Restaurant operators can consider several parts of their distribution networks to minimize the effect of rising logistics and fuel costs, such as delivery frequency, shipment size and route optimization, according to supply chain experts.
Bill Krogstad, managing director at FTI Consulting, said restaurants should look at how often the deliveries take place and how much product is moved during each drop, speaking at a virtual event hosted by Restaurant Dive and Supply Chain Dive.
The issue has come to the forefront as shippers encounter a range of logistics challenges in 2026 including rising fuel and diesel costs. The disturbances in the Strait of Hormuz have put pressure on oil supply and transportation costs have become even more uncertain.
Gas prices were $4.47 per gallon as of Sept. 29, up $1.35 year-over-year, according to data from the Energy Information Administration. Diesel prices climbed to $6.38 per gallon during the same period, a $2.63 increase from the year prior.
One opportunity relatively simple is re-think frequency of delivery.
“If you can move a store from a restaurant from five deliveries a week to four, you’re obviously going to get some fuel savings right there,” Krogstad said.
However, restaurants need to think about the trade-offs of reducing the number of deliveries, such as available storage capacity and how often products need to reach individual locations.
Route optimization can also be key to keeping fuel consumption in check. It also enables restaurants and their logistics partners to evaluate whether trucks are being used efficiently and whether enough locations are being served on each trip to make the route economically and operationally viable.
“Really looking at your route optimization, making sure you’re getting as many restaurants on a truck that will fill that truck [and] make sense logistically I think is critical to reducing your fuel expenses.”
Another choice is freight consolidation, especially for smaller companies that don’t have enough volume to fill a truck. Less-than-truckload services reduce the entry cost of transportation by sharing capacity among shipments from multiple customers.
But the approach can also have trade-offs, such as more stops and possibly longer transit times.
Transportation providers are also seeking to recoup higher operating costs, and are passing on fuel surcharges from ocean carriers and parcel carriers. Krogstad said reviewing existing freight agreements could therefore be another opportunity to identify savings.
Some fuel surcharge agreements were negotiated years ago and may not have been revisited since. Companies should therefore review the suitability of their existing contracts and whether the terms still apply in the current market environment.
Beyond frequency of delivery, restaurants can be more segmented in their distribution networks.
“Companies can segment the delivery frequency and drop sizes based on specific characteristics of their networks,” said Dheera Anand, partner at Bain & Company. This could include grouping SKUs by volume, geography and service levels required.
Existing capacity can also be better utilized by improving the utilization of trucks and distribution centers. Efficient routing and improving mileage on delivery routes can further help in reducing transportation expenses.
“Early warning systems” is another area of increased focus, which can provide greater visibility and support exception management.
When restaurants and their logistics teams can identify potential disruptions before they affect operations, they have more options to respond.
“If you can see a late shipment or a capacity constraint a little bit earlier, then you have more options to reroute, to transfer at potentially a lower cost than you do when it’s happening right in the moment,” said Anand.
More visibility can also aid with scenario planning, especially when fuel prices can quickly change the economics of a supply chain.
“Fuel costs can be very volatile and can dramatically change your economics on sourcing, locations, delivery, cadence and your network configurations,” said Anand.
Restaurant supply chain teams can use scenarios for different fuel-cost situations to understand how transportation costs could impact their total cost-to-serve. Rather than merely reacting after costs have increased, companies can plan for potential changes and assess different sourcing, delivery and network configurations in advance.
