DHL tie-up Iceland deal

DHL Supply Chain has been awarded a contract worth £500m across five years to manage the UK warehousing and distribution of all Iceland goods.

DHL Supply Chain has been awarded a contract worth £500m across five years to manage the UK warehousing and distribution of all Iceland goods.

Iceland has been supported by DHL through steady growth over the last four years and as a result DHL will service a further 70 stores as the company’s expansion continues in the coming year.

The new stores will be serviced by Iceland’s existing network of distribution centres and DHL will be responsible for ensuring that the sites are able to manage the increased volume while maintaining service levels. As the majority of new stores will be based in the South of England, DHL will also manage the re-allocation of existing stores to alternative distribution centres within the network.

Over the last two years DHL has saved Iceland over £4m in operating costs and is set to save a further £3m in the coming year. These savings are being achieved through improvements in warehouse productivity, planning, geographical store delivery rationalisation and fuel efficiency initiatives.

John Mackie, supply chain director for Iceland said: “DHL have proved over the last 3 years that they are capable of responding to the needs of the Iceland business. They have driven cost savings whilst significantly improving service to our stores. As a customer our demands are extremely high; the DHL team have responded to these challenges and delivered excellent results. Awarding this 5 year extended deal shows the confidence we have in the DHL team. We look forward to continuing to work in partnership to drive further cost savings and again improve service.”

Chris Sharp, managing director, food retail for DHL Supply Chain says: “We were originally appointed by Iceland in 2005 to manage just two of its four distribution centres. Within a year those centres had become the highest performing in terms of costs and service levels. As a result we were invited to take on management of the remaining two. We’re really proud of what we have achieved and it’s a testament to our commitment and high standards that we are continuing to support Iceland through the next five years”.