Hermes reports 7% revenue increase and focuses on e-commerce growth
Hamburg-based retail and logistics services provider Hermes has reported a 7% increase in revenues for the financial year 2014/15 and is focusing on new opportunities in the e-commerce marketplace. Global revenues for the year were 2.230 billion euros, up from 2.083 billion euros in 2013/2014.
“The European parcel and logistics business played a major role in this success moving over 530 million parcels,” said Hermes.
The company said that will be adding new services to “enhance its parcel shipments” in 2015.
“Hermes has been growing successfully for 11 years now. This is largely down to our early moves into international markets. Now we are pushing ahead with international expansion into Asia and North America and are looking to leverage business opportunities arising from the digital transformation,” said Hanjo Schneider, member of the Executive Board Otto Group with responsibility for services and chairman of the Supervisory Board Hermes Europe GmbH.
Schneider said that Hermes has a packed agenda for 2015: “This includes the introduction of new services in our parcel unit, online solutions for global shopping and building up start-ups such as our storehouse service ‘Send & Store’. On top of this we are investing massively, particularly in our German logistics and technical infrastructure. Our intent is to make Hermes the logistics partner of choice for e-commerce players of all sizes.”
European parcel network
Germany, the UK, Austria, Italy and Russia accounted for the bulk of Hermes’ European deliveries in 2014/15, collectively recording 496 million parcels, which was 7% up on the previous year. These shipments included around 12 million catalogues and more than four million items of furniture and household appliances.
“By securing cooperation agreements with national delivery partners in other EU states and integrating them into its own network, Hermes was able to enhance its intra-European parcel delivery service,” said Hermes. “As a result, non-Group business climbed by 12%, the fifth year in succession it has achieved double-digit growth.”
E-commerce growth
Europe’s strong e-commerce market was a development which the company believes “bodes well for the types of services Hermes provides”. The company expects to see online shopping “become ever-present” and it has been gearing up for expansion. In 2014, the number of people employed in the 12 Hermes companies rose worldwide to 12,470, about 650 up on the previous year. Many of the new jobs were based in the UK.
In Germany, Hermes says it is “looking to increasingly target small and medium-sized distance sellers”. The company anticipates that it will have invested around 300 million euros in its logistics network by 2019. An example of the new investment includes a 100,000 square metre distribution centre being built in Löhne at a cost of a further 90 million euros. Hermes Fulfilment and the Group’s two-man handling unit Hermes Einrichtungs Service will move into the new facility this year.
Other new developments in Germany include plans to introduce shared parcel boxes for private households. A pilot phase is set to start shortly with the national launch expected for the second half of this year.
Perhaps the most eye-catching of Hermes’ initiatives is the new BorderGuru service, which aims to take advantage of the online shopping growth that the company has been gearing up for. According to Hermes, BorderGuru “allows online retailers to sell and deliver their goods around the world”. BorderGuru is already facilitating shipment from the US to all destinations worldwide and now, claimed Hermes, “the coming weeks will see the start of initial tests for shipping from Europe to the US and China”.
Schneider commented: “The first tests have been conducted successfully and show how, thanks to this smart solution, we can help international retailers to close service gaps and address new target groups. Retailers have responded very positively to the one-stop processing, to transparency of costs and to the customer-friendly tracking system.”
As the BorderGuru roll-out continues, it should enable European and American retailers to sell more goods in the Chinese market and also give Chinese e-commerce providers the opportunity to expand into Europe.
In Asia, as in Europe, Hermes has been gearing up in preparation for the expected growth.
“To serve the rising demand for international transport from and to Asia from Europe better in the future, Hermes is expanding its market presence in China. Accordingly, Hermes Transport Logistics Asia was established, with offices in Hong Kong and Shanghai,” said the company. “This targets Chinese retailers looking for logistics solutions both in sourcing and shipping goods. Its focus is on both turnkey supply chain solutions and environmentally sound sea and airfreight transportation.”
