Thursday 27th Oct 2016 - Logistics Manager

TNT targets €220m savings from restructuring plan

TNT Express has set out plans to make recurring savings of €220 million by 2015 with a series of measures including consolidating services, optimising its infrastructure and reducing indirect costs. The restructuring is expected to cost €150m by the end of 2015.

Some 4,000 jobs will be affected over the next three years, under the programme which it calls “Deliver!”

The group wants to focus on higher margin services and customer segments. It is targeting SMEs and single source customers, higher weight parcels and palletised freight along with international and special services products.

There will be a new management structure with an executive board and a global functional board with cross-company responsibilities.

The previous regional structure will be unwound. The new Business Units Australia/New Zealand, Benelux, France, Emerging, Europe/Americas, Germany, Italy and UK/Ireland will report directly to the chief executive officer.

The group is in the process of selling its domestic businesses in China and Brazil. It said the sale process in China was well underway, while preparations for sale of the Brazilian business had started.

24027  Tex Gunning is due to take over as CEO on 1st June.

In its intercontinental services it is looking at sharing aircraft capacity, along with sub-leases and lease terminations to reduce its exposure on aircraft capacity.

The €220m of recurring savings are expected to come from improvements in cost efficiency and discipline in its operating model.

These include consolidating services, including shared service centres for administration; along with optimising infrastructure by concentrating depots and hubs within certain country regions).

It expects productivity increases including optimised depot sort and load activities by changing depot configuration and processes.

Bernard Bot, interim chief executive officer said: “Our business faces difficult market conditions and strategic challenges but we have a unique competitive proposition: an unrivalled European network, worldwide connections, an integrated range of services and recognised dedication to customers. Our updated strategy builds on these strengths.

“Successful execution will be critical to improving our performance. We are therefore taking immediate steps to reshape our portfolio, make the company leaner and pursue efficiencies in operational and supporting processes. We are also investing in our infrastructure to increase productivity and in IT solutions to better serve our customers.

“The Deliver! improvement programme we are launching will create a more focused, efficient and profitable TNT Express.

“Together with the supervisory board and proposed CEO Tex Gunning, we have full confidence in TNT Express’ service offering and operations and are committed to Deliver!”

The group is forecasting growth of about two per cent a year in the period up to 2015 and adjusted operating profit margin of eight per cent.