There's high-density storage and there's narrow-aisle storage, but Schenker's gone one better: no-aisle storage. Its ultra-dense system stores pallets 24 deep and requires no human intervention.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
There's no standing in the aisles at Schenker's two Toronto-area DCs. There's no stacking pallets of detergent or cases of tea in the aisles either. In fact, there are no aisles in the storage areas of either of these facilities. The two DCs, through which Schenker distributes Unilever's packaged foods and personal care products across Canada, boast ultra-dense storage systems that store pallets 24 positions deep using sophisticated mechanical devices. And because their operations require no assistance from humans, the systems require no aisles.
These distribution systems—designed jointly by Schenker of Canada and its client, Unilever Canada—were chosen for their ability to accommodate Unilever's need for high-volume order fulfillment while preserving the flexibility required by a third-party logistics service provider (3PL) like Schenker. They incorporate several innovative material handling technologies new to the North American market, which required a substantial investment on Schenker's part. But the 3PL didn't let that stand in its way. "They wanted to take their distribution to the next level," says Jason Cunneyworth, senior director of logistics and general manager of Schenker Distribution in Canada, "so we were willing to spend the money to provide the service levels they desired."
As may have become evident, this is no ordinary third-party partnership. For one thing, its roots run deep. The relationship between the two companies dates back to the early 1990s when Schenker began distributing powdered laundry detergent for one of Unilever's divisions. That wasn't an exclusive arrangement, however. At the time, each of Unilever's divisions made its own deals, which meant the company ended up using an array of vendors. That made it tough for Unilever to optimize its processes and manage its inventory levels.
And it prevented the conglomerate from leveraging its size to reduce distribution and transportation costs.
When it acquired Best Foods brands in 2000, Unilever seized the opportunity to centralize its business. It would contract with just one third party, Schenker, consolidating its Lipton and Best Foods brands in a DC Schenker would build in Brampton, Ontario, and consolidating its consumer goods in an older Schenker facility in Mississauga. This deal, through which Schenker became Unilever Canada's largest logistics service provider, would be a long-term agreement. In contrast to the standard five-year 3PL contract, this arrangement would run for double that term, 10 years.
Cool runnings
Once the contract was signed, the planning could begin. The DCs would require some retrofitting, which would be carried out over several years while the facilities continued to operate.
It's important to note that the goal was not a completely mechanical operation."We did not go with full automation in the facilities," says Leonard Bayard, manager for third-party warehousing at Unilever. "It was more of a 'strategic' automation approach." That strategic automation would include major upgrades to storage systems to create semi-automated storage, installation of a layer picking system capable of selecting layers of products for building mixed pallets, and upgrades to warehouse management software and IT systems.
Today, Schenker distributes everything from Lipton's soups and Red Rose Tea to Ragu sauces through the Brampton DC. The 288,000-square-foot center processes 100 orders per day, amounting to some 17 million cases each year. Though the center has only been open a few years, Schenker has already made some modifications. For example, this past April, it dismantled one of the two-level pick towers used for selecting full cases and replaced it with a more efficient layer picker. This unit, which is basically a rail-guided counter-balanced vehicle, uses four-sided clamps to select layers of cases from product pallets and place those full layers onto an order pallet to create rainbow loads of mixed SKUs. The system, which can pick up to 1,400 cases per man-hour, has cut labor needs and reduced damages and is well on its way to achieving its projected return on investment of two years.
The other facility, the 480,000-square-foot Mississauga DC, handles all of Unilever's personal care consumer products, including the Vaseline, Dove, Sunlight, Pond's, Degree deodorant, Suave, Lever 2000, Q-Tips and Salon Selectives brands. This facility processes 50 orders daily, which translates to 13 million cases annually. Like the Brampton site, the Mississauga DC ships about 45 percent of its items as full pallets and 55 percent as case picks.
Although the facility itself is 30 years old, it houses some of the most up-to-date technology on the continent. When it underwent renovations in the late '90s, Mississauga became the first site in North America to feature a semi-automated storage system known as a Pallet Runner system. This technology, which has been used for several years in Europe, was later replicated in Brampton.
