Citylink Results show hope for Rentokills Parcel Division
Posted by fantasycouriers on November 21, 2008
Citylinks Q3 results recently published show that although the company is still a major loss making company, it is reversing some of the trends that have contributed to its previously stuggling history.
Citylink states that it still on course to make a £45 million loss for the 2008 year, however it is pleased to say that the losses are reducing by £1m per month due to cost reducing strategies including reducing the vehicle fleet by 10% and employee numbers by around 1000 during the last year.
A major turnaround as far as Citylink is concerned is concerning customer service. In the year to April 2008 Citylink made £20m worth of credits to its customers, for late or non deliveries, breakages, losses etc. Improving customer service has been a major target for Citylink, and recent results indicate that Citylink is now providing a 99% on time service, which is operational excellence as far as the parcel industry is concerned, as a result credits to customers for the next twelve months are expected to be 75% lower at only £5m.
All of this has been acheived in what Alan Brown (CEO of Rentokill) describes as a “rawly flat” market, with a worsening revenue trend.
The challenge for Citylink, and all of the parcel networks, will be delivering the Christmas parcels.
Traditionally the spending for Christmas starts in November, and November’s parcel volumes show the start of the Christmas rush. This year however, it looks as if November’s parcel numbers will show little or no increase on Octobers. Alan Brown voices concern that there could be a “huge surge” in the last two weeks of December, and that the logistics and distribution industries are on “tenderhooks” waiting for the seasonal uplift to start.
The overall statement that sums up the entire industry very well is that it is in a “complicated situation”. And that is a fair summary.
