July 2003 | Case Studies | DC Solutions

Parcel Direct: Built for Speed

Tags: Warehousing

A network of high-tech distribution centers helps Parcel Direct pass deep postal discounts on to its customers, while speeding delivery to final destination.

Parcel Direct, a major ground-residential parcel expediter, helps its customers earn significant postal discounts and speeds delivery to the final destination. The backbone of its process is a network of high-tech distribution centers.

Over its five years in existence, Parcel Direct has experienced rapid growth. The company' s client base includes catalogers, e-retailers, and other direct marketers.

Parcel Direct picks up packages—which can range in weight from two pounds to 75 pounds—from its clients' fulfillment centers, sorts them at Parcel Direct facilities, and transports them deep into the United States Postal Service system. By moving packages to thousands of U.S. Postal Service Destination Delivery Units, Sectional Center Facilities, and Bulk Mail Centers, the company earns postal discounts that it passes on to customers.

Since launching operations in April 1998 from its distribution center and administrative complex in New Berlin, Wisc., the company has opened new DCs at a rate of nearly two per year, according to Don Terkel, Parcel Direct' s vice president of operations.

At its facilities in West Virginia, Wisconsin, Ohio, Massachusetts, New Jersey, Texas, North Carolina, and Florida, Parcel Direct uses a single technical infrastructure. Each facility features scanning and automated tilt-tray sortation technology from FKI Logistex Crisplant, plus proprietary systems developed by Quad/Graphics, Parcel Direct' s parent company.

A Case in Point

The company' s DC in Martinsburg, W. Va., which opened in May 1999, illustrates Parcel Direct' s use of technology. One of the chief goals at this facility, as at all DCs, is to achieve high volumes in order to earn extra cost savings from Parcel Direct' s transportation system and consolidation capabilities, which it could then pass on to customers. A combination of crossdocking techniques, radio-frequency communications, and high-speed sortation enables the facility to meet that goal.

The 380,000-square-foot facility sorts approximately 300,000 packages a day, shipping to 1,300 individual ZIP codes. Roughly 540 trailerloads of product arrive every day, peaking to hundreds during the holiday shopping season.

Associates unload trailerloads of client shipments one package at a time, using 14 extendible automated induction conveyors to minimize unloading processing while maximizing carton protection.

"An employee places a parcel label side up on an extendible conveyor, measuring the cube of the package through a volume scanner, and measuring weights through inline scales," explains Terkel, who was formerly operations manager of the Martinsburg facility.

Scanners read the bar code off each package and check it against the merchant' s manifest. Parcel Direct uses both omni and camera scanners. The package is logged into Parcel Direct' s computer for outbound load assignment, parcel tracking, and daily load reconciliation.

Chutes Direct the Flow

Packages are assigned to ZIP code destinations, then are carried by sorter trays to the appropriate chute. Each chute is reserved for a particular postal destination—for example, a five-digit ZIP code Destination Delivery Unit or a Bulk Mail Center.

"We have 520 chutes in the plant on the secondary sorter side," Terkel points out. Packages may be directed on the primary sorter to one of 30 direct outbound lanes, or diverted for consolidation into accumulation lanes that group products together by ZIP codes.

Parcel Direct has the ability to store approximately 70,000 packages above the secondary sorter until it' s time to release them.

"This enables us to close out a wave of packages, process the chutes, then reuse the chutes for a completely different set of ZIP codes," Terkel says.

Once released, packages can become part of a five-digit ZIP code pallet or bed-loaded onto a trailer, and may be consolidated with magazines and catalogs printed by Quad/Graphics.

Packages are touched by human hands at only two points in the distribution center: when they are unloaded at the DC, and again when they' re loaded for the outbound shipment. Once packages are loaded on the company' s trucks, Parcel Direct can use its global positioning satellite technology to pinpoint their location while they are enroute to the final customer.

The DC runs three shifts, operating 24 hours a day, and supplements its 80-person workforce with some part- time and temporary employees during peak season. The facility' s volume can double from September to December. During the holiday shopping season, the facility "has to run like clockwork," Terkel says.