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Amazon networkwill hit parcels growth, saysRoyalMail
The development of a delivery network by Amazon will reduce the growth in the UK addressable parcelsmarket to between one to two per cent for two years,RoyalMail has warned. “This was primarily due to
the impact of a change in the mix of the parcels we carry and the highly competitive environment in the UK parcels market.We estimate Amazon’s own delivery network will reduce the annual rate of growth in the UK addressable market to 1-2 per cent for approximately two years. UKPIL parcel volume grew by two per cent.” CEOMoya Greene said: “The
UK parcelsmarket remains challenging. As the pre- eminent UK parcels delivery company,we are targeting a number of new, growing areas, and delivered two per cent volume growth in a competitivemarket.We had a better than expected performance in UK letters. GLS, our European parcels business, demonstrated a strong performance with better than expected volumes in domestic and export parcels.” Letter revenue of £2.2bn was
up one per cent, primarily due to electionmailings, but addressed letter volumes decreased by three per cent.
want to return items to track their parcel through to delivery back to the seller.” Total group sales were up
two per cent to £4.5bn in the half year to 28th September, but operating profit after transformation costs was down from£283mto £232m. Greene said: “We have
Total revenue in UKPIL was flat at £3.7bn. “The UK has one of themost
developed e-retailmarkets in the world,with around 10 per cent of all retail sales conducted
online.This is estimated to rise to 13 per cent by 2017.Online retailers and consumers are increasingly focusing on
delivery.They want services that are quick, frequent, reliable and competitively
priced.They also want a reliable returns service. “We are targeting higher
growth areas, including clothing and
footwear.This is helping us to grow business with a number of large retailers and e-retailers. As we
seek to increase our share of key growth segments,we are working with e-retailers to be more flexible about the dimensions of parcels, and packagingmaterials we will accept. Poly-wrapped clothing and footwear, including returns, can be delivered cost- effectively on foot using trolleys. “We are offeringmore
support to eBay sellers – key customers of
ours.RoyalMail and ParcelforceWorldwide are one of the few delivery providers for eBay’s click and collect service with Argos stores across the UK.We have also strengthened our strategic partnership with eBay by enabling buyers who
delivered two per cent revenue growth together withmargin expansion, in line with our expectations.Our tight cost controlmeant that UK costs were flat on an underlying basis and we are expecting a similar performance for the full year. Looking further ahead,we are targeting a flat or better underlying UKPIL cost performance in 2015-16. “Our performance remains
in line with our expectations for the full year.But, as always, this depends on us delivering another great Christmas, for which we are fully prepared.” * RoyalMail defines the
addressablemarket as that segment of the UK domestic parcelsmarket which it, and other independent parcel delivery companies, can compete for. It includes the vastmajority of individually addressed B2B,B2C and C2X parcel traffic weighing up to 30kg delivered by independent parcel carriers, but excludes parcels delivered by retailers’ own delivery networks.
Cevamoves fromregional to local businessmodel
Ceva is transforming its operatingmodel to increase the velocity of the business by adopting a local rather than regional model. Fromnext year it will have 17 local geographical clusters – some will be a single large country, others will contain several countries in close proximity. CEO Xavier Urbain said: “For our
customers, local ownership of execution is very good news, enabling faster decision- making and greater responsiveness to their needs.” The company’s sales and
operating profits have risen between the second and third quarters, the group said. EBITDA, at $64million, was up 6.7 per cent on sales up 0.7 per cent to $1.99bn. “Our focus over the course of
2014 has been very deliberate: we have rebuilt the management teamwith executive leaders who know the
industry, which has had an immediate impact, and have organised our go-to- market plan based upon ourmajor business lines – air freight, ocean freight and contract logistics – to enhance customer value. “ The new operatingmodel eliminates the
existing region-based structures across the globe, opting instead for an operatingmodel consisting of 17 local geographic clusters of countries with standardised governance and business rules across all clusters. Clustersmay consist of a single large country, such as China, ormay consist of several countries in close proximity. The new structure takes effect 1 January 2015. “This is a transformative
Xavier Urbain
announcement for Ceva,” Urbain said. “The new operating model supports our objective to be themost professional logistics company by enhancing
our ability to provide impeccable execution to our customers.We expect it to increase our velocity across the board, enhance customer responsiveness, enable faster decision-making, and provide numerous opportunities to leverage speed as a competitive advantage.” Ceva expects the new operatingmodel
will drive increased network efficiency and productivity by eliminating duplicate work and functions, as well as strengthen communication across the business. In addition to announcing a new
operatingmodel, Ceva implemented a number of cost-saving initiatives during the course of the third quarter which are expected to show savings results in the second half of 2014 and into 2015. These measures include restructuring in a number of European countries, inauguration of e-auctions to drive transport savings, continued focus on SG&A reductions and site consolidation in Singapore, among others.
December 2014 Supply Chain Standard
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