Hermes Logistics Group Germany (HLGD) is planning to close the third-party road transportactivities of Hermes Transport Logistics (HTL) this year as part of its restructuring and
investment strategy to refocus on its parcels business boosted by the growing e-commerce.HTL was launched in 2009 as a European provider of road freight transportation and incorporatedthe Otto Group’s existing air and ocean freight forwarding business under a strategy of expandingin new business areas.
However, in response to changing market conditions, the Hamburg-based group is now aiming for astronger coordination of its transportation operations by bringing the German parcel business andthe Transport Logistics division, which provides freight transportation, under common management.Some 200 administrative jobs could be affected.
Company spokesman Martin Frommhold told CEP-Research: “The market presence and the customerapproach of HLGD and HTL should be synchronised more strongly and synergies maximised. With thisinteraction and the earlier announced comprehensive investment programme worth €300 million to beimplemented until 2018, the companies are preparing for future growth which is particularly drivenby the continuing boom in e-commerce and that is what we want to place a stronger focus on.”
Along with the massive investments, structural adjustments are necessary to further strengthenthe company’s core business – parcels services, Frommhold explained. “Hermes ranks second in thishighly competitive market and plans to expand its lead compared to other market players. The aim ofany structural changes is to create, in particular, group-spanning organisational forms.”
He told CEP-Research that the company’s plans in this respect developed over the last few monthscould lead to “personnel changes”, and are thus subject to co-determination. “We are starting nowto coordinate this with the employee representatives. It has also been analysed what kind ofconsequences the infrastructural changes (reduction of the depot network) and the strategic focushave on other business areas of Hermes such as ground transportation.”
He specified that personnel-related topics do not always concern redundancies but can alsorelate to restructuring. But he admitted to CEP-Research that 200 jobs could be affected by thechanges that are currently being discussed (the merger of HLGSD and HGL, closure of HTL third-partyroad business etc).
In addition to the existing 60 logistics centres, the company plans to restructure its logisticsnetwork with 35 high-performance regional logistics centres that are optimally positioned in termsof shipment flows and with capacity to handle over 400 million shipments annually, as part of theinvestment programme. This way, Hermes aims to get closer to potential customers, especiallyregionally-based SMEs. The construction of the first state-of-the-art logistics centres is due tostart this year.
The company said last year that the planned buildings will cover over 8,000 sqm each with thecapacity to sort 10,000 shipments per hour. As a result of the planned restructuring of thelogistics network, 29 existing branches are due to be merged and integrated into nearby existingbuildings or moved to new locations in the coming years.
“In the course of planned location changes, all traffic will be inevitably brought into a newbalance and the transport network utilised with the parcel business. Therefore, there won’t beenough spare capacity for further orders so we plan to terminate the road transport businessprocess outsourcing by the end of the year. This move is also subject to negotiations with theemployee representatives. All the other HTL businesses, especially the Sea & Air Business andthe expansion in Asia will be developed further.”
From 2011-13, Hermes Germany already made a large-scale €120 million investment in its networkexpansion building new 18 depots across the country to cope with rising volumes driven bye-commerce growth.