The Pallet Runner system, supplied by Pacific Westeel, provides high-density storage of pallets 10 to 24 positions deep and requires a very small footprint. The system, which offers the density of drive-in racking without the need to drive a vehicle into it, could basically be described as a storage area without aisles—you can't get any denser than that. The system operates using small shuttle carts, known as pallet runners, which carry pallet loads deep into the racking.
In operation, lift trucks carry pallets of incoming products to the end of the storage racks. The driver scans a pallet and receives instructions via an RF device telling him which end row the pallet should enter. He then uses the lift truck to place a pallet runner shuttle (there are six of these shuttles in the Mississauga facility) into the slot at the end of the rack where that SKU will be stored. He next deposits the pallet load on parallel rails just above the pallet runner. The driver then presses the "In" button on a remote control that directs the hydraulic lifts on the pallet runner to lift the load a few inches above the rails. The battery-operated pallet runner then shuttles the load down its row to the next available position and hydraulically lowers the pallet onto the rack rails for storage. Once the load is deposited, the pallet runner returns to the beginning of the row to repeat the process until all positions are filled.
When it comes time to retrieve items to fill orders, the products are extracted from the opposite end of the racking. Once the first pallet of an SKU row is removed, a shuttle is inserted to bring the next pallet to the end position, where a lift truck can gather it as well. The system is also capable of performing a "shuffle." In this function, a shuttle is inserted into the racks to automatically index all pallets forward toward the end positions, keeping products ready to be quickly pulled from the storage area.
Saving space and time
The beauty of this system is that it promotes first in/first out processing while still providing very dense storage. The Mississauga Pallet Runner system is five levels high and stores 8,900 pallets that normally contain about 100 different SKUs (one SKU per storage row). That represents an enormous improvement in space utilization. "Within the same footprint, we can store 4,000 more pallets than we could with floor stacking," says Cunneyworth. That's a big plus in Schenker's eyes. "Real estate is an expensive commodity," he notes. "We have to use our space wisely."
The system has proved productive, too. "We're two pallets per man-hour more productive with this system than we were before," reports Cunneyworth. That's because lift truck drivers no longer spend time in the racks performing putaway and picking duties. The pallet runners now take care of those tasks. Plus the lift trucks don't have to wait around while the shuttles carry products to their storage positions deep within the racks; they can be off retrieving more loads from the docks.
Along with improving productivity, the new system has improved safety and reduced product damage. The pallet runner system is more accurate than lift trucks when it comes to placing pallets into their storage positions, which means products are less likely to bump into the racks' sides when entering and exiting. The system doesn't require the high ceilings typically found in dense storage systems. The clear ceiling height in Mississauga is only 28 feet.
Elsewhere in the building, full cases are selected in the pick towers from racks. These cases are placed directly onto a conveyor belt that feeds a shipping sorter. Using recirculation, the sorter can be programmed to route products down shipping spurs according to a particular sequence, such as delivering a single SKU to a pallet or sorted according to expiration dates. The sequence can also reflect the order in which cases are to be stacked, with heavier items, for instance, sorted first so that they can be manually placed on the bottom of a pallet load.
Only the beginning
Along with boosting productivity and improving both safety and handling, the new systems have increased accuracy. Schenker reports that accuracy has increased to better than 99.5 percent from the low 90s just a few years ago. As a result, returns have dropped to about half the former levels.
The efficiencies have also allowed better labor management. "Our labor force has been where the real reductions have occurred," says Unilever's Bayard. "I can't believe how few people work in our warehouses." Those labor savings have contributed to a reduction in overall costs of as much as 20 percent.
Cunneyworth credits communication for the success. "You have to be very involved with your client to understand their business and make sure the cultures fit," he says. Apparently, the cultures have been a good fit. Both companies hope their 10-year deal will be only the beginning of many years of successful collaboration.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.