FedEx's newest 'autostation' in TN aims to decrease lead time
- FedEx's Chattanooga, TN location can now run 12,000 parcels an hour through a "scanner channel," — machinery which photographs each package on all sides then saves the images on a server in case of potential issues — according to the Times Free Press.
- The Chattanooga building is roughly 237,000 square feet, and is one of the company's network expansions. FedEx has built or expanded 15 major hubs and 500 facilities since 2005, reducing lead times for FedEx Ground by at least one day to more than 70% of the country since 2003.
- The distribution center is pivotal to the logistics provider's operations, as it can service major ports in the U.S. Midwest and Southeast regions like Chicago or Savannah within a day's drive. FedEx customers Amazon and photography company Lifetouch also have major distribution centers in Chattanooga.
Maintaining a competitive edge in the logistics space is as much about the location of your distribution centers as the technology within them, and FedEx is investing heavily in both.
In 2017, FedEx added a major hub in Houston and 14 more automated stations (or an "autostation," as FedEx calls them), and has plans to add two more hubs in Illinois and Kentucky. Of the Chattanooga facility's capabilities, company spokesperson Allie Addoms says, "The technology and automation deployed in our new hubs and autostations enables us to adjust to the changing face of e-commerce and flex our network to accommodate package volumes."
"Our new hubs and automated stations are designed for high throughput sortation, minimized handlings, and more direct loading that will increase the speed, efficiency and reliability that e-commerce customers are increasingly demanding," Addoms told Supply Chain Dive. "This new facility in Chattanooga exhibits FedEx Ground’s commitment to technological innovation that drives our outstanding service.”
Indeed, technology has quickly become the backbone of modern-day customer service. The facility's image-processing ability should help FedEx check traditional fulfillment data, better track customer packages, and prepare for reverse logistics requests. Yet, being able to offer the consumer what they want is only half the battle; the other half requires attaining and retaining a loyal consumer base.
Fortunately, FedEx is not lagging on this front, either. As FedEx invests in new technology and labor, it is also changing its business strategy to meet consumer demands.
During the company's earnings call in July, FedEx CFO Alan Graf reported a $2.7 billion increase in revenue for FY 2017 compared to FY 2016, due to higher volume, an increase of heavy freight, and the acquisition of Europe-based TNT Express. To further its competitive edge, in August, the company announced that it would forego additional charges for holiday package deliveries, levying extra fees only for oversized packages ($25), unauthorized packages ($300), and those requiring additional handling ($3).
In fact, the company expects enough increased business that it recently held a job fair, seeking an additional 800 workers at its Memphis hub. At Chattanooga, the company expects to hire up to 50 more workers for peak season.
- Times Free Press New Chattanooga FedEx distribution center loaded with technology, officials say
- Supply Chain Dive FedEx attributes record annual results success to e-commerce
- Supply Chain Dive FedEx foregoes holiday surcharges in direct contrast with UPS
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