UK carrier Yodel has invested in four new depots strategically located across the country to increase sorting capacity in response to a 13% rise in parcel volumes.
Over the past 12 months, Yodel has opened new larger service centres in Northampton, Selby and Farnborough, with a fourth opening in May in Alfreton, Derbyshire. As a result of these investments, it has created over 160 new jobs at the service centres for drivers, sorters, administrators and support workers.
The company, which has been steadily reducing its losses, also plans to open further sites during this year in a multi-million pound major investment programme in the run-up to the peak Christmas period.
The investment will enhance service levels throughout the UK with the new locations chosen for their proximity to major motorways and town centres. The new service centre strategy also works towards removing the requirement for temporary additional satellite sites during peak times, such as Christmas, when parcel volumes increase dramatically.
Fully operational by the end of July 2015, the site in Alfreton, Derbyshire will be able to handle 34,000 parcels per day, allowing for business and volume growth in the Midlands region.
Selby and Farnborough became operational in October 2014. The Selby site, including a 66,000 sq ft distribution facility, currently handles 10,500 parcels per day and undergoing investment to raise its capacity to 22,000 parcels per day.
The new service centre at Farnborough, which supports deliveries into Yodel’s South East network, is anticipated to deliver over 22,000 parcels a day in the run up to Christmas with new jobs created across management, sortation, and administration with further driving based opportunities as the site develops.
The Northampton service centre, which opened in September 2014, currently processes an average of 16,000 parcels daily and has capacity to handle up to 35,000 parcels per day.
Dick Stead, executive chairman of Yodel, said: “These recent investments form part of a phased plan to increase the capacity and quality of Yodel’s service centre infrastructure, evidence of our long term aims within the UK parcel market. The developments demonstrate the on-going commitment of our shareholders and are a vote of confidence for the team here who continuously strive to deliver a high quality service to our clients and their customers.”
The company recently reported an EBITDA improvement in excess of £40 million for the year ended 30 June 2014, and said the improvement was continuing in the current year, “signalling positive EBITDA in the near future”. The current 13% volume growth is being generated by new account wins, including customers returning as the company improves performance and satisfaction levels, contract renewals and increased parcel volumes from existing clients.
Commenting on the figures, Stead said: "Yodel's management and its shareholders remain absolutely focussed on developing a parcel business with a profitable long-term future, by providing great customer experience at a great price.”
He added: "The UK parcel market remains a highly competitive place; however, following the demise of City Link, we expect to see capacity issues in the wider market. In particular around specific peak demand days resulting in increasing prices for guaranteed next day parcels."
Neil Lloyd, Yodel's Chief Executive Officer, commented: "The significant improvement in customer experience of recent years continues but we are not complacent and we are constantly investing to make our customers' experience a better one. It is very pleasing to see another year of huge improvement, achieved with the support and hard work of the whole Yodel workforce, our self-employed couriers and drivers. We benefit from improvements in consumer confidence but we are also taking market share, and, therefore, growing at a faster rate than the parcel volume in the market."
Yodel handles over 155 million parcels every year. Its network of over 50 service centres receives trailers of parcels from Yodel’s three central sorts, strategically sited at Shaw, Wednesbury and Hatfield. Parcels are then processed and sent out for delivery.
