Hermes Opens Big Ticket Distribution Center in Germany

germany-flag-button-300Hermes Fulfilment GmbH and Hermes Einrichtungs Service GmbH & Co. KG have officially opened their new distribution center in Löhne.

Offering 100,000-sq-m of warehouse floor space, this complex is one of the largest new developments in North Rhine Westphalia. It has been specifically designed to serve the needs of the logistics processes associated with the handling of furniture, large electrical appliances and other large items.

Every day as many as 30,000 shipments of big and bulky goods such as sofas, washing machines and flat panel TVs are prepared for shipment and dispatched from this new building to be sent to consumers in Germany and neighboring countries.

With this new facility the Hermes Group is repositioning itself in the growing bulk storage and distribution market: Hermes Fulfilment’s warehousing and returns management and the goods handling of Hermes Einrichtungs Service have been brought together under one roof for the first time. Project developer ECE has invested €90 million in the property.

With their new development both of these Hermes companies are catering for the particular needs of the 2-man delivery service – an area that has experienced constant growth in recent years. In the 2015 financial year the volume of furniture and large electrical appliances shipped by Hermes rose by 15 per cent when compared with 2014 to stand at 4.5 million. Since 2009 this figure has almost doubled.

“2-man delivery services have benefited enormously from the boom in the online retail sector. Today customers expect more and more additional services when they shop online: they want fast deliveries, a wide range of choice and assembly services,” said Otto Group executive director services and Hermes Europe GmbH supervisory board chairman Hanjo Schneider: “This new building will enable us to continue to grow our business successfully and sustainably and further strengthen our leadership position, both within the market and in terms of quality.”

The distribution center covers an area of 100,000-sq-m and took about one year to complete. Hermes Fulfilment uses 64,000-sq-m for warehousing and picking. Trucks delivering large items can pull up at one of the 46 loading bays. The majority of the items are stored in ten meter high shelving units, with storage locations for 54,000 pallets. Reach trucks are used to place the items in stock. Returns are checked by Hermes employees in a 20,000-sq-m returns center specifically designed for large items. In an adjoining workshop items can be cleaned and refurbished as and when necessary.

A bridge connects the warehouse area administered by Hermes Fulfilment to the 16,000-sq-m central shipping hub operated by Hermes Einrichtungs Service (HES).

This area has more than 110 loading bays at which approx. 245 trucks can be loaded per day. This means that some 30,000 shipments of big and bulky goods leave Löhne every day to provide customers with a 2-man delivery experience. “The two companies have grouped together their shared service offerings in the same area for the first time,” said HES executive director operations Michael Dildey, emphasizing the distinctive capabilities of the new distribution center.

Until now storage and handling took place at two separate locations in Löhne. This meant that large items needed to be brought from various external warehouses to the central shipping hub. “The fact that warehousing and transportation services have now been consolidated under one roof constitutes a distinctive competitive advantage. This situation is unique in Germany’s 2-man delivery segment,” said Hermes Fulfilment executive board chairman Dieter Urbanke. “This new spacial form makes it easier for us to achieve the service targets which have been agreed with our online retailers. All in all our overall performance will increase significantly because the entire process from the goods-in to the goods-out area is far more efficient,” Urbanke said.

Grouping together the warehouse and the central shipping hub will not only improve internal processes but will also benefit the environment. The reduction in traffic between the various sites will cut carbon dioxide emissions by 300 metric tons a year. To promote energy efficiency all of the warehouses and offices have been equipped with LED lighting. This lowers CO2 emissions by a further 550 metric tons a year.

The distribution center has 180 designated spaces for containers and other interchangeable units. 110 of these spaces have been roofed over to provide sound insulation. Furthermore, eight meter high acoustic barriers have been erected to keep noise from escaping to buildings in the immediate vicinity. So that the warehouse complex blends better into the landscape more than 7,000 trees have been planted on the site.

Together, Hermes Fulfilment and Hermes Einrichtungs Service employ some 1,000 people in Löhne, making them one of the largest employers in the area.

Hamburg-based property developer ECE looked after the entire project right up until the keys to the complex were handed over. The new distribution center is owned by Tilad, a Dubai-based multi-family office.

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