BRS/Exel cut costs merger to and jobs
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by Amanda Bradbury and Karen Miles • NFC is warning of large-scale redundancies in managerial staff following a cost-cutting merger of the UK's single biggest haulier, Exel Logistics, with BRS.
But NFC's new chief executive Peter Sherlock has ruled out driver redundancies—the two companies employ nearly 7,000 drivers out of 18,000 staff.
Senior management will start work on the new division, UK Transport and Logistics 4 October. According to NFC the merger creates a profitable organisation that holds 17% of the UK transport and logistics market.
The move is expected to save millions of pounds, mainly from reduced administration, tendering and marketing costs. The organisation had a combined turnover of £.863m for the first three quarters of the year; the merger is designed to enhance its competitiveness.
Financial results published last week show both BRS and Exel Logistics start from a strong base with increased profit in the UK this year. Exel increased its operating profit by 38% to £46.5m with sales up by 21% compared with last year. BRS profits rose by 43% to £25.2m with a 4% increase in turnover. As a whole, NFC's revenue for the period rose by 11% to £1.4bn.
NFC says the merger is a response to market demands for tight margin control. It will end an increasing overlap in the two companies' target markets. In the past contracts have been won and lost between them—BRS made drivers redundant in April when a contract with computer manufacturer ICL was taken over by Exel—and both companies are present in the automotive distribution sector.
Sherlock says immediate priorities for the merged company include reassessing asset and operations infrastructure; customer service; vehicle usage and purchasing; and controlling costs more effectively.