Delivery and logistics company DHL Worldwide Express is launching a US$160 million hub automation and integration project at three of its U.S. package-sorting hubs. The company said the effort will enhance its processing operations and tracking capabilities for letters and packages across its U.S. network.

The rollout will begin this spring, and the system should be fully operational by the fall of 2006, according to Jay Kerley, director of operations services, information services, at DHL. The system will be installed in DHL"s distribution facilities in Wilmington, Ohio; Allentown, Pa.; and Riverside, Calif., he said.

When completed, the changes are expected to increase efficiency at the hubs, enable shipments to be processed faster and save the company about $125 million a year, Kerley said.

DHL spokesman Richard Gibbs said the Wilmington hub will upgrade its throughput capacity by 6.5 percent, the Allentown hub will see an increase of 45 percent, and Riverside expects an improvement of 194 percent.

"The system is being provided to us from outside vendors," said Kerley, who declined to name the companies involved. "The technology is an integration of a mechanical solution with a software set."

Kerley said the software holds all the business rules DHL needs to process packages for its customers based on origin, destination and type of service they"re requesting, such as same-day, next-day or ground service.

The system will also be able to read multiple bar-code standards. "In the industry today, most companies use proprietary standards that are only used by that company," he said. "We are putting together a solution that allows us to read multiple bar codes so we can better service our larger customers."

The automation process integrates the company"s software and hardware systems, including the conveyors, walkways and terminals that link the equipment, Kerley said.

The system includes proprietary sort software, which controls machine operations and manages package flow and information. It will also include new sort equipment that features hardware such as tilt trays for moving letters and parcels, dimensional and image scanners, singulators (mechanisms designed to individualize the flow of letters and packages), loaders, unloaders and video-coding devices, which are used to read labels on packages, DHL said in the statement.