Global information technology firm Unisys predicts that the future growth of the airfreight industry and its ability to capitalise of the e-commerce market will be heavily impacted by the rise of the Internet of Things (IoT) and voice-enabled artificial intelligence (AI) smart devices and systems, warehouse drones and strategic alliances between airlines and distributors.
“As the air cargo industry undergoes growth and transformation, driven by rapidly increasing capacity supply on passenger flights, and the shift to business-to-consumer small parcel shipments as a result of e-commerce, cargo operators will be forced to embrace such innovation to be more efficient, nimble and proactive in an increasingly competitive and price conscious market,” the company said in a statement.
Venkatesh Pazhyanur, Senior Industry Director of Freight Solutions at Unisys, noted that the freight industry as a whole must make an effort to keep up with evolving technologies.
“The cargo industry needs to embrace disruptive technologies from the consumer world, including Internet of Things, digital assistants and drones, to increase efficiency and meet customer expectation for greater transparency throughout the supply chain,” said Pazhyanur.
The company added that the Asia-Pacific air cargo industry is experiencing growth and transformation driven by rapidly increasing capacity supply on passenger flights, and the shift to business-to-consumer small parcel shipments as a result of e-commerce. This growing passenger demand will increase the number of passenger flights and add to cargo capacity supply, it added.
According to the International Air Transport Association (IATA), the number of people travelling by air globally will almost double between 2016 and 2035, with the greatest growth in Asia Pacific. At the same time, the rising popularity of e-commerce is changing the nature of cargo shipments, incrementally increasing the number of small parcels – predicted by management consultancy McKinsey & Company to grow five per cent annually in mature markets and 17 per cent annually in China.
“At Unisys we predict these market pressures will bring innovation in three areas in the cargo supply chain: smart warehouses will become even smarter, drones will finally take off in the cargo supply chain – but inside the warehouse, and new alliances between airlines and global distributors will enable longer term capacity management,” added Pazhyanur. “Much of the underlying technologies are already being used in other sectors – including the consumer world. But now, more than ever, cargo operators will be forced to embrace such innovation to be more efficient, nimble and proactive in an increasingly competitive and price conscious market.”
DB Schenker Australia has revealed details about its new logistics facility in Hoxton, New South Wales – 42km west of Sydney. The company notes that the internal site covers an area the size of almost eight football fields, making it one of the largest multi-client contract logistics facilities in the Southern Hemisphere.
The addition of the Hoxton site, with its 50,000m2 internal area and 15,000m2 external under-cover area, will bring DB Schenker Australia’s nationwide coverage to 330,000m2 over 25 sites when it becomes operational later this year.
Hoxton Park will be a multi-client facility for consumer electronics, FMCG (fast-moving consumer goods) and fashion/retail customers. It is located close to major highways, including the M7, M4 and M5, and has access to the Sydney metro and national network.
“Hoxton Park is the newest and largest contract logistics facility for DB Schenker in Australia,” said Ron Koehler, CEO Australia and New Zealand. “Our staff will provide for our customers first-class logistics services in this well-positioned facility right on the Sydney freeway network.”
He added that the company will also utilise the facility as a hub for domestic transport network, and to move full container load movements cost effectively to Hoxton Park for distribution to Sydney customers.
The facility will incorporate Automated Transport Sortation Systems (ATSS) that will allow for the consolidation of freight from several customers into the Schenker domestic transport business. In addition, value added services will be provided on site, including an Advanced Technical Centre providing configuration and testing for IT devices.
“DB Schenker Australia is consolidating existing business into Hoxton Park as well as adding new substantial business,” said Michael Harich, Director – Contract Logistics/Supply Chain Management AU/NZ, DB Schenker Australia. “Hoxton Park is a key part of our 2020 strategy to grow to 500,000m2 in Australia and at the same time combine existing smaller sites into larger facilities to generate synergies.”
Key features of the TAPA-certified facility include high clearance warehousing and access for high performance vehicles (two 40′ containers or four 20′ containers on one truck), full drive-around access and a weighbridge to support Chain of Responsibility (CoR) commitments.
