DHL to revamp UK operations
The DHL Express division has unveiled a major expansion plan investing £156 million primarily at its East Midlands Airport and Heathrow hubs.
By mid-2016 the development will have upped DHL’s capacity significantly, not simply in terms of scale, but also through efficiency and process improvements brought by a rethink in warehouse design.
Ken Allen Global CEO of DHL Express division said he had made £700m available globally to boost the Express business, so the £156m invested in the UK represents a significant slice of the cake dedicated to the local economy.
£90m will be used to revamp the East Midlands Airport hub, while £32m is earmarked for the Heathrow facility.
The balance will be used to revamp DHL depots throughout the country, with the new Manchester site expected to be open within 4 months.
Phil Couchman, CEO of DHL Express in the UK & Ireland said: “This wave of investment will mean that by 2016 we will be prepared for another 15-20 years of development.”
While the UK economy has improved in recent years, DHL singled out online retail as an important growth market.
Couchman explained: “In last year or two we have seen growth in our traditional business, particularly parcels, in the high single digits. But in online retail we have seen high double digit growth.”
To give some idea of the up-scaling the investment could represent, Couchman added that while the East Midlands hub deals with 150,000 shipments per night at the moment, this could “easily be 500,000 shipments per night” once the work is complete.
As well as increasing the scale of its operations, the move gives DHL the opportunity to consolidate and improve processes.
DHL will bring a nearby service centre and call centre within the facility, which will feature fully automated sortation equipment. The current facility is partially automated.
The new southern Heathrow Hub will contain a distribution centre, a service centre, as well as the head office and is moving to another part of the Heathrow complex.
Change in design approach
The new DC design will feature ‘fingers’ emanating from the central building (somewhat like gates at a passenger airport). These allow lorries to dock straight to the conveyor system and take parcels into the warehouse for sorting.
Couchman explained: “We are moving away from an old fashioned warehouse layout with forklifts, cages and slave pallets to an entirely automated facility with no forklifts.
“The vans (featuring shelves) back up to the conveyors and direct load. The process improvement will allow us to get drivers away an hour earlier.”
DHL is engaging with automated equipment integrators with a view to awarding contracts.
Additional benefits include an expectation that handling will be smoother, damage lower, and internal operations safer.
“The operation in a direct loading facility is quite tranquil compared to one with forklifts,” said Couchman. “We have a good health and safety record but this move will reduce risks.”
