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Top 50 21 Logistics of change


The markets within which third party logistics providers have been changing, driven by economic conditions and technological developments.Malory Davies looks at some of the key trends as companies position themselves for growth.


F


romoneperspective, it is all tooeasy tothink that there is no future for the traditional shop. Why shouldsomeonemake the effortof travelling into a crowded town or shopping mall, and hunting


around a store that might or might not have the right product, and then taking it home – when it is so much easier to sit at a computer and complete the transaction in amatter ofmoments. The problem of course is instant gratification – order


goods online and it can take days – and sometimes several attempts – to get them. As retailers seemore and more of their businessmoving online, the pressure is on for bettermethods of delivery to the customer. And that is having an impact on the demand for services from third party logistics providers. If you reallywant to, you can noworder clothes online


and have them delivered within 90 minutes. It’s costly, but apparently there is amarket for that level of service. And of course, there are some sectors where there is a


move away from physical products to electronic downloads – computer software, music and even films are all going thatway. Wincanton, like many of its competitors is targeting


multi-channel retailing as key areas of growth. It’s part of a new strategy that has seen the company go through a period of dramatic change, selling off its continental businesses to focus on its core domesticmarkets. It sold its road business in Germany as well as


businesses in central and eastern Europe to the Raben Group in a deal valuing the businesses at 36 million euros (£32m). The logistics business in the Netherlands was sold to


JCL Transport und Logistik in a deal worth 10.5m euros (£9.4m). All the remaining continental businesses to German group Rhenus for £38million (44meuros). And in theUK,Wincanton sold its 20 per cent stake in chilled logistics specialistCulina Logistics for £11m. It leaves the group significantly smaller, but more


profitable and more focused. It brought in Guy Elliot from DHL to run the key division focused on retail and consumer. Ceva has also been working hard at strengthening its


balance sheet. In February, the group,which is owned by Apollo GlobalManagement, completed a programme of refinancingthateliminatedsome500meurosofdebtand


Ceva chief John Pattullo In February, Ceva completed a refinancing programme that eliminated 500m euros of debt and 350meuros of securities.


Supply Chain Standard September 2012 market update Costly collaboration


The past yearhas seenanumber of major logistics and transport organisations fall foul of regulatory authorities inboththeUS andEurope. In theUS six international freight


forwarders agreed to plead guilty and to pay fines totalling $50.27million for their roles in conspiracies to fix a variety of fees and charges in connectionwith the provision of freight forwarding services for international air cargo shipments. And the EuropeanCommission has


fined 14 international freight forwarders a total of 169meuros for price fixing in the air cargomarket between 2002 and 2007.


Deutsche Post (including its


subsidiariesDHL and Exel) received full immunity fromfines under the Commission's 2006 leniency notice for all four cartels,as itwas the first to reveal their existence to the Commission. Some of the organisations have


said they intend to appeal against the fines. There have also been problems for


airlines. In theUS,22 airlines are facing fines ofmore than $1.8bn for anti-competitive practices,while, in Europe,11 air cargo carriers have been fined a total of 799meuros for operating aworldwide cartel.


AlanWilliams ofUPS Focusing on providing the logistics for the Olympics.The US giant is also in the process of buying one of itsmajor rivals.


350m euros of securities in parent group Ceva Investments Ltd. Ceva has also filed documentswith the US Securities and Exchange Commission opening the way for an initial public offering which, it has been suggested, could raise up to $400m(£250m). However, CEO John Pattullo says that no decision had


yetbeentakenonwhen, or evenwhether, itwill go ahead with an IPO. Even DHL has not been immune from the pressure


to rationalise. It closed its US domestic parcels service in 2009 and a year later, it sold its UK domestic parcels business toHome DeliveryNetwork – since renamed Yodel. Andithas gone ontowithdrawfromanumber of other


domestic parcels operations including China, Canada and Australia. It has been rewarded with strong profits growth over


thepast year.Reviewing the group’sperformance in2011, DeutschePostDHLchiefFrankAppel said: "Wemet allof our targets and have – by continuing to implement our Strategy 2015 – further bolstered the foundation for future growth." Operating profit at DHL Supply Chain rose 56.7 per


cent to 362m euros last year on sales up 1.2 per cent to 13.22bn euros. And the Express division also performed strongly,


according to the group’s annual results, with operating profit (EBIT) rising 86.5 per cent to 927meuros on sales up 22 per cent. Asia Pacific has been a strong driver of growth for both businesses over the past year. Elsewhere in the express parcels sector, TNT Express,


which was demerged fromthe Dutch Post Office inMay last year, had a tough time with heavy losses in the


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