Australia’s industrial and logistics occupiers are generally optimistic about the future and expect their businesses to be better off financially in the next 12 months, an inaugural survey carried out by commercial real estate services and investment firm CBRE found.
The Australian Industrial and Logistics Occupier Survey was undertaken to gain a better understanding of decision-making drivers, occupier strategies and how changes in technology and automation are impacting real-estate requirements.
Kate Bailey, Senior Research Manager, CBRE, said the results reflected an engaged and optimistic industrial and logistics market, with 66 per cent of respondents expecting their business to be better off financially and 25 per cent expecting things to stay the same over the next 12 months.
The retailing, warehousing and distribution sector were the most positive, with 86 per cent of respondents expecting their business to be better off.
“Surveys of this kind have rarely been undertaken in the Australian industrial and logistics market, meaning there has been limited benchmarking of what drives occupiers’ decision making,” said Bailey.
Manufacturers were found to be the most likely to want a smaller occupancy, with 21 per cent preferring a smaller footprint. This was possibly reflective of the shift towards high-tech manufacturing, which was less floorspace intensive, Bailey said.
CBRE Senior Managing Director, Industrial & Logistics, Matt Haddon, said the survey also highlighted key trends and attitudes in relation to sustainability, e-commerce, new development practices such as multi-storey warehousing, and the drivers behind occupiers’ site selection criteria.
“It is likely that the drive to incorporate sustainable design elements in industrial and logistics assets will continue to be led by the owner-occupier sector, with this group most likely to amortise initial expenses such as solar panels and wind turbines and see the flow on benefits from sustainable demand first hand,” said Haddon.
When it came to e-commerce, one of the more surprising findings was that the impact was yet to be fully realised in the sector, with 42 per cent of respondents indicating that they had seen no change from the growth of e-commerce in the past five years.
In relation to multi-storey warehousing, the survey found that while there was a high level of awareness from respondents (90 per cent) only 25 per cent of respondents would consider this style of asset.
The level of appeal was higher amongst retail/warehousing and wholesaling occupiers (50 per cent appeal, 50 per cent consideration) and lower amongst manufacturers (20 per cent appeal, 17 per cent consideration) – possibly due to the high cost of specialised machinery and equipment.
Turning to site selection, the survey found that access to road networks, key transport infrastructure and skilled employees had the highest level of perceived importance when selecting an industrial or logistics property.
GAC Australia has opened a new consolidation warehouse in Perth, marking its first foray into the logistics business, in parallel to its shipping services available at all Australian ports since 2007.
The opening of the new warehouse comes in response to growing demand for storage space and distribution services from a major client with operations in Western Australia. The facility is located in the new Swan Brewery Estate at Canning Vale, about 20km away from Perth International Airport and Fremantle Port, with easy access to transportation links through the major road network.
The 800m² facility features a 5m x 5m warehouse door and an 8.5m truss height, allowing trailing equipment to reverse into the facility for loading and unloading. Arriving goods are consolidated and packed into pallets before being distributed to domestic and international locations.
“Australia has significant quantities of discovered gas resources,” said Scott Henderson, GAC Australia’s Managing Director. “In Western Australia alone, resource projects and infrastructure in the pipeline amount to billions of dollars. It is home to many local and international companies servicing the oil and gas, as well as mining equipment, technology and services (METS) sectors, presenting plenty of opportunities for project logistics and warehousing services providers.
“Having established a strong foothold in the country’s shipping sector, we are now ready to expand our portfolio to provide logistics services, and Western Australia is an ideal launch pad for our logistics operations. The ability to provide integrated shipping and logistics services will allow us to serve our customers better.”
E-commerce is forcing supply chains to get smart to cope with rising demand, logistics industry veteran Ingilby Dickson told Logistics & Materials Handling.
“Online offers can’t work without slick and smart supply chains,” he said. “As such, planning has stepped up to be critical in delivering customer-driven outcomes.”
He added that cost-to-serve understanding and technology – whereby business costs are used to calculate the cost of servicing a customer – are not just enablers, but core engine room–driven processes.
“These are in strong demand for the new omnichannel and/or direct online offers, to make commercial sense and create strong customer loyalty,” he said.
