light meant shutting the truck down and calling a tow truck. Increased drive time means increased efficiency and more on-time deliveries to our customers.”

According to Harden, the technology in his Kenworths rival the technology the company uses for running loads. “We have static and dynamic routing,” he said. “The goal is to max out our 53-foot trailers. Some truckloads might go to two stores, while others might make smaller deliveries to 15 stores. Space is money—the more product we can load the better our operation. It’s a big puzzle that we have a handle on through routing software. Like with our fleet of trucks, maximum utilization is the ultimate goal.”

Reflecting, Harden said he’s been pleased with how PacLease has been a dedicated “partner” from the get-go. “PacLease has our back,” he said. “We care deeply at KeHE about our customers and PacLease has been a great partner caring about us. The PacLease National Account Team has brought its local franchises together to work our account and it’s gone very smoothly. There is accountability and each location treats us like we’re their most important customer. It’s why we look to continue to grow with PacLease.”

Eyeing the future

Being a Certified B Corporation means looking out for the environment. Harden said his transportation department is being faithful to that obligation. “We’re developing sustainability initiatives to reduce our carbon footprint as much as possible by 2030,” he said. “Right now, we’re testing CNG in the Southern California market with five Kenworth T680s from PacLease. We’re using only recycled natural gas, which eliminates the need for fossil fuel.”

Looking further out, Harden sees a possible match to go full electric. “We’re also talking with PacLease about electric trucks and the Kenworth T680E, which is zero emission,” he said. “Technology is changing rapidly, and we always like to be on the forefront. We owe that to our customers and to the environment. If it’s good for the environment, it’s also good for business. I think our founder, Art Kehe, would be impressed with what his company has become, and where it’s going.”