17 minute read
News
from MHD May 2020
Online retailer reports 300 per cent increase on household goods sales
Online retailer Catch.com.au has reported sales of household goods on the site soared by 290 per cent in the first two weeks of March.
Last month, Roy Morgan reported that online grocery sales increased by over 45 per cent, putting logistical pressure on retailers’ delivery networks.
Data indicates that consumers are continuing to stockpile grocery and medical items, and supermarket continue to face distribution pressure to meet demand and fill shelves with essential products.
Catch.com.au has reported a major uplift in site activity in recent weeks as consumers gravitate online, with traffic to its grocery pages up 467 per cent YoY.
As online retailers experience a surge in sales, Catch.com.au has ramped up supply chain operations and the focus is on maintaining stock and a reliable delivery service throughout this period of unprecedented demand.
Household, pantry, health and baby products have been the most popular items in demand from online consumers.
Sales of household goods on the site soared by 290 per cent compared to the same period last year, pantry goods, such as pasta, noodles and rice, rose 234 per cent, while health and beauty lifted 233 per cent.
Wesfarmers acquired Catch.com. au in a $230 million deal last year and now operates as an independent business unit under the Kmart group.
Nati Harpaz, Managing Director, Catch.com.au said the online retailer has put limits on certain high-demand products such as wipes and soaps like other major retailers including Coles and Woolworths.
“Our number one priority during these uncertain times is our customers and making sure they have access to the products they need, when they need it. We will continue to bring our customers a convenient shopping experience from the comfort of their home across a huge range of products,” she said.
“By working with our partners to source extra stock and by imposing a limit on certain items, we aim to help those in need of products such as kitchen and pantry essentials.
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Demand for large distribution and warehouse facilities is expected to continue its strong run due to pressure on national supply chains.
Luke Crawford, Colliers International Associate Director said last-mile locations for food companies, logistics companies and warehousing has shown how important distribution and warehouse facilities are in times of “social distancing” and keeping the supply chain open.
“The panic buying of consumer staples during uncertain times like these has put food manufacturers and suppliers in the position of making sure their network of distribution and warehousing facilities are adequate to handle these types of demand spikes on a regional basis,” he said.
The latest Colliers International radar paper ‘COVID-19 Industrial Implications’ found that due to the recent growth in demand for transport and logistics, its industrial property will remain secure through the months ahead.
It is expected that some companies may need to expand their industrial footprint in metro areas to keep up with the increased demand.
In late March Coles announced it will open three ‘pop-up’ distribution centres in New South Wales, Victoria and Queensland to cater towards the rapid growth in food and grocery purchases.
Colliers paper notes that the e-commerce sector in particular, continues to expand structurally, and the coronavirus outbreak is expected to result in a pick-up in online retail sales and subsequent demand for industrial space.
“With stores adjusting their hours and political leaders asking the public to stay home, the value of e-commerce has increased
exponentially,” Crawford said.
Malcom Tyson, Industrial Director at Colliers International said notwithstanding the short-term impacts, fundamentals within the Australian industrial and logistics market remain favourable with several structural and cyclical changes playing into the hands of the sector.
“Bringing it back to basics, the key drivers of the industrial market in recent years have been population growth, infrastructure investment, growth in e-commerce and low cost of debt,” he said.
Malcom said that although population growth is expected to take a hit over the short term, as net overseas migration drops significantly off the back of travel restrictions and the closure of the Australian borders to non-citizens, the outlook for the other key drivers in the current environment remains unchanged.
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New $20m warehouse for a major temperature-controlled logistics operator
Amajor temperature-controlled logistics operator has announced a new $20 million cold storage warehouse in Victoria.
Fernhurst, whose clients include meat packers, food processors and supermarkets has committed to a 7,070-square-metre facility on a 16,185-square-metre site located at National Drive, Truganina.
Fernhurst partnered with Charter Hall, ESR and property and supply chain firm TM Insight in designing, sourcing and project managing the build of this new facility, which will be consolidating their operations from three sites in Truganina and Hoppers Crossing.
The new development will also house Fernhurst’s new 388-squaremetre head office space and the facility will feature freezer, chiller and blast freezing zones for various product types.
Graeme O’Brien, Fernhurst Managing Director said the new modern facility will create significant efficiencies throughout the company.