Dickson’s industry expertise has been gained over a career working for various major corporations including BlueScope Steel, Goodman Fielder and TNT. He now stands on the Boards of various large organisations in Australia.
He tells Logistics & Materials Handling that his first exposure to logistics processes happened far from a warehouse. “It all started in the military, with a focus on planning-driven processes to get equipment, food and weapons to the front line” he said. “It was far more than transport, it was true end-to-end accountability.”
Over his career, Dickson has seen the term ‘logistics’ expand to encompass supply chain functions such as inventory, cost, service, and also the horizontal accountability across organisations between sales, and manufacturing and distribution. “It’s now a focus on constraint-based optimisation for the net benefit of the whole organisation,” he said. “The result is that ‘supply chain and logistics’ is now recognised as an important and necessary function in all modern business practices.”
As the logistics task has become more sophisticated, so too have the skills required to lead the business function, said Dickson. “The required leadership qualities have changed considerably,” he added. “Senior supply chain managers now need skills to coordinate and plan across a business and be able to manage internal conflict to ensure customers and shareholders win.
“As such, smart and astute leaders with strong commercial skills are needed – leaders of supply chains need to have courage to challenge across a business and lead the best whole-of-business outcomes.”
Dickson is passionate about sharing his expertise at industry knowledge sharing sessions, such as the Supply Chain Leader Insights events, held this year in Melbourne (17 October) and Sydney (19 October).
“Events like Supply Chain Leader Insights are crucial as we need our leaders to share and help others in traditionally thinking organisations see the light in order to drive supply-chain improvements,” he said.
Find out more about the Supply Chain Leader Insights events, book tickets ($57 using the promo code ‘LMH’) and see videos from last year’s event at the Supply Chain Logistics Insight website.
The industrial leasing market in Melbourne’s north has seen strong tenant demand continue to absorb supply of prime-grade stock, according to real estate group Colliers International, particularly in the food and beverage, logistics and specialised manufacturing industries.
“As leasing space and supply continues to tighten across the northern suburbs, we are also starting to experience a reduction in let-up time and incentives, with one of the key drivers being a shrinking serviced land allotment pipeline,” said Colliers International’s Marco Sandrin.
“With respect to current leasing vacancy for more than 10,000m2, we are currently experiencing the tightest market there has been for many years, with only eight buildings available, totalling just more than 100,000m2.”
Sandrin said two of the most significant transactions that had occurred this year were within the Melbourne Airport precinct.
“Growthpoint has leased 120 Link Road, a 26,517m2 facility to Wesfarmers’ Workwear Group, and 45-55 South Centre Road, a 14,082m2 facility to Direct Couriers, both on 10-year leases,” he said.
In Melbourne’s western suburbs, 50 per cent of leasing deals for more than 3,000m2 have taken place in the inner west, with the main catalyst being easy access to the CBD, Colliers International’s Stephen Ryan explained.
“We are also seeing a high demand for low site coverage cross-dock facilities that is resulting in higher square-metre rates across the buildings, along with quicker let-up times,” he said.
“With shrinking land supply and recent leasing take-up, we are expecting let-up times to continue to reduce and the incentives to compress.”
Ryan profiled a deal negotiated for delivery service BagTrans as an example. The company has signed a lease for 8,333m2 at GM Property Group’s business park at 600 Geelong Road, Brooklyn, from the start of October, following less than three months’ vacancy.
Colliers International recently released a custom publication showcasing large industrial facilities suited to transport and logistics, warehousing or distribution users across Melbourne, Big Sheds Victoria 2017.
Logistics and supply chain company Linfox has appointed Terry Quinnell President – Retail.
A retail supply chain professional with 40 years’ experience in the logistics industry, Quinnell began his career as a Linfox driver in 1978, where he was quickly appointed Linfox Supervisor for Coca-Cola in Victoria.
In 1993, Quinnell left Linfox to join DTM Business Logistics, where he held several senior leadership positions including State Manager and CEO.
He returned to Linfox as General Manager in 2004, managed some of Linfox’s largest customers as Vice President – Retail, and spent nine years as General Manager – Woolworths. Quinnell recently led the development and implementation of Linfox’s new subcontractor management system, FOXLink.
