Medical technology company Siemens Healthineers (OTCMKTS: SMMNY) has entered a 10-year service agreement with DHL Supply Chain to oversee its product distribution in North America.
The distribution operation will be housed at a DHL Supply Chain-owned facility in Memphis, Tennessee. Siemens Healthineers is expected to occupy about 260,000 square feet of the 422,000-square-foot facility. It will include 105 employees.
Neither company disclosed financial terms of the service agreement.
The facility is not yet operational. It will start coming online later this year and is expected to be fully established by mid-2021, a Siemens Healthineers spokesman told American Shipper.
DHL Supply Chain expects to receive the company’s first inbound shipments at the Memphis facility in late October.
Siemens Healthineers manufactures a range of diagnostic technologies, including CT, MRI, and PET imaging systems, as well as medical equipment for immunochemistry and urinalysis testing.
Prior to entering this agreement, Siemens Healthineers said it worked with another third-party logistics services provider in North America, which it declined to name. The company spokesman said DHL Supply Chain was selected due to its ability to meet sophisticated logistics requirements.
The Memphis distribution center will incorporate DHL’s warehousing and inventory management system, which includes artificial intelligence and robotic storage and retrieval capabilities.
Siemens Healthineers will stock the distribution center with equipment from various domestic and international manufacturing sites.
When products are shipped from the Memphis facility, DHL will use its MySupplyChain application and GPS to track them to their destination. DHL said this will provide Siemens Healthineers engineers with “additional transparency, visibility and control over their orders and returns.”
“The Americas is an important growth market for Siemens Healthineers, and the quality, flexibility and speed of the service logistics platform we have established in the region helps us better serve our customers,” David Pacitti, the company’s president and head of the Americas, said in a statement.
DHL Supply Chain is part of the German courier giant Deutsche Post DHL Group (OTCMKTS: DPSGY).
Earlier this month, the company said it will invest an additional $70 million on top of $150 million that it had already committed last year to expanding its U.S. distribution network for the health care industry.
DHL Supply Chain currently operates 30 specialized facilities with more than 11 million square feet of temperature-controlled and certified infrastructure across the U.S.
The company will also expand its use of LocusBots to pick products in these facilities. DHL Supply Chain earlier this year announced plans to increase its LocusBot fleet to a thousand by the end of 2020.
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Click for more FreightWaves/American Shipper articles by Chris Gillis.