Kerry Logistics has taken the pioneering step of introducing six ‘logistics robots’ into its main warehouse to speed up e-commerce fulfilment operations, and is continuing its Asian and intercontinental expansion after strong-half year results.
The Hong Kong-based freight forwarding and express delivery group claimed to be one of the first 3PLs in Asia to adopt 'robotic butlers' in its operations to enhance fulfillment efficiency and accuracy.
Today, speed-to-market order fulfillment is the key to success in the retail industry. The process of picking products is at the heart of e-commerce operations where high volumes of small and irregular orders predominate, Kerry explained.
The six fully automated and programmed robotic butlers are operating at the group’s flagship facility PC3 in Hong Kong, in the order fulfillment centre where sales orders taken from retailers or e-commerce marketplaces are being processed.
Explaining how the robots work, Kerry said that real-time sales orders are transmitted to the robotic butlers via its proprietary warehouse management system. Designated shelves are then picked and delivered to the pick station. The system indicates the right items to be picked for shipments using a simple lighting system in which every item is tracked via barcodes.
Currently, the robotic butlers operate 24/7 and can pick 280 items per hour compared to 50 items in the normal course and the pick rate is four times faster. This solution is ideal for retail brands which sell a wide variety of consumer products with potentially expanding e-commerce business.
Earlier this year, Kerry presented the solution, which seamlessly incorporates robotic butlers, WMS, Pick-to-Light and Android-based EPOD to provide comprehensive order fulfillment for modern B2B2C and B2C businesses, at the 2015 HKTDC International ICT Expo.
Meanwhile, Kerry Logistics improved its core operating profit by 16% to HK$925 million and its core net profit by 11% to HK$542 million in the January – June half-year despite only a low 2% rise in turnover to HK$10,135 million. The Integrated Logistics business achieved a 15% increase in profit to HK$807 million and the International Freight Forwarding business recorded a 22% increase in profit to HK$191 million.
William Ma, Group Managing Director of Kerry Logistics, stated: “The global economy continued to be plagued with volatilities in the first half of 2015. In face of these challenges, Kerry Logistics focused on honing its core competence in delivering highly customised solutions tailored to industries with growth potential. The group has taken the opportunity during this weakened environment to integrate its businesses, improve operational efficiency and further expand into newly developed markets, resulting in strengthened profitability and sustained double-digit growth in our core earnings. The group was able to achieve steady growth in overall operating profits, while businesses in the Greater China region remained relatively stable driven by our strong performances in Hong Kong and Taiwan.”
The logistics network was expanded in the first half-year. In Thailand, Phase 1 of the Kerry Bangna Logistics Centre was completed and will serve as a new sorting centre for Kerry Express and a fulfillment centre for e-commerce customers. In Cambodia, the group held a groundbreaking ceremony in July 2015 for the construction of a 160,000 square feet bonded warehouse at a Free Trade and Special Economic Zone located in Khan Dangkor, Phnom Penh.
Kerry Logistics also further expanded its operating scale and strengthened its network coverage through a number of investments and acquisitions.
In Greater China, the group signed a strategic cooperation agreement with China Railway Import and Export Company (“China Railway”) in April to leverage its extensive railway network and experience in undertaking key domestic and international projects, and effectively integrate them with Kerry Logistics’ strong network in Southeast Asia and its logistics service expertise.
In March, Kerry Logistics expanded its business in Indonesia by investing in PT Puninar Saranaraya, one of Indonesia’s largest logistics companies. Additionally, the group took further steps to build an ASEAN-wide regional express platform to tap into the increasing trade and the growing e-commerce market in the region. Following the acquisition of a local express company in Cambodia in 2015, Kerry Logistics targets to complete the expansion into Laos and Malaysia in the second half of this year as well as into the Philippines, Indonesia, Myanmar and Singapore in the near future.
In the Middle East, Kerry Logistics strengthened its IFF capacity and network through acquiring a controlling stake in Able Logistics Group FZCO, an established international freight forwarder headquartered in Dubai with a leading position in the region, to offer global connections through a round-the-clock transit hub linking Asia to the Middle East, Europe and Africa.
The group also further expanded its global network into Canada following an acquisition of the majority stakes in Total Logistics Partner Ocean Consolidators Inc. and Total Logistics Partner Air Express Inc., two Canadian freight forwarding companies focusing on Asia-Canada trade. In the US, Kerry Logistics signed a memorandum of understanding with a major NVOCC, focusing on ocean freight from Asia to the US, to acquire a majority interest in the company. Specialising in trans-Pacific trade lanes, this unnamed company offers a full suite of services in the US.
George Yeo, Chairman of Kerry Logistics, said: “Despite challenges in the near term, the group maintains a positive outlook for the industry in the medium to long term. Driven by the ‘One Belt One Road’ policy, and the further development of the new Silk Road, China’s logistics industry will become more sophisticated, playing to Kerry Logistics’ strengths of providing highly customised solutions tailored to industries with growth potential. As local players in both ASEAN and Greater China, Kerry Logistics will also benefit directly from the growth of the two regions as they become increasingly tied with one another.
“Internationally, we have set our sights on delivering long-term sustainable growth, both organically and through selective mergers and acquisitions. The group will continue to work towards its strategic objective of strengthening trans-Pacific coverage, and expanding into niche markets in Europe, especially in the fashion business. Kerry Logistics will move deeper into the e-commerce by joining hands with strategic partners and strengthening its cross-border e-commerce logistics solutions across sectors. We expect this to become an important growth driver in the coming years.”
