On track for further expansion Hermes gains market share and bolsters its core business in Europe

The Hermes Group closed the 2016 financial year on yet another positive note and was able in particular to gain market share in its parcel and bulky goods segment. The Hamburg-based trading and logistics provider grew its revenue in the 2016 financial year by over seven percent to 2.640 billion euros

Parcel delivery in Hamburg (Photo: Hermes)

The Hermes Group closed the 2016 financial year on yet another positive note and was able in particular to gain market share in its parcel and bulky goods segment. The Hamburg-based trading and logistics provider grew its revenue in the 2016 financial year – adjusted for currency translation effects – by over seven percent to 2.640 billion euros (2015: 2.460 billion euros). Instrumental in this was again the Group’s European parcel companies which, benefiting from flourishing global online retailing, transported about 640 million parcels to private customers, a rise of ten percent year on year. The Group’s 2-man handling unit, delivering furniture and furnishings, also gained significantly with volumes growing by more than six percent. The integration of the French parcel shippers Mondial Relay and the acquisition last year of 2-man handling specialist Girard Agediss enabled Hermes to improve its competitive position in key European markets. Worldwide, Hermes currently employs 12,618 people, 8,500 (FTEs) alone in Germany.

“We are delighted we closed 2016 on a positive note. This has once again helped us consolidate our strong position in a highly dynamic and – in many respects – challenging market. As the logistics and service partner for many successful online shops and multichannel retailers at home and abroad, Hermes is continuing to participate in the ongoing boom in global online retailing”, explains Donald Pilz, CEO of Hermes Europe since March 2016. “With an eye on further growth potential, in 2017 we will be continuing the on-going modernisation and expansion of our logistics infrastructure and investing in new technologies. On top of this, we are expanding in new customer-centric services and are targeting the expansion of our successful commitment in promising business segments such as parcel and 2-man handling, not least through the integration of French activities.” Since January 2017, Mondial Relay and Girard Agediss (formerly 3SI) have been part of the Hermes group of companies, and thus also the Otto Group.

Growing core business in Europe

Hermes parcel companies in Germany, Austria, the UK, Italy and Russia delivered a record 640 million parcels to its customers in Europe. This represents an increase of ten percent in parcels, catalogues and other goods compared to the prior year (2015: 580 million). Around 75 percent of shipment traffic resulted from business with clients outside the Otto Group.

“The steady increase in volumes and revenues in the CEP sector should not detract from the fact that the sector in under enormous price and cost pressure. The individualisation of delivery processes and rising costs of vehicles, couriers and technical infrastructure signify an increasing ecological and economic challenge for the whole parcel distribution. There needs to be greater awareness from politicians, business people and consumers to be able to shape not only the growth in retailing, but also discerning customer needs, for everyone involved in the delivery process,” demands Donald Pilz.

The financial results of Mondial Relay will be fully consolidated for the first time in 2017. Headquartered in Lille, the company currently operates four hubs and 24 depots in France and also operates in Belgium, Luxembourg, Spain and Portugal. With its 600 employees, Mondial Relay processed 57 million consignments in 2016. In Germany, Hermes was once again able to enhance its position as quality and market leader in the 2-man handling sector, transporting over five million items of furniture and bulky appliances. Hermes Einrichtungs Service’s prosperous business is now to be given a further international boost through its cooperation with Girard Agediss.

Investments in locations and vehicle fleets in Germany

On its domestic market, Hermes is preparing to continue its infrastructure developments across the whole 2C parcel market (B2C and C2C). Three new Hermes Logistics Centres will be opened in Bad Rappenau, Mainz and Berlin in the course of 2017. These were earmarked in 2014 and planned as part of a 300 million euro investment programme. By the end of 2019, a total of nine state-of-the-art logistics centres are to be build, all designed in line with strict environmental protection guidelines. These new Hermes Germany sites will ensure that the steady growth in consignment volumes can be efficiently processed in the future, that clients can inject volumes into the Hermes system much later and that deliveries can be made much quicker thanks to shorter feed times.

In addition, Hermes is investing in modernising and electrifying is fleet of vehicles and has agreed a comprehensive strategic partnership with Mercedes-Benz. This year, the Group is looking to push ahead with the deployment of EURO-6 delivery vans, including them in its own fleets and those of its contracting partners. From 2018, Hermes companies are looking to test the deployment of electric vehicles in operations, initially in Stuttgart and Hamburg. And by 2020, Hermes Germany is aiming to deploy 1,500 Mercedes-Benz Vito and Sprinter vehicles in conurbation areas around the whole country. Hermes is thus placing clear focus on expanding ‘smart’ urban logistics in metropolitan areas, where today discussions abound on restricting vehicle access.
The strategy also includes tests with Starship delivery robots in Hamburg and London, the majority holding in Liefery – the market leader for same-day deliveries in Germany – and promoting innovative delivery concepts. “Given our current investments, shareholdings and sponsored projects, we are in a good position to be able to deal with the future interests of our customers and are committed to advancing our sustainability efforts,” says Donald Pilz.

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