City Link invests £31m in network revamp
City Link plans to spend at least £31m this year as it overhauls its operating model.
The parcels carrier will return most (about 300) of its hardsided trailers and invest in 280 curtainsided double-deckers and 12,000 pallet cages. The Coventry hub, which has been operating as a hybrid since the attempted integration of the City Link and the Target Express businesses (aborted last year), will revert to its original model, receiving curtainsiders with pallet cages only.
The Wednesbury, West Mids hub, which is set up for hardsided trailers and roll cages only, will switch to the curtainsided model in December. The change of models holds no fear for City Link’s management team; MD Petar Cvetkovic tells Motor Transport: “A lot of our depot managers have experience of both models.”
Sales and marketing director Stuart Godman adds: “The biggest challenge will be Wednesbury, but we’ve got 10 months to do it. The benefits for the business are huge in terms of operation and safety.”
Godman says the business is looking to add another 20% to its network footprint this year, expanding from 2.5 million square feet to three million square feet.
On top of this, customer care has been decentralised, creating 120 new positions at depot level. City Link has also added 20 general managers, returning to the old model of one depot, one general manager. There will also be investment in new billing software.
These announcements come as parent Rentokil Initial revealed the results for Q4 and 2008 as a whole.
The changes instigated by Cvetkovic and Godman mean City Link lost only £4m on a Q4 £97.2m turnover – an improvement on the £16.9m loss on £96m turnover in Q1 2008.
The total loss for the year was £43.5m (against a profit of £44.8m in 2007) on turnover down 8.4% to £381.9m.
City Link experienced record volumes in the week before Christmas. Cvetkovic reveals: “We had service bang-on every day.”
“Great service at Christmas is concrete evidence that this business has turned,” adds Godman. “There’s a sense of achievement, a sense of belief. The sales team is walking tall. But we’ve got to raise the bar again.”