As President – Retail, Quinnell will be responsible for managing warehousing and distribution for leading retailers in Australia.
“Terry is an accomplished leader with a proven track record in people management and customer relationships,” said CEO Linfox Australia and New Zealand, Annette Carey.
Rumours that ecommerce company Amazon has chosen to house its first Australian distribution centre (DC) in Dandenong, Victoria, have been officially confirmed today, as reported by various news sites including Gizmodo.
The 24,000m2 Dandenong South facility is housed in the Pellicano M2 Industry Park, Amazon said in a statement this morning, offering easy access to several major transport links including the South Gippsland Highway, the Monash Highway and Eastlink. The Queensand Times reported that an executive from Amazon’s German operations – Rocco Braeuniger – will take on the role of Country Manager for Amazon’s Australia website in the coming months.
“We are thrilled to be creating hundreds of new roles in Dandenong South,” said Robert Bruce, Director of Operations – Australia, Amazon.
“This is just the start. Over time, we will bring thousands of new jobs to Australia and millions of dollars of investment as well as opening up the opportunity for thousands of Australian businesses to sell at home and abroad through Amazon Marketplace.”
Family supplies brand Clorox has chosen to outsource distribution of its products around Australia to DHL Supply Chain.
According to a statement, the partnership reflects Clorox’s focus on customer service, innovation and consistency.
Clorox’s decided to outsource its warehousing operation to achieve a more standardised and customer-centric approach, allowing the company to meet customer demands while removing the stress of distribution.
“We were looking for a partner who understands its customers’ business and responds quickly,” said Mike Fraser, Regional Logistics Manager, Clorox. “DHL Supply Chain has enabled us to maintain high levels of speed, reliability and quality control in our logistics processes, allowing us to stay competitive in the industry and help transform our end-to-end logistics operations.
“Our goal is that when a customer reaches for a product at the supermarket, it’s there. With DHL Supply Chain, we are confident that all of our products will be delivered on time and in full. We continue to look to them as a logistics partner of choice for future growth.”
DHL Supply Chain implemented a range of warehouse and supply chain improvements to Clorox’s operations across Australia, including warehousing, value-added services and inventory reduction, helping Clorox improve productivity by developing a more flexible operating model.
“The implementation of the 3PL (third-party logistics) service provided to Clorox has been achieved in just over three months, a process that would traditionally take six,” said Saul Resnick, CEO, DHL Supply Chain Australia and New Zealand.
“For fast moving consumer goods (FMCG) businesses, the logistics process is critical as consumer purchasing decisions are largely based on availability. We ensure all stock is delivered to stores when promised and with as little manual intervention as possible,” he concluded.
Nissan Motor Co. Australia and Mitsubishi Motors Australia have announced that they will establish a shared parts and accessories operation in Truganina, Victoria.
The announcement follows Nissan’s recently established global alliance with Mitsubishi Motors, which was formalised in October last year.
The new Australia-based initiative will see both automotive companies share warehousing space and logistics support for the national distribution of each brand’s parts and accessories from an all-new Truganina warehouse facility.
“This is a milestone development in Nissan’s new alliance with Mitsubishi,” said Richard Emery, Managing Director and CEO, Nissan Australia. “This collaboration has opened the door to many important synergies, including the sharing of parts storage, distribution and logistics here in Australia. This is an important investment with many benefits for our respective customers and dealers.”
Mutsuhiro Oshikiri, CEO, Mitsubishi Motors Australia, said this is one of the first alliance-based projects globally. “We are pleased it will assist us to achieve greater efficiency through cooperation with our local alliance partner, Nissan Australia, to deliver a better service to our respective customers,” said Oshikiri.
The new 36,000m2 National Parts Distribution Centre will be one of Australia’s largest automotive logistics facilities and is targeted for build completion by December 2017.
The Truganina facility will become the new master warehouse for Nissan and Mitsubishi’s national distribution network and will also service the Renault and Infiniti brands, both of which fall under the global Renault-Nissan Alliance.
This new warehouse has been designed to meet the requirements for a six-star Green Star rating, the Green Building Council’s highest level of certification for sustainable building design and among Australia’s first six-star energy rated parts distribution centres.