US regional operator Velocity Express seeks international partners
Velocity Express plans to expand its international business and is looking for partnerships with logistics suppliers. The company meanwhile reduced its losses in the fourth quarter but its revenues also dropped due to customer losses.
The company said it is stepping up its focus on its Global Alliance initiative to capture the significant long-term opportunity in the worldwide marketplace. “The international express delivery market is a USD 20 billion industry, with 2.1 million shipments daily and projected annual growth rates of 10 pct. Strategically, it makes sense for us to partner with logistics suppliers in other countries and other segments of the logistics industry”, stated Vincent A. Wasik, Velocity’s Chairman and Chief Executive Officer.
Wasik said the company has signed up Shanghai-based ALC Advisors to assist on the Asian component of the alliance. “We are also in discussions with potential partners in other regions of the globe and other industry segments,” he added.
“Our partners will gain access to Velocity’s nationwide, ‘last-mile’ delivery network in the U.S. and our technology tools and systems. Velocity will gain increased in-bound delivery volumes and be able to offer its U.S. retail customers a fully integrated solution providing 100 pct end-to-end, package-level visibility from factory door to store floor,” Wasik pointed out. Velocity Express has some 150 locations across the US and uses about 5,500 independent contractors for collection and delivery.
Velocity Express also announced operating results for the second quarter and six month period. Revenue for the quarter ended December 29, 2007 fell to USD 86.1 million from USD 102.3 million in the same period one year earlier. This was due to the loss of two significant contracts with a financial institution and Office Depot, the end of unfavourable contracts inherited from the merger with CD&L, and the generally slow economic environment, which combined more than outweighed new customer acquisitions.
However, the company succeeded in reducing its Q4 operating loss to USD 3.9 million from USD 8.7 million one year earlier. The net loss was USD 8.9 million compared to USD 13.4 million one year earlier.
