Mercedes contracts out Third party is • As predicted (CM 24-30
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Oct 1991), Mercedes-Benz (UK) has contracted out its entire car and commercial vehicle parts distribution operation.
About 30% of the work was already entrusted to third-party operations run by TNT, Salvesen and BRS; now Transport Development Group subsidiary Inter-City Transport and its sister company Firth Distribution will also be involved.
Mercedes-Benz has shed 26 own-account drivers in the process — 17 have agreed to join the contractors, three have been relocated at Mercedes and three have opted for early retirement.
Inter-City Transport takes over Scotland from Christian Salvesen; Firth Distribution, which specialises in the Irish market, takes on Northern Ireland. Inter-City will move parts from Milton Keynes to its Cumbernauld operations centre for transshipment to Scotland. Northern Ireland and Carlisle will be served from the Tebay depot in Cumbria, Salvesen will handle distribution in the North of England, taking over from MercedesBenz's direct operation. TNT Contract Distribution continues to service offshore islands and remote dealerships.
BRS takes over the Midlands from Mercedes and extends its South-West coverage to take in a new route running from Yeovil to Weymouth. • Third-party distribution is on the increase, according to a survey by job agency Manpower. Contracting out distribution is listed as the second most popular form of contracting out after facility management.
The survey was carried out with the British Institute of Management. It reveals that companies are more Likely to be influenced by a guaranteed quality of service than by the lowest bid, with the distribution operation becoming a partnership between the haulier and customer.
"This doesn't mean less driving jobs, but the work will switch to specialist companies," says Manpower chairman Lillian Bennett. "It is the more responsible firms that are contracting out and they like to ensure the drivers that move receive terms of employment as good as their own."
The survey also revealed that 50% of employers forecast job increases over the next four years, but 30% expect cuts.
In the past seven years 88% of companies surveyed had carried out a restructuring exercise leading to job cuts at all levels.