Nathan Bingham, TM Insight director of property said the consolidation of operations, the use of renewable energy and the elimination of dead running between sites will dramatically improve Fernhurst’s service capability.
These energy intensive operations will be offset with a significant 440-kilowatt solar installation that will span almost the entire roof of the facility, plus energy conserving refrigeration equipment from Europe.
Charter Hall’s Industrial and Logistics development pipeline now exceeds $2 billion
Andrew Simons head of development, industrial and logistics at Charter Hall said the demand for the company’s industrial and logistics estates reflects the benchmark set by the group in delivering high specification, modern logistics space in strategic locations.
Consumers are expecting more long-term loyalty from retailers
Anew Australian consumer and retailer research survey by Manhattan Associates found that more than 68 per cent of consumers said value for money was the biggest way for a retailer to gain their loyalty.
The survey of 2000 Australian consumers and 100 large-end retailers also revealed that 47 per cent of respondents said great products guaranteed their repeat business. 53 pe rcent of consumers surveyed by Manhattan Associates said that a consistent shopping experience across different shopping platforms with the same retailer was important.
According to global technology solutions provider Honeywell, most retailers now rely on technology to offer the best customer experiences, with 59 per cent of retailers believing that technology has enhanced their customer’s shopping experience.
Raghav Sibal, Managing Director for Manhattan Associates, ANZ, said that while it’s not a huge surprise that influences like value for money and product quality sit at the top of consumers’ list for attracting their ongoing business, the research had also found that retailers weren’t always connected with the factors influencing consumer loyalty.
“It’s important to listen to your customers and deliver on what they want,” Raghav said.
“Our research has shown that while retailers may perceive actions like having a strong social media presence are key to maintaining customer loyalty today – with 37 per cent indicating they offer an excellent social media presence to attract loyalty – what consumers actually want in many respects is more basic.”
He said retailers need to provide all arms of their business with access to relevant, timely business information to enable consistent end-to-end customer experiences that span physical and digital channels.
“Access to real-time data and predictive analytics will further bolster omnichannel capabilities and support seamless online and instore experiences,” Raghav said.
7-Eleven Australia transfers to e-commerce
Franchised convenience chain 7-Eleven Australia has launched a new contactless delivery service.
The new delivery service for household and food items is being tested in select Melbourne stores, mostly franchised outlets, to ensure the technology and logistics is performing.
The eCommerce service will use the online delivery platform Tipple, which the group acquired in 2018.
Angus McKay, 7-Eleven’s CEO said had tapped into one of its fellow brands, the on-demand alcohol delivery service Tipple.
“The 7-Eleven Group acquired a majority stake in Tipple in 2018, as part of our investment in on-demand ‘last-mile’ delivery and technological capability,” he said.
“By working with their network of delivery drivers, we’re able to provide consumers with more options to get the things they need while minimising how often they need to leave their house.”
Angus said the initiative is rolling out in Melbourne for most suburbs and the group will look at other states in the coming months.
“This new service is ideal for people who are unable to get out to get basic essentials or ready to eat foods and need delivery within a shorter time frame,” he said.
“In some suburbs there are within the hour delivery options, but for most suburbs, customers can order for next day delivery.”
The sales go through the store that fulfils the order, with the same profit
The e-commerce service will use the online delivery platform Tipple, which the group acquired in 2018.
share arrangement as an over the counter transaction. 7-Eleven has more than 700 stores trading, providing essential items for healthcare workers and other shoppers seeking fuel and grocery staples.
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Australia’s first Android Voice solution goes live
Aleading food service provider has gone live with Cohesio Group’s Android Voice Tech Solution, becoming the first-ever company to implement this technology in Australia.
Centre State Food Service (CSFS), owned and operated by leading Galipo Foods, is a leading South Australian wholesale food distributor. Founded in 1982, CSFS is the first-choice supplier for hundreds of businesses across country South Australia.
From March 2020, CSFS is operating Cohesio’s Android Voice Tech Solution at three of its warehouses in South Australia, becoming the first-ever Australian company to introduce Android Voice for its warehousing and logistics operations.
