3rd Tier (4)

Parcels delivery giant Hermes has completed the installation of a third sortation tier at its Rugby super hub, which at 270,000sq ft is claimed to be Europe's largest automated parcels sortation centre.

The £16m project enhances existing output by 40% with the capability to process 1.35 million parcels each day

With Hermes' volumes now at 383 million parcels a year (compared with the 340 million forecast) and still growing at 15% annually the company – part of the German Otto Group – is now looking to open a fourth UK hub in 2022.

The new tier can sort 22,973 items per hour which increases the hub’s hourly total to 68,919 items per hour using three highly automated Beumer belt sorters.

The new tier measures over 1.1kms in length, incorporates 480 tonnes of steelwork, features 1,942 trays, and is powered by 41kms of electrical wiring.

Scales measure the dimension and check the weight of every parcel whilst also checking for any damage.

“Online retail is growing at around 4% a year so we are out-stripping that and growing our market share,” said Hermes operations director - hubs and depots Jon Ormond. “Our next day volumes are up 30% as a result of our improved service offer. We can now provide an added value service without costing the earth. We are a trusted carrier giving everything that other major companies can but at a completely different cost.”

Hermes now offers consumers who cannot be at home for their delivery the choice of diverting the parcel to a safe place, a neighbour, a Parcelshop or a parcel locker. This latter option has yet to take off in the UK but is the preferred option for some user groups such as commuters and students.

The £31m Rugby centre opened in 2017 and can handle parcels of up to 1,200 x 800 x 600mm and up to 35kg, although Hermes restricts the weight to 15kg for the health and safety of its delivery couriers.

Larger or irregular shaped items which make up around 10% of volumes are sorted manually and loose loaded along with the other parcels in trailers for trunking to the regional depots.

Cut-off time for next day delivery anywhere in the UK is 1.30am at Rugby and 2am at Hermes' second hub in Warrington, which Ormond said were the latest deadlines in the industry. This allows parcels to be received up until midnight for next day delivery.

Returns growth

Rugby will also soon be able to handle 84,000 returned items a day, a growing part of its business since the launch of myHermes which allows consumers to send parcels to other consumers (C2C) or back to the retailer (C2B) via a network of Parcelshops which are usually located in local convenience stores. Returns are split into two streams – high volume items such as fashion that are handled by automated Interroll sorters and low volume items that require a manual sort or rework before being returned to the retailer.

“We have seen returns increase by 70% to 9m items each year,” said Ormond. “We are developing an API [application programming interface or software plug-in] for our clients so they know exactly what will be coming back to speed the process up.”

Hermes also has a relief hub at Nuneaton used to boost capacity at peak which now starts with Black Friday at the end of November and runs through to Christmas.

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Commenting on the completion of the third tier, CEO of Hermes UK, Martijn de Lange, said: “For the last few years we have witnessed double-digit growth due to our commitment to invest in our world-class network and infrastructure, our innovative fleet and our industry-leading portfolio of services solutions. In addition, our in-house engineering team is constantly optimising our equipment to ensure it is best in class and we will soon be introducing further automation to support our returns process in the coming months.

“Last year, we enjoyed our most effective and busiest peak season to date, whilst, at the same time, achieving record service levels and I’m absolutely confident the third sortation tier in Rugby will put us in the strongest possible position to further support the retail industry over the coming years.”

Fleet expansion

Hermes is also investing in more CNG-powered IVECO 4x2 tractor units and will run a trial with a converted DAF hydrogen tractor in 2021 as part of its drive to reduce carbon emissions. It started buying renewable bio-CNG from CNG Fuels two years ago and now has 30 gas-powered tractor units on the roads. It is now expanding the gas fleet to 72 vehicles, the largest in the UK, making up almost half its mainly DAF trunking fleet. The vehicles are refuelled at Hermes' Warrington hub and at third party stations in Leyland and Daventry.

Hermes operations director - hubs and depots, Jon Ormond, said the parcels firm had also tried CNG-powered rigids but with limited success.

Hermes has also gone 100% electric at its depot in Beckton, just to the east of London City Airport, using 32 battery electric Nissan eNV200 vans to deliver into central London. The Beckton site employs all its delivery couriers after Hermes insourced deliveries there from Gnewt and the vehicles are charged overnight at the depot.

The company will be trialling a new hydrogen van next year, which is initially likely to be from Renault or IVECO.

Ormond said that Hermes wanted to use a variety of alternative low carbon fuels to achieve its goal of halving CO2 emissions by 2020. “It is dangerous to rely on just one fuel,” he said. “The government has capped the duty on natural gas for now but we can't back one type of fuel.”

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