eStore Logistics: auto as standard

One of the country’s biggest third-party logistics providers, eStore Logistics is upping the ante by offering a three-hour delivery service as it expands its presence in Melbourne

 

Established a decade ago by founder and managing director Leigh Williams, eStore Logistics is changing its game by investing in a robotics automation solution that will help support faster deliveries.

The fulfilment company is ramping up its distribution network by signing up for two major concurrent industrial properties in Melbourne, totalling 35,000 square metres.

The largest site of the two, a 26,000 square metre purpose-built facility at 8 Felstead Drive in Truganina, a suburb in west Melbourne, was opened in August. The other, which will be the company’s head office in Melbourne, is due to be launched mid next year.

Williams, who was 26 years old when he founded his warehousing and order-fulfilment business, says the exploding growth of ecommerce in the country has seen his company grow by up to 40 per cent each year.

He’s spent the last year and a half planning for these two properties after gaining a couple of dozen new customers during the same period.

“It’s purely due to the uptake of ecommerce in Australia; if you look at the Australia Post reports, they talk about ecommerce growing at 20 per cent per annum,” Williams says.

“When we look at our client base, many of them were growing double that or triple per year because these are businesses which are not necessarily mature, so they’re going through quite a strong phase.

“Ecommerce is just going to continue growing; Australian consumers like the convenience of shopping online and they also like the ability to be able to go into Google and search and price match quickly and make a quick informed decision – it’s a lot easier than having to go into lots of retail stores and check prices or ring around before working out what to purchase and from where.”

NEW TECHNOLOGY

Although he’s not prepared to reveal the make of the new solution that will be found within the two facilities, Williams (pictured below) says it will “deliver a lot of benefit to customers and online retailers”.

“Across all of our DCs, we’re currently improving our systems and processes each week, month and year to deliver small efficiency changes and to deliver improvements and service levels to our customers. In doing that we’ve been able to scale our business and create a profitable and successful business,” he explains.

“The implementation of robotics is the next logical step for our business, especially considering the changing landscaping in ecommerce.

“For example, consumers are demanding faster delivery today than what they were three to four years ago.

“They’re demanding three-hour delivery, so the technology we have chosen for robotics is quite new to Australia and highly fit-for-purpose for ecommerce and omni-channel fulfilment operations and has the ability to service a very high percentage of product range we typically handle.

“We’ll be rolling this out starting in Melbourne and will progressively be rolling it out in other states in Australia over the next couple of years.”

The system will allow for last-minute deliveries, he adds.

“This will enable us to support much later cut-offs for the same-day fulfilments, such as 5pm, which means essentially you can go online at 3pm and order something and it will be on the trucks delivered later that day.

“In our current environment, it’s a bit more costly to fulfil a rushed order and to put that as the highest priority in the queue but with this technology we’re implementing we can put any sales order within the system with any priority and it doesn’t change the cost or the efficiency the fulfilment of that order.”

The solution is costing him several million dollars.

Although the uptake of three-hour deliveries has been slow to date within Australia, Williams believes he’s stealing a march on competitors.

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How the lid was lifted on eStore’s expansion, here

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“We’d like to be a leader with this moving forward,” he says.

“It started being talked about a couple of years ago but the uptake has been slow and the reason for that is that there’s typically a high cost to support that type of fulfilment.

“We want to get ahead of the curve and implement something which enables us to deliver that to customers in a cost effective manner.”

He’s been in talks with many freight carriers who have welcomed the idea.

“There’s many different carriers which are available who are performing last mile, we’ve had many discussions with different carriers to support this and we’re confident that the solution we’re going to move forward with will be able to support what we’re trying to achieve.”

There will be new jobs created within eStore’s IT department, including other supervisor and manager roles.

FURTHER EXPECTATIONS

Williams is certain that customers will demand even quicker delivery options in the foreseeable future.

“Five years ago, it was okay for an online retailer to take three days to fulfil and order and from there it got to next day and from there it got to same day fulfilment,” he says.

“Now we’re getting to three hours, so what it’s going to take for a leader like eStore to be able to provide same day fulfilment within three hours for the next set of demands that come from consumers who are used to three hours and they want to turn the needle on that even further? I think it’s highly possible that service demands and customers will increase even further beyond three hours.”

PRIME REAL ESTATE

eStore has partnered with property and supply chain TM Insight in designing and sourcing the two new sites that are strategically located at premium industrial estate in Melbourne’s west where Secon Freight Logistics, Dunlop Flooring and Coles can be found.

The Felstead Drive site will feature purpose-designed column grids to maximise storage capacity, drive-around access, a large super-canopy, a number of environmentally sustainable design (ESD) initiatives and eStore’s new national head office.

Dexus Property has appointed construction firm Qanstruct to deliver the distribution centre and head office for eStore Logistics.

TM Insight property director Nathan Bingham, who has worked with eStore since 2012, says eStore has secured over 100,000 square metres of space around Australia since their partnership commenced.

“This speaks to the growth of ecommerce in Australia but also eStore’s leading service in online fulfilment,” Bingham says.

eStore has also committed to a five-year lease for a 8,383 square metre development with Goodman within its West Industry Park estate in Truganina.

“Both these facilities in the booming logistics landscape of Melbourne’s western suburbs will help eStore expand their operations,” Bingham adds.

“The high-quality speculative development was an ideal solution for eStore’s immediate space requirements and the purpose-built facility will ensure eStore can accommodate their future growth and evolving strategy as ecommerce continues to boom in Australia.”

LINFOX DEAL

Williams had no comment to make to recent media reports about Linfox wanting a stake in his company.

It’s been reported that Linfox and eStore Logistics have held talks and the two sides are trying to come to agreement on a deal that could see Linfox emerge as the company’s majority shareholder.