DHL Supply Chain looks to flatten the curve in Memphis for peak season



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DHL Supply Chain is grappling with two concerns as it heads into peak season, both coming while the company is hiring 2,500 in the Memphis area.

The first is finding enough new hires who will stay on through the holidays and feel comfortable doing so amid the COVID-19 pandemic. The president of retail for DHL Supply Chain North America, Rick MacDonald, said that can be controlled to an extent.

The second is out of the company’s control. It’s whether FedEx and other transportation giants will have enough room to deliver the goods moving out of DHL Supply Chain’s 12 Memphis-area facilities, which already employ around 2,500.

“(Customers) are getting sobering news from those final-mile providers,” MacDonald said. “That sobering news is they’re going to not be able to handle what’s projected, so we’ve got to find a new way to approach it.”

DHL Supply Chain’s plan for this capacity crunch is to “flatten the curve.” The curve, unrelated to the COVID-19 curve, is the anticipated burst of package volume when people order goods for the holidays. DHL Supply Chain wants to flatten this surge by spreading out demand over a longer period, easing the burden within its warehouses.

This approach isn’t exclusive to DHL Supply Chain. The retailers it services are looking for ways to flatten the curve themselves, preventing a bottleneck of orders, MacDonald said. And Memphis-based FedEx, ahead of what should be a record-setting peak season, is discussing with its largest e-commerce customers ways to ease demand spikes in its network.

“Getting the package ready and on the back dock is only half the battle,” MacDonald said. “We need them to have the capacity to service the final mile because that’s what’s important to our customers, and we are only in control until it gets out of our building.”

E-commerce boom leads to busy warehouses

DHL Supply Chain, part of global logistics giant Deutsche Post DHL Group, provides transportation, warehousing and supply chain management services for the companies it contracts with. About half its revenue comes from the retail and consumer sectors, which have leaned on online orders amid the pandemic.

MacDonald declined to disclose DHL Supply Chain’s Memphis-area customers, but the overall e-commerce market is thriving. U.S. online shopping orders are up 52.77% for e-commerce companies and 41.77% for traditional retailers for the week ending Oct. 2, according to data from marketing company Emarsys.

More: DHL plans for $85.7 million Memphis campus, could create 255 jobs, service YETI Coolers

A spike in e-commerce activity means DHL Supply Chain’s warehouses are handling more units per hour, dealing with smaller individual orders to homes instead of larger, bulk orders to stores. MacDonald believes this “bricks to clicks” transition will persist even once the pandemic subsides.

“We had to build a larger ‘steady state’ staff to handle that,” he said. “… We’ve made that shift to where the work is. It’s much more on the consumer side.”

Labor market returns as DHL looks for more hires

Business for DHL Supply Chain’s Memphis-area facilities has been “strong the last four or five months,” MacDonald said, but hiring has been a different story until recently. The jobless rate in metropolitan Memphis dropped to 11.8% in August, as area employers continue to hire after mass layoffs in March.

“The labor market went the other way a bit,” he said. “Even though it’s coming back, we did struggle to hire for a period of months anywhere to the need.”

Peak season brings in a new surge of employees for DHL Supply Chain, which looks to hire these people between Oct. 1 and Dec. 31. The company has had to build up a large workforce just to handle short, intense stretches of volume like Black Friday through Cyber Monday.

“The rest of (peak season) was strong, but we have had to build a staff way beyond even steady holiday volume just to handle those five to six days,” MacDonald said.

This year, DHL Supply Chain expects to hire closer to 2,500 people and have 1,500 to 2,000 stay with the company all the way through peak, he said. The jobs revolve around warehousing operations — picking and packing orders, moving freight and placing orders on trucks for outbound delivery. Material handler positions pay up to $18.85 an hour.

Via “flattening the curve,” DHL Supply Chain aims to do more with fewer workers over a longer stretch of time. But even with those plans, the company anticipates handling about three times its typical volume this year from November through December, with that bumping up to five or six times more for a busier two-week stretch, MacDonald said.

More than half of DHL Supply Chain’s seasonal hires who work well will have a full-time job offer by the time peak ends, he said, with additional full-time offers coming not long after that.

“Come to work when scheduled. Do your best at work,” he said. “If you do that much, we’ll teach you everything else.”

MacDonald said DHL Supply Chain has had “very few COVID-19 cases with employees, never mind where we were able to trace back to the workplace,” but added he did not have Memphis-area COVID-19 case numbers available. DHL Supply Chain has redesigned working areas and breakrooms, along with tweaking shifts and break times to make sure workers can social distance.

“There are those who think it’s less serious,” he said. “Regardless of individual opinions, we established what we believe are the right rules.”

Max Garland covers FedEx, logistics and health care for The Commercial Appeal. Reach him at [email protected] or 901-529-2651 and on Twitter @MaxGarlandTypes.

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