The solution has enabled the food provider to radically simplify workflows, increase workload and better meet spikes in demand, offering CSFS the added advantage of being able to scale up and down without an increase in assets such as hardware.
In addition to being the first in Australia to implement this solution, this is also the first-ever food service company in the Asia Pacific region to use an Android Voice solution in a temperature-controlled environment.
Cohesio Group’s Android Voice Tech Solution offers CSFS operators the power of hands-free, voice-led technology with the addition of migration capabilities to all Android devices.
CSFS engaged Cohesio in September 2019 to explore similar technology solutions that Cohesio had implemented for its parent company, Galipo Foods. After initial discussions the business decided to go with one of Cohesio’s new Android Voice offerings, powered by the Honeywell Voice Guided Work Solution (GWS), and the project went live in March 2020.
“After initial reviews of the existing workflows, along with an in-depth process analysis, we determined that while an existing dedicated voice solution like at Galipo would meet CSFS’s requirements, there was significant opportunity to deliver further benefits with our newly developed Android Voice Tech Solution,” Paul Phillips, Senior Business Consultant at Cohesio Group said.
The Android Voice Tech Solution is cost-effective, scalable and can be supported and managed remotely. Cohesio has implemented the solution for CSFS to pick larger customer orders, batch pick for small orders, catch-weight capture and confirmation and a new consolidation pick process.
“This consolidation workflow allows for frequently picked items to be isolated and picked separately, allowing the driver to complete a secondary pick on their route. This reduces double handling and speeds up the picking process. The solution is spread across three temperature-controlled zones, ambient, chilled and frozen, and is the first of its kind on Android Voice in the APAC region,” Rizan Mawzoon, Head of Transformation at Cohesio Group said.
“As the market leader in voice technology, I am excited Honeywell Voice can continue to support its partners and customers, by providing more dynamic and scalable alternatives to our existing enterprise voice solutions,” Anthony Beavis, Regional Leader – ANZ at Honeywell Voice said.
CSFS delivers a high standard of service to its customers throughout South Australia and as a result was looking at ways to improve the experience for its customers.
“By working with Cohesio at Galipo Food’s distribution centre we managed to double our picking rates with its voice and AMR solutions. After this experience, we wanted to explore similar opportunities for efficiency gains at CSFS with Cohesio. The technology provider understands our business and therefore can adapt and offer solutions that are flexible and nimble. We knew that they would be able to deliver significant efficiency and productivity gains and we are absolutely thrilled with the solutions we now have at both our Galipo and CSFS sites,” Nathan Narayanan, General Manager at Galipo Foods said.
The Cohesio Android Voice Tech
The Android Voice Tech Solution is cost-effective and scalable.
Solution has reduced lead times from order to delivery, while also increasing accuracy through its product imagery feature. The solution offers the picker the same image of the item that the customer sees when they order it, enabling the operator to identify products much faster and with increased accuracy.
“Our goal was to simplify and rapidly reduce the complex workflows and to increase workloads. We also wanted to empower our existing operators with an easy and flexible, but also scalable technology that could cater to our peak periods and additional operators when required. Cohesio managed to deliver all of our requirements in a very short implementation period and we’re extremely pleased with the initial application and final design,” Erik Skinner, Manager at CSFS said.
Based on the principles of voiceguided technology, Android Voice gives organisations the power to optimise and simplify operations including goods receiving, picking, replenishing and putaways. It also offers efficiencies when it comes to stocktake, inspection and maintenance and retail front-ofstore operations. Cohesio Group is also a certified Android Zero Touch partner on Google’s zero-touch partner program. This means that all their design and development methodologies are certified by Google and the API integration automates the Android integration allowing users to be more productive and give Cohesio the ability be more proactive with support.
Global retailer joins Toll Group at new logistics hub in Melbourne
Midwest Logistics Hub in Truganina in Melbourne’s West has a new tenant who has signed a 10-year term.
Global retailer Uniqlo has secured a 46,000sqm pre-lease to commence in early 2021.
On completion, Midwest Logistics Hub will be a prime logistics estate in Melbourne valued in excess of $500 million.
Development of Midwest Logistics Hub commenced in October 2019, with the first pre-lease to Toll Group for a temperature controlled 44,000sqm facility to service its fulfilment contract with Mars Wrigley Australia, acting as a distribution centre for storage and dispatch to customers.
