Hermes today announced plans for a £31 million hub in central England to increase UK capacity by 45% after posting a 25% rise volumes across Europe during the peak season, driven by the UK, Germany and Austria.
The 270,000 square foot Midlands Super Hub will have the capacity to process up to 1.1 million parcels every day and will increase the company’s overall parcel processing capacity by 45%, as well as creating more than 200 new permanent jobs. Work on the facility commenced earlier this week.
Carole Woodhead, CEO at Hermes, said: “As work begins at our new facility in Rugby, we are embarking on an exciting new chapter in the history of Hermes that will ensure we can continue to provide retailers with world class services and solutions. The hub’s enormous throughput capability and built in flexibility will help to future proof our business whilst also ensuring we are in the very best position to grow alongside our clients.”
The construction of the Midlands Super Hub follows last year’s significant investment that saw Hermes add a secondary sortation tier at its northern automated distribution hub in Warrington, which can now process up to one million parcels a day.
Woodhead added: “The substantial investment at both Rugby and Warrington shows how we continue to strengthen our network and infrastructure across the UK. This will ensure we have the capacity to cope with prolonged periods of intense activity as well as spikes such as Black Friday and Cyber Monday. We are laying the foundations for future growth, creating more employment opportunities and confirming our position as an industry leader.”
Separately, Hermes announced that it delivered record parcel volumes during last year’s Christmas peak period, shipping around 25% more parcels across Europe in December alone than in the same period in 2014. This represents the strongest Christmas business in the company’s history, which is mainly due to the positive development of its country subsidiaries in Germany, Austria and the UK.
In 2016, the group aims to continue its growth strategy generating additional capacities and expanding its global portfolio.
“We are delighted about such exceptionally successful Christmas business in 2015 which at the same time delivered the strongest end of the year in our company's history,” Frank Rausch, CEO of Hermes Logistics Group Germany and Hermes Transport Logistics GmbH, said. "In Germany, we clearly exceeded forecasts and, just in time for the festive season, reached more private and retail customers than ever before. This has required excellent preparation and powerful operational units at Hermes' hubs, depots and in our European network of partners."
Germany remains the group’s largest market with a total of 36.6 million parcels being shipped in December 2015. This represents a year-on-year increase of 15%, in line with the company’s forecast last year. The peak Christmas volumes were boosted again by Hermes’ major customers and, above all, more small and medium-sized retailers shipping their B2C parcels with Hermes than last year. At the same time, the volumes of private customers (C2C) also increased all over Germany last Christmas.
“New digital services helped speed things up: ten times as many customers used the mobile parcel label in 2015 as in 2014 and the Hermes app for smartphones and tablets reached 1.5 million downloads just before Christmas,” Hermes said.
Along with the positive development on the domestic level, German customers also increasingly used Hermes’ international parcel services last year, with most of the parcels being sent to Austria and the UK.
In Austria, Hermes was able to profit significantly from the growing e-commerce activities of renowned retailers expanding internationally. As a result, parcel volumes within Austria rose by around 20% during the Christmas period. Trade between Germany and Austria also increased considerably. Thanks to the expanded range of services that Hermes introduced at its 1,600 Austrian parcel shops, the company was able to win many new customers in the country who decided to ship their parcels with Hermes for the first time. In 2015, Hermes also started delivering on Saturdays thus providing a six-day delivery service in the country. In addition, it installed, in cooperation with Austrian Post, 13,000 parcel boxes for private customers.
In the UK, Hermes posted its most successful results for Christmas since the company was founded. In December 2015, Hermes UK shipped 30.3 million parcels which represented a 24% increase on the same period in 2014 and the strongest increase within the Hermes Group compared to other country subsidiaries. The Black Friday online sale event on November 27 generated around 8.2 million additional parcels for Hermes UK.
The UK network worked at full capacity throughout December, processing at times more than one million parcels daily at 22 different logistics centres. Parcel shop deliveries gained in popularity with Hermes shipping 40% of all domestic shipments to its 4,500 parcel shops as an alternative to home deliveries.
Carole Woodhead commented: "We are really proud of our strongest Christmas business to date and the professional way our teams handled operations. With our minds on our peak season, we were foresighted in our investments last year, expanding a second line at our largest hub in Warrington, opening 125 new depots and employing 3,000 extra couriers to cover the Christmas business. All this hugely increased our capacity and enabled us to provide a fantastic service around Christmas."
Hermes UK has started the new year with a major IT project updating its scanner technology at over 20,000 pick-up/drop-off points with hand-held devices from Cognito iQ, a leading provider of mobile workforce management solutions. The project required an investment of several million euros and is one of the largest corporate IT implementations in Europe.
