Backhaul service boosts supply chain efficiencies Substantial sheds planned for Magna park

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Gazeley and MetLife have formed a joint venture to develop substantial new distribution facilities at Gazeley’s Magna Park UK in Leicestershire and its G.Parks in Bedford and Hemel Hempstead. Logistics property development company Gazeley, which is wholly-owned by WalMart, and MetLife Real Estate Investments of the US, will deliver one of the largest committed programmes of distribution warehouses to be built in the UK.

The two-phase transaction has a total value of about £200M, involving 185,800sq m of national and regional distribution space on more than 100 acres of land. All of the sites earmarked for development are in strategic locations close to the M1 or M6 motorways.

Some 86% of the UK population is within a 4.5 hour truck drive of Magna Park, one of Europe’s largest dedicated distribution parks.

Construction of the first building in the second phase of the deal is already underway at Marsh Leys on Gazeley’s G.Park Bedford scheme. The 41,340sq m unit is scheduled for completion in November 2004 and is being made available to top quality occupiers seeking warehouse accommodation.

Five other distribution buildings – ranging in size from 39,018sq m to 9,292sq m – will be developed at Gazeley’s flagship Magna Park UK in Lutterworth. Construction of the first and largest of the Magna Park units has commenced with completion scheduled for January 2005. These units are also being marketed to potential occupiers on pre-let or sale basis.

Gazeley will act as the development manager for the joint venture and has appointed its European construction partner, GSE UK, as main contractor for all eight buildings.

Leading business-to-business services group Hagemeyer UK has implemented a new backhaul service, which is already revolutionising its distribution network. The company has made a significant improvement in maximising the time its delivery vehicles spend on the road to reduce costs and boost supply chain efficiencies.

The new backhaul service means that Hagemeyer UK can now offer suppliers a collection service, so that they do not have to use their own vehicles for delivering products to Hagemeyer’s national distribution centre at Runcorn. The company currently has 200 vehicles that deliver on outbound routes every day – using these to collect goods from suppliers on their return journeys creates enough capacity to backhaul from Hagemeyer’s entire supplier base of more than 450 companies nationwide.

When suppliers use a third-party carrier service an additional layer of complexity is added to the supply chain. This, coupled with the difficult transport infrastructure in the UK, can make delays unavoidable and rebooking of deliveries strips efficiency from the supply chain still further. The backhaul service goes a long way towards removing these inefficiencies whilst reducing the costs of product delivery, resulting in direct savings for both Hagemeyer and its suppliers.

Also, backhaul enables suppliers to choose collection times that are appropriate to their own production schedules, and the process of booking into the NDC is entirely managed by Hagemeyer. Late delivery issues and logistics planning headaches are completely removed, leaving the supplier to focus on production and picking, rather than delivery.

These benefits are not purely economic – better use of current journeys and the subsequent removal of up to 200 lorry-loads of national transport per day will significantly reduce environmental impact.

Since Hagemeyer undertook its first supplier backhaul day earlier this year, 11 suppliers have come on board, all of whom are already starting to reap major benefits.

Andrew Holroyd, logistics development and UK transport manager for Schneider, one of Hagemeyer’s major suppliers of electrical power and control products, says: “We implemented the backhaul process after we’d experienced some timing and efficiency problems in transferring products into Hagemeyer’s NDC at Runcorn. Once the weekly backhaul service went into action, this issue simply disappeared. We have achieved improved product availability in Hagemeyer’s national network of branches, whilst minimising despatch and delivery issues at our distribution centre.”

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