Otto Group logistics center opened in Iłowa municipality

„Gigantic” – this word best captures the scale of the new distribution center in Iłowa. Located on the outskirts of a small town in western Poland, about an hour's drive from Cottbus in Germany, it has become a unique point on the e-commerce map.

This is a model investment for European online retail – this is how the new logistics center in Iłowa can be described. Its innovation is due, among other things, to a modern „pocket sorter”, which literally places orders into special pockets, forming the heart of the facility. „Thanks to this modern location, we will set new standards on a European scale – says Kay Schiebur, member of the Otto Group executive board responsible for services. The sheer size of the center in Iłowa is impressive: on an area of 260,000 m² – corresponding to the size of 37 football pitches – a complex of nine halls was built in less than two years, designed in accordance with the requirements of the German Sustainable Building Council (DGNB). The buildings, with a total area of approximately 118,000 m², have space equal to as many as 16 football pitches, and the usable area exceeds 268,000 m², because additional levels were added in the picking zone.

The Otto Group invested several hundred million euros in the distribution center to take logistics for the OTTO online store to a new level and further accelerate e-commerce deliveries.

The largest B2C center in Poland is operated by Hermes Fulfilment, a logistics company belonging to the Otto Group. Employing up to 1,900 workers, the company manages warehousing, packing of online orders, and their shipment to European countries. „The location in Iłowa is our company's first center planned and built entirely from scratch outside of Germany – says Kevin Kufs, CEO of Hermes Fulfilment. The center is designed primarily to handle small-volume orders, including, above all, clothing.

Although the exterior of the complex is impressive in its size, the interior delights with advanced technology and refined logistics processes. The goods receiving zone has 28 gates – the largest number among all Hermes Fulfilment locations. After quality control, new products go to a fully automated high-bay warehouse with 1.2 million pallet spaces spread across 26 aisles. Conveyor belts transport goods to the picking zone, where employees collect orders on an area of 127,000 m². Larger and heavier products are stored on pallets in a manual warehouse that can hold up to 33,000 pallets. Picking of larger, heavier, and frequently ordered products takes place separately, on an area of 40,000 m², which houses 14,000 pallets. Thanks to the arrangement on four levels, valuable floor space is saved.

The central element of the new distribution center is the aforementioned efficient „pocket sorter”, used by Hermes Fulfilment for the first time. The system connects the picking zone with the packing hall, and its design, resembling a roller coaster, runs above the heads of the employees, which saves floor space. Ordered products are transported in 50,200 pockets at a speed of half a meter per second, regardless of whether they are shoes in boxes or T-shirts in bags. The sorter is capable of transporting up to 18,000 items per hour, and returns are stored in a modern dynamic shuttle warehouse with 92,000 spaces.

The final stage of the process is the shipping zone. Packed parcels are sorted by destination and loaded onto trucks at 98 gates. Shipments go mainly to Germany, France, Austria, and the Netherlands, and the center is capable of processing up to 110 million shipments per year.

The order fulfillment process at the center in Iłowa takes less than four hours. „Thanks to a high degree of automation, we can significantly increase the speed of order fulfillment and improve the next-day delivery rate – emphasizes Kay Schiebur. The goal is to deliver at least 60% of orders on the next business day. „Shortening delivery time will clearly improve the customer shopping experience” – adds the board member. „Speed and quality of service have become key factors of competitiveness in e-commerce. That is why we are constantly investing in new technologies and developing our logistics network to reach customers faster” – says Schiebur.

As in all logistics, good cooperation between people and machines is key to meeting customer expectations and creating future-proof working conditions for the entire logistics team. That is why the Otto Group focuses on state-of-the-art technologies, artificial intelligence, and robotics in its logistics centers.

Since the end of July, the distribution center in Iłowa has been gradually increasing its operations. The warehouse is filling up, and operations are in full swing. Next year, this state-of-the-art Otto Group logistics center is expected to be operating at full capacity.