Double-digit growth for Hermes

The company said that it is “planning additional investments of around €500m across all business units within the coming three years”.

Commenting on the results, Carle Walker, CEO of Hermes Europe, said: “We are very pleased to have once again achieved double-digit growth in the 2017 financial year, and to have recorded our most successful financial year to date.

“These results show that our clear focus on customer proximity and flexible services, internationalisation, digitalisation and innovation is working well, and that this is the approach to meet our customers’ needs and wants. An additional focus in 2018 will be on expanding our global cross-border parcel business. We plan to achieve this by means of comprehensive investments and the establishment of an independent business unit, Hermes International.”

Hermes said that 2017 brought strong growth in the group’s core market – the Europe-wide distribution of goods and consignments.

According to the company statement: “The Hermes parcel companies in Germany, the UK, France, Austria, Italy and Russia were again able to clearly participate in the continuing boom in e-commerce and transported more than 766 million packages to end customers across Europe – 15% more than in 2016. Around 80% of this volume can be attributed to retailers and third party clients outside of the Otto Group, whose volumes increased by around 17%. Essential to this were significant investments in services and infrastructure.

“In the parcel business, Hermes was able to expand its market-leading position in Germany, the UK and France. Hermes also continues to lead the two-man handling market in Germany (Hermes Einrichtungs Service) and France (Girard Agediss). Indeed, in Germany, Hermes boasts a 70% market share within the large-item segment.”

The corporate statement said that Hermes Germany remains on a “clear course for growth” and is “equipping itself with modern infrastructure for growth”.

“In 2017 alone,” said Hermes, “within the framework of a €300m investment program, four state-of-the-art logistics centres were put into operation, including those in Berlin and Bad Rappenau. By 2020, five more new buildings will follow in metropolitan areas such as Hamburg, Cologne and Leipzig/Halle. Parallel to this, in the medium-term Hermes is increasing the number of ParcelShops by 30% to 20,000 collection points. In this context, nation-wide collaborations are also planned with retail chains. As of May, Hermes parcels recipients will benefit from an improved personalised delivery service (WunschZustellung). Customer convenience will be further improved, by which means, in particular, the short-term redirecting of parcels, for example to a ParcelShop or to a neighbour, will be simplified.

“Further services, including a digital delivery notice, will follow.

“In addition to this, in 2018 Hermes will introduce shorter delivery time windows, which will allow the arrival of a package to be accurately forecast to up to 30 to 60 minutes. This will be made possible by means of a new, fully digital route planning system, which Hermes will introduce nationwide. Customer journeys will thus become even more efficient and the carbon emissions per parcel will again be reduced.

Hermes Germany has also been ramping up its environmental credentials.

According to the corporate statement: “Under the project name “Urban Blue”, Hermes Germany is promoting a nationwide programme for the reduction of emissions and traffic. Central to this is a strategic co-operation with Mercedes-Benz Vans which was concluded in May 2017. In this context, by 2020 up to 1,500 electric delivery vehicles will be put in operation. The first pilot vehicles will start in the coming weeks in Hamburg and other places. The partnership with Mercedes-Benz Vans is to be supplemented by numerous further collaborations and projects, specifically also involving cargo bikes, e-scooters and other alternative delivery methods. In terms of the required nation-wide establishment of a charging infrastructure, Hermes will also rely on partnerships.

“Innovative city logistics solutions are also the focus of the same day delivery specialist, Liefery, in which Hermes has been the majority shareholder since March 2017. Liefery, together with Daimler subsidiary Smart, is currently testing parcel deliveries in car boots in the city of Hamburg. Further cities could follow. Also in metropolitan regions, including in Hamburg and Berlin, Liefery might additionally significantly intensify the collaboration with the food supplier, HelloFresh, as an established player in the food delivery market.”

Turning to its UK parcel operations, Hermes said it “again recorded significant achievements in 2017 with annual volumes up 16.5%, exceeding industry growth”.

The company continued: “Particularly strong growth was achieved in next-day-delivery operations (+22%), in ParcelShop deliveries (+25%), and in the development of international parcel operations (+15%). Innovative and digital services also saw significant growth, as Hermes became the first UK parcel company to fully integrate its end-to-end tracking solution with Amazon Alexa and Google Home smart speakers.

“In 2017, Hermes UK also launched a Pay and Print in-store solution, enabling customers to book and pay for deliveries in a ParcelShop for the first time and helping Hermes ParcelShops to achieve a 7-point increase in its NPS score. In addition, Hermes opened the UK’s largest automated parcel distribution hub at Rugby, which is the second largest logistics hub in Europe. Offering deliveries 7 days a week and with a ParcelShop network now totalling more than 4,500 collection points, Hermes’ UK parcel operations will continue to roll out its Digital Futures strategy throughout 2018 to place the customer experience at its heart with updates including a new app, website, safe place photo and geo-fencing capabilities.”