New DHL eCommerce fulfillment center in Kansas City (company photo)
DHL eCommerce Solutions, addressing growing demand for its U.S. Postal Service consolidator business, has transferred operations from St. Louis to Kansas City, MO, doubling its footprint in that region as part of a national expansion plan.
By the time the $330 million project is completed in mid-2024, DHL eCommerce will have a 19-node, 2.3 million-square-foot domestic network, up from 1.6 million square feet in 2019, with throughput increased from 450 million parcels per year to 750 million.
Other new facilities are coming online this year in Orlando, Chicago, Phoenix, Dallas-Fort Worth and Cincinnati. The company does direct parcel injections at 11,000 USPS DDUs per day.
The 124,700-square-foot Kansas City facility, which employs 125, has two automated sorters and can process 28,000 parcel an hour. Sitting on 11 acres near the Kansas City airport, the temperature-controlled fulfillment center includes two EV charging stations, LED lighting and a high-efficiency HVAC system. It was completed for $18 million.
New DHL eCommerce facilities in Chicago and Cincinnati will be able to process 50,000 and 40,000 parcels an hour, respectively. Earlier this year, the company transferred operations in Stow, Ohio and Salt Lake City to larger, owned facilities nearby.
Lee Spratt, CEO of Weston, FL-based DHL eCommerce Americas, said while parcel volume has retreated from pandemic levels, it’s still ahead of the baseline of 2019, growing between 5% and 10% in 2023.
“During COVID our volume spiked to from 450 million pieces a year to 550 million,” Spratt said. “We added annexes to support the volume, and we’re currently in the process of consolidating back to single locations where we can. We’ll be in good shape by the middle of 2024.”
Spratt said price and predictability have replaced speed of delivery as the most important factors for consumers in 2023. “Customers are very cost-conscious these days,” he said.
With ecommerce volumes lower, Spratt said, competition for business is the fiercest he’s seen it in his 15 years with the company. “Carriers are doing everything they can to retain customers, and selectively trying to grow the base where possible,” he said.