North American peak inventory levels balanced, DHL unit CEO says

North American manufacturers and retailers hold sufficient in-stock inventory heading into the peak-season cycle, the CEO of North America for contract logistics giant DHL Supply Chain said Wednesday.

In a phone interview, Scott Sureddin said his customers have the “right amount of inventory” to manage peak volumes without facing the risk of stockouts or overordering. Sureddin added that the market for warehouse space in the U.S. and Canada remains “tight.” Rent increases, which have been a fact of life for warehouse users for years, have abated somewhat, he added.

Sureddin said the DHL unit expects this year’s peak activity to be similar to last year’s. DHL Supply Chain’s customers, which cover many big brands across multiple industries, are forecasting higher revenues on flat year-over-year volumes. That is a function of higher inflation leading to increases in selling prices, as well as changes in product mix, he said.

“In all, we’re looking at a balanced inventory picture” heading into peak, Sureddin said.

Based in Westerville, Ohio, DHL Supply Chain operates 529 sites covering 161 million square feet. The company also builds 5 million to 7 million square feet per year through an in-house real estate operation. E-commerce accounts for between 20% and 25% of its volumes, Sureddin said.

DHL Supply Chain expects to add about 8,000 seasonal workers to accompany 52,000 year-round employees. It also expects to bring on 700 collaborative robots — known as cobots — to join the 1,500 robots used year-round. The robots typically work along with humans in the warehouse.

Unlike the past three peak seasons when warehouse labor availability was tight, labor markets have stabilized heading into the 2023-24 cycle, Sureddin said. The company’s application flow is up 40%, and it is receiving more applicants for jobs than it has in recent years. “The labor market has stabilized,” he said.

Workers can expect base salaries that are comparable to wages that prevailed at the beginning of 2023 when the DHL unit raised wages, Sureddin said. Workers will also be eligible for seasonal incentives as they have in past peaks.

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