DHL leans into automation in new Chicago e-commerce facility

DHL leans into automation in new Chicago e-commerce facility

August 16, 2023

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Dive Brief:

  • DHL eCommerce has opened a new distribution center in Melrose Park, Illinois, as part of the company’s five-year growth plan, according to an emailed press release to Supply Chain Dive.
  • Beyond capacity expansion, the 352,000-square-foot facility has an automated Honeywell cross-belt loop sorter capable of processing up to 40,000 parcels and packages per hour.
  • The logistics provider has recently built or relocated 11 warehouses, with seven more expected to be completed at “some point next year,” Scott Ashbaugh, VP of operations at DHL eCommerce, Americas, told Supply Chain Dive in an interview.

Dive Insight:

After a spike in volumes during the pandemic, DHL realized it was on a different “flying altitude” in terms of how much it was putting through the system.

Two things were certain, the logistics provider did not want to split volumes into multiple sites nor have a lot of different components in one building because of the difficulty in orchestrating several volumes in multiple steps and in different parts of the building, Ashbaugh said. The loop sorter “really integrates all the steps that we need to do to process the package into really one continuous flow.”

At a Cincinnati, Ohio, distribution center, a loop sorter is being tested to process up to 50,000 parcels and packages per hour — 25% more than the Chicago location.

Chicago area shippers and consumers have the DHL eCommerce facility as a hub to ship origin and destination domestic parcels, Ashbaugh said. “But it’s also one of our three U.S. gateways where we export parcels out to the rest of the world,” he added. “And so we’ll bring in parcels from all over the United States into Illinois, Chicago, and New Jersey.” 

In these locations, DHL will run different processes to get packages ready for export and delivered to consumers abroad. While the loop sorter doesn’t handle international parcels currently, it could be integrated into the process down the road, according to Ashbaugh.

Automation was a key investment area in DHL eCommerce’s $300 million expansion plans announced in 2021. Lee Spratt, CEO of DHL eCommerce’s Americas region, told Supply Chain Dive at the time that the company would be installing two loop sorters in Chicago and Cincinnati, and 26 line sorters at 19 facilities across the country.

Correction: This story has been updated with the correct name for DHL’s e-commerce division.

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