Plotting course: Hermes set to invest 300 million euros in its logistics systems
Hermes is looking to modernise its logistics infrastructure of its German parcel unit and will be investing around 300 million euros by 2018. With new locations, and customer-focussed services, the company is preparing for further growth and the boom in e-commerce. As part of the process, Hermes is looking to establish itself as a partner for small and medium enterprises (SME). Consequently, Hermes is planning to restructure its logistics network into 35 highly-efficient, optimally located logistics centres set up to process over 400 million parcels annually. "Hermes is aiming to continue its successful course of the recent years and sustain growth in its parcel unit. This new infrastructure will enable us to achieve the best possible position to serve the growing needs of distance trading. In doing so, we will be achieving three significant effects: greater regional proximity to clients, later cut-off times for parcels and shorter run times. From now on, customers will receive their parcels quicker and more conveniently. This will help us not only meet market demands at the highest level but we will also remain a reliable partner for trade and for millions of private customers," explains Hanjo Schneider, Member of the Executive Board for Services at the Otto Group and CEO of Hermes Europe. Given its history as the logistics arm of the Otto Group and as a partner for many leading distance sellers, the Hermes logistics system has largely been set up to satisfy the needs of large companies. In future, the company is targeting the acquisition of SME clients offering their range of goods online. With this in mind, the logistics network is to be adjusted on a regional basis, seeking geographical proximity to prospective clients. Nationwide service with new location structure The basis of the new organisation targeted for 2018 is grounded in 35 highly-modern logistics centres. Construction work for some of these will start in 2015. The newly planned building complexes, estimated at around 8,000 square meters will facilitate the processing of 10,000 parcels per hour. Restructuring plans envisage the merging of 29 depots in the coming years, their integration in nearby existing buildings and/or their removal to new locations. The locations affected will be examined in the months ahead following discussions with employee representatives. "Germany plays an important role in the continued expansion of our European network. Investment made into the German market is in the firm belief that we will continue to grow. And to do this, we need to draw on the commitment and experience of our employees, especially in the new locations," says Schneider. Logistics management in Germany to be newly coordinated Alongside this, Hermes will be synchronising the organisation of its transport services much more intensely than before. Consequently, Hermes Logistik Gruppe Deutschland (HLGD) and Hermes Transport Logistics (HTL) will be managed by a joint Executive Board. Given that the companies on the whole address the same target groups, the aim is to step up the coordination of its market presence and the manner in which it serves its clients. Joint sales solutions will also cut structural costs. "In the light of market requirements, the business units of HLGD and HTL will be aligned with immediate effect under the trusted management of Frank Iden and Frank Rausch. The new management structure will assess how a market-focussed inter-company organisation can be developed and how to generate operational and financial synergies," explains Schneider.