DHL divisions in the US linking the entire e-commerce supply chain are ready for what the logistics giant says can be a 40 per cent surge in volumes during the Black Friday, Cyber Monday and the 2018 holiday season as e-commerce growth continues to flourish.
US retailers are preparing for another record holiday shopping spree, growing more than 4.0 per cent with total sales predicted to top USD 1.0 trillion this Christmas season, boosted by promotions such as Black Friday and Cyber Monday. Online sales are expected to accelerate at an even faster clip, growing nearly 17 per cent from last year, according to DHL.
To boost productivity and meet the surge in volume, DHL is adding more automation and bringing innovative technologies including using collaborative robots in fulfilment centres that help staffers gather the products needed to fill online orders more efficiently, introducing chatbots to answer customer questions more rapidly and adding more automation to its distribution centers to quickly sort and get parcels ready for delivery.
In New York, DHL couriers will be collecting packages from automated delivery depots and beating the traffic to get them to customers’ doorsteps.
Says Greg Hewitt, CEO for DHL Express US: “We define peak as the period right after Thanksgiving through to Christmas. We really see volumes go up around the globe at this time.”
In the US, DHL’s busiest day of the year for outbound shipments is 26 November – Cyber Monday – and its busiest inbound day will be 17 December – the last Monday before Christmas.
DHL eCommerce’s new automated distribution center in northern New Jersey, one of the company’s 19 distribution centers along with three fulfilment centres in the US, provides the last mile delivery solution for online retailers. For these merchants, logistics is the back-end support that provides a significant part of the consumer experience, DHL notes, adding that the new centre will be launched at the end of November.
Lee Spratt, CEO for DHL eCommerce Americas adds: “This season will probably be stronger than 2017. The market is growing at 10-15 per cent. I expect a minimum of 10 per cent growth on peak volumes vs. last year, but wouldn’t be surprised to see it hit 20 per cent.
“The peaks are Black Friday and Cyber Monday – around these days we see a dramatic increase in orders. The volumes usually show up on the Saturday and Tuesday directly after these days. This is when we need the highest amount of labor in our facilities and our operations at full power.
“Consumer expectations are high – they want to receive their orders just as on any other shopping day – and this is a defining moment for many retailers in winning and retaining business, so it’s critical that delivery providers meet their commitments.”
At Chicago’s O’Hare International Airport and John F. Kennedy International Airport in New York, DHL Express workers will be loading American goods onto pallets and freighters for export to consumers in Asia and Europe.
Says Mike Parra, DHL Express Americas CEO: “Many of our customers are shipping to the UK, Australia and China. These are key trade lanes, but the rest of the world is still important. A large portion of our growth is now coming from e-commerce and our fast-growing retail channel.
“In line with the growth we’re seeing over the first and final mile, we’ve made recent investments, for example, in expanded facilities in Tucson, Arizona, Ontario, California, and Baltimore, Maryland. We’ve also invested in air capacity – our customers want speed to market for their own customers, so we have invested in new flights to Vancouver, Lima and Bogota.”
At the Port of Miami, DHL staff will be supervising the offload of containers filled with consumer goods from trading partners around the world.
Says David Goldberg, CEO for DHL Global Forwarding US: “The peak season usually starts a bit earlier for the forwarding industry, as customers reposition inventory to their fulfilment centres in the US ahead of time in consolidated freight consignments.
“Last year, we saw an extremely strong peak in the fourth quarter, with a capacity crunch in air freight and ocean freight, and rates going up by more than 100 per cent versus previous months. Now, with the tariffs, inventory is getting pushed forward, so the peak has started even earlier and become more elongated.
“We are seeing tight capacity in transpacific ocean freight, in particular, which is one of the main trade lanes during the holiday season. And air freight capacity has tightened in recent weeks. Both capacity and rates are tight overall,” Goldberg adds.
And in Columbus, Ohio, DHL warehouse associates will be working with several innovative technologies that help them make sure that the right products are in every order and get them on the road as soon as possible.
Vision Picking is among the technologies that DHL is using. These ‘smart glasses’ are an augmented reality tool that provides staff in warehouses with the location of products needed to fill orders; helps reduce pick time and increase order picking accuracy thus providing productivity increases of up to 10 per cent. It also helps reduce employee training time.
DHL is also working with collaborative robots which can see, move, and work alongside people. Made by Locus Robotics, LocusBots are used in e-commerce fulfilment operations, helping staffers locate products for orders and ferrying them from warehouse aisles to the shipment prep area. With the bots, order pickers don’t have to push carts or carry heavy bins. LocusBots are used in several DHL warehouses.
Scott Sureddin, CEO for DHL Supply Chain North America says: “The expectation of next-day or two-day delivery is compressing order cycle times and challenging everyone in the supply chain to become more efficient and adaptable to change. The first thing our e-commerce customers want is quality and operational excellence with a continuous improvement culture.
“They also want experts who are leaders with emerging technologies, who can help them to find ways of improving efficiencies and productivity. And they want agile solutions, which will allow them to respond to changes in their market and business needs.”