Deutsche Post in €750m plan to deliver parcels as fast as letters

Deutsche Post DHL announced plans today for the biggest investment in its domestic parcels network since the 1990s. The company said it will invest EUR 750m in its processing centres and restructure its entire transport network – so that parcels can be delivered anywhere in Germany “as fast as we can deliver a letter today”.

The major investment in Deutsche Post’s parcels unit is directly related to a “booming” market for e-commerce in Germany, where parcel volume growth has gone from a 3.5% yearly average to a near-10% year-on-year growth rate in the first half of 2011.

The move is also in response to changing consumer behaviour and expectations for shipping services.

Plans will mean rapid transport for perishable items such as food products, reliable transit for sensitive goods and efficient cross-border return services, the company promised.

New sorting systems have already been piloted in three parcel centres in western and southern Germany that have achieved a 40% improvement in processing speed.

Similar systems – including next-generation scanners, partially automated vehicle unloading systems and sorting technology – are now to be rolled out to a further seven centres.

Processing rates are expected to immediately increase from a typical 20,000 parcels per hour level to 28,000 per hour with the upgrades, with Deutsche Post aiming to see some of its centres achieving as much as a 50,000 per hour rate.

On the transport side, Deutsche Post has already purchased an additional 6,000 new parcel delivery vehicles ahead of its restructuring of nationwide transport systems that will include a redesign of Germany’s 650 parcel districts.

Jürgen Gerdes, Deutsche Post DHL’s Mail division board member said business and residential customers will benefit from the “dramatic improvement” in parcel services

“Our customers are going to see a dramatic improvement in our already market-leading quality and reliability,” said Jürgen Gerdes, the company’s Board Member for the Mail division.

“Our goal in the future is to deliver a parcel anywhere in Germany as fast as we can deliver a letter today.”

Second pillar

Parcels already represent a fifth of Deutsche Post’s mail revenues, with DHL Parcel handling more than 2.6m parcels each day – an amount that doubles in the run-up to Christmas.

Deutsche Post said its investment programme would reposition parcels as the “second pillar” within its mail division, after traditional mail – building a “powerful platform” for further growth.

Along with the pilot processing plants in Greven, Kitzingen and Neuwied, the next wave of upgraded parcel processing centres will be those at Aschheim, Augsburg, Bielefeld, Dorsten, Hagen, Regensburg and Saulheim, where improvements will be seen as soon as this festive season.

Deutsche Post will adapt its transport system so that packages can be fed into the mailstream a lot later in the day and in much higher numbers than they can today.

State-of-the-art software systems will also mean customers have the greatest possible access to real-time parcel tracking information, the company said.

Last week, Deutsche Post also revealed its intentions to considerably expand its network of automated parcel collection stations, called Packstations.

Gerdes said: “With the click of the mouse we will be able to offer a considerably more efficient and flexible parcel delivery service, reducing all the while our carbon emissions and offering modern services for a new type of consumer. Both business and retail customers alike will benefit equally from this.”

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