The Logistics Manager Contracts Analysis has revealed some huge deals – and some unexpected results. Logistics giant DHL Exel Supply Chain won several multi-million contracts, including a £130m deal with JD Wetherspoon and a £53.5 million renewal with Nisa Today’s. TDG now boasts a £55 million, five-year deal with Kellogg’s, the Lloyd Fraser Group sealed a £30 million contract with Manor Bakeries, while Wincanton won a £150m ten-year renewal with Punch Taverns.
There have been some historic buyouts what with Christian Salvesen becoming a part of French transport group Norbert Dentressangle. Last year also saw the merger of food and drink supply chain specialists Baylis and Culina Logistics to form the new Culina Logistics.
The survey has shown an increase in the number of UK-based contracts since last year. Among these was Tesco’s £15 million deal with the Stobart Group, and Unipart’s £5 million deal with retailer Habitat. But overall, there was a reduction in the number of European contracts notified to us.
What is becoming more and more clear is that the smaller logistics companies are establishing themselves better in the market, and are signing large contracts. Seafield Logistics closed four ‘six figure’ deals with Wilkinsons, Ardagh Glass, Nestlé Purina, and Premier Foods and Bedfords Transport now boasts a £4 million contract win with Polestar.
TM Logistics is on record as saying: “Recent times have seen the logistics market opening up as the dominance of the ‘big ten’ reduces. Coupled with the fact that many companies are now enjoying the benefits of outsourcing, this creates new opportunities for medium-sized logistics companies.
“IT is continually improving, enabling providers to tap into new markets and offer increasingly specialised services such as online portals.”
One of the points highlighted in the survey is this year’s lack of fourth party logistics contracts compared with the previous year. TDG was the big exception with a huge 4PL deal with Aggregate Industries. This follows a seven year contract with steel giant Corus, signed in 2006, which marked its first venture into fourth party logistics, and this second win reflects the company’s aim to win more in the future.
The UK’s economic slowdown is sure to make things tougher for all in the coming year. But confidence among logistics companies remains steely. Keith Boardall, managing director of Reed Boardall, says: “In periods of rising costs, there is the opportunity to be innovative and free-thinking in tackling costs and re-engineering methods to win more business.”
David Frankish, chief executive of NFT Distribution, said earlier this year: “Critical to succeeding in tough market conditions is to increase market competitiveness by innovating new efficiencies in the supply chain for clients through investment in new technologies and increased vehicle use to keep empty running miles to a minimum.”
For many 3PLs, environmental thinking has already become embedded in their strategies. The trend for greater environmental awareness is moving in one direction only and is unlikely to slow down. Customers will continue to demand green credentials, and it is generally accepted that companies will be unable to win new business if they can’t meet the standard. The Logistics Manager Contracts Analysis provides details of the major third party logistics contracts signed up until a little later than 31st July 2008. We apologise for any errors or omissions.
If you would like to contribute to the next survey, please contact Jessica Davies, email [email protected]