The te chnologically advanced warehouse will store all of Mars Wrigley’s products under one roof for the first time in the company’s history, with the capacity to store up to 49,000 pallets or more than 700 million MARS® Bars and use Automated Guide Vehicles to move pallets around the warehouse.
Andrew Simons, Charter Hall’s Head of Development, Industrial & Logistics Wrigleysaid Uniqlo’s pre-lease reinforces the changing nature of retail supply chains with the commitment of Fastline Retailing (the owner of Uniqlo), a global leader in the retail industry, to establish their own facility to manage both their existing national store network and their expanding ecommerce business.
Andrew said the facility will consolidate their operations into one purpose-built facility featuring cross dock operations with a super awning, 14.6 metre warehouse clearance height and container rated hardstand. 50 per cent of the Midwest Logistics Hub estate is now committed.
Richard Mason, CPIF Fund Manager said this can be credited to the estate being in a prefer red location for national distribution centres due to its proximity to the port and customers and the area’s large investment in road infrastructure.
All civil and infrastructure works will be completed in June 2020 and the construction of the Toll facility is on track to complete in September 2020.
Each facility at Midwest is targeting a 4 -star Green Star Design and As-Built rating and will incorporate various sustainability initiatives including 100-300kw solar PV systems, LED warehouse lighting and rainwater harvesting.
Richard Stacker, Industrial & Logistics CEO, said modern logistics space in strategic locations across the Eastern Seaboard continues to attract quality tenant covenants for its real estate funds and their investors.
“Charter Hall’s Industrial & Logistics development pipeline now exceeds $2 billion, providing the scale and flexibility to satisfy the growth aspirations of our existing and prospective tenant customers, while also delivering high quality real estate and investment outperformance to our investors,” Richard said.
C.H. Robinson help distribute over 200,000 face masks
C.H. Robinson has helped move 225,000 masks from Shanghai to distribute across Australia to support essential workers during the COVID-19 pandemic.
Logistics have taken on a new meaning for all Australians who are concerned about shortages and running out of essentials.
Manufacturing, by and large is continuing, but getting products to the end user can be problematic.
Last month C.H. Robinson began delivery of essential items in a bid to unplug the distribution bottleneck and keep retail staff safe in the workplace.
A spokesperson for C.H. Robinson said the company pulled out all stops and successfully orchestrated the delivery of 225,000 disposable face masks to help protect a major retailer’s store and warehouse staff, ensuring they could continue their inspirational work keeping Australians fed.
“This was an incredible effort by the world’s largest third party logistics company, which meant that these vital goods were delivered to staff all across Australia by 31 March, a week ahead of schedule,” the spokesperson said.
C.H. Robinson has pulled out all the stops and delivered 225,000 disposable face masks to Australia.
Every Australia Post plastic satchel to be made from recycled materials
Australia Post has announced that 100 per cent of its entire range of plastic satchels will be made from recycled materials.
The initiative was announced at the National Plastics Summit in Canberra earlier this month and will be in effect by 2021.
Nicole Sheffield, Executive General Manager Community and Consumer said the commitment underlined Australia Post’s drive towards a sustainable future.
“Australia Post continues to incorporate sustainable design principles in the development of our packaging, as we reduce greenhouse gas emissions, non-renewable resource use and water consumption,” she said.
The announcement follows major retailer and Australia Post customer, Country Road, to launch its first recycled plastic satchel in December 2019.
Nicole said as online shopping grows, Australia Post is focused on reducing the quantity of non-recycled packaging that moves through the network.
The new satchel is made of recycled plastic, sending a clear signal to the market that major Australian brands are committed to eliminating the use of virgin plastic across its packaging supply chain.
Australia Post has been a signatory of the Australian Packaging Covenant Organisation (APCO) since 2005, joining other major businesses and Government to set the ambition to achieving national packaging targets.
Since the launch of its Environmental Action Plan in 2018, Australia Post has been incorporating sustainability principles in the design and production of its packaging, a commitment that is reiterated in its 2020-2022 Group Corporate Responsibility Plan
Last year Australia Post also teamed up with REDCycle to offer its customers access to more than 1,800 soft plastics recycling points at major supermarkets across Australia.
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