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How Aramex is reducing its shipment cost while serving e-retailers?

A leading delivery and logistics services company reduces OPEX by 50% and improves turnaround time by 40% with next-generation sortation technology.

Tags: Aramex, logistics, e-retail, ecomerce

BY Shipra Srivastava  |  Oct 05, 2017  |  comments ( 0 )  | 
How Aramex is reducing its shipment cost while serving e-retailers?

About Aramex

Aramex is an international express mail delivery and logistics services company headquartered in Dubai, United Arab Emirates (UAE). Established in 1982, the company rapidly evolved into a global brand recognized for its customized services and innovative multi-product offrings. Today, Aramex employs more than 13,900 people in over 354 locations across 60 countries, and has a strong alliance network providing worldwide presence. Aramex started operations India in 1997. Headquartered in Mumbai, Aramex has 12 distribution hubs and delivers to 8000 pin codes across India.

Industry Landscape

The global third-party logistics (3PL) market is expected to reach USD 925.31 billion by 2020, as per Grand View Research. The exponential growth in the e-commerce domain, proliferation of omni-channel ful‑lment and transitioning from pallet-picking to case-picking and piece-picking are some of the trends impacting the global 3PL industry. The industry faces multiple challenges due to poor infrastructure, expensive real estate, high attrition rates, uncertainty in demands and high cost of operations. To meet dynamic customer demands and reduce costs, logistics companies are shifting towards automation and technology in their operations.

The Opportunity

Rapid expansion in the e-commerce segment has been one of the largest drivers of growth for Aramex in India. In fact, logistics is one of the most critical factors for success of any e-commerce company in managing their business criticalities and retaining their customers. The solid growth presented several supply-chain distribution challenges to Aramex. Aramex would charge e-commerce players based on dead weight of sample shipments and would be charged by the carriers (air or road) on the basis of volumetric weight of every shipment. This was resulting in significant revenue leakage for Aramex. Further, Aramex was under tremendous pressure to meet stringent service-level agreements by various customers and deliver shipments in extremely tight schedules. Sorting thousands of packets of varying size and shape efficiently in a few hours and in the limited transit center spaces was extremely challenging for Aramex. Also, manual sortation till last-mile (pin-codes) was error-prone, with errors in the range of 3-5% cases daily. Managing the surge in demand during the festive season further added to the complexity of the problem for Aramex.

The Solution

Aramex selected GreyOrange as its partner to leverage next-generation warehousing technology solutions to resolve the multiple challenges it faced with order profiling, sorting and routing. To enable Aramex in optimizing their billing processes in order to improve the revenue recognition, GreyOrange installed a Pro‑ler solution comprising a Manual Scanner system, a Dimensioning and Weighing System (DWS) and a rejection arm with throughput of 1500 packets/hour at their Delhi hub. GreyOrange DWS is capable of accurately calculating both dead weight and volumetric weight of shipments, along with measuring the packet dimensions and calculating real volume and box volume, enabling Aramex to appropriately charge for the shipment from its customers without any revenue leakages. 

The Automated Scanner is additionally capable of capturing and archiving images of order shipments. This automated volumetric data collection and archived images of packets also helped Aramex reduce pilferage, as well as in auditing the charging policy of shipments based on both the images and volumetric weights of the shipments. As Aramex’s business grew in scale, it also faced challenges with the sortation process requiring sorting of really high volumes, single item orders of di­erent shapes and sizes, that needed to be shipped to numerous pin-codes across India.

 





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