US same-day logistics company Velocity Express announced it had reduced losses by $82 million inthe fiscal year ending 1 July.
Net loss was down to $24.9 million ($1.57 per share) from $106.9 million ($21.01 per share)in 2005, on revenues of $202.4 million, down from $256.7 million in 2005, the company said in astatement. The fall in revenues was attributed to the closure of more than 40 unprofitablelocations.
Gross profit rose to $56.8 million, from $48.3 million in 2005, due to reduced delivery coststhrough the use of more efficient route structures generated by Velocity’s proprietary routeoptimization software and the conversion of the status of employed drivers to independentcontractors.
“These combined actions increased productivity, reduced vehicle costs and substantiallylowered insurance liability and premiums,” the company explained.
Operating costs decreased $24.7 million (26%), mainly due to lower legal and settlementexpenses and a reduced salary bill, and improved billing and collection reduced bad debt by $7.9million.
The acquisition of rival CD&L in August would result in further cost savings and marginimprovements worth $38 million when the companies are integrated, Velocity Express said.
“It is increasingly evident that the CD&L merger will provide important benefits to bothexisting and new customers in terms of broader national reach and expanded access to Velocity’sproprietary track-and-trace and electronic signature capture technology,” commented chairman andCEO Vincent Wasik.
“Furthermore, the outstanding managerial talent that has joined Velocity with the CD&Lmerger gives us even greater confidence that Velocity Express will be able to achieve itsobjectives for the merger.”
Buying CD&L makes Velocity the largest time-critical logistics company in North America,with annual revenues of more than $440 million and 5,500 independent contractor drivers, operatingfrom 150 locations in leading markets across the United States and Canada.
