Seven contractors cut
Page 6
If you've noticed an error in this article please click here to report it so we can fix it.
by Amanda Bradbury • Kellogg's is cutting the number of contractors on its multi-million pound direct delivery work from 10 to three in order to cut costs "significantly" and take direct control of lead times. With 250,000 tonnes of product moved a year, the company is among the top 20 biggest UK grocery distributors: all transport requirements are contracted out.
Direct delivery, with a full load to one destination, makes up the majority of Kellogg's work. The three successful contractors—Russell Davies Distribution, Exel Logistics and Manchester-based Aliens Transport Services— have agreed not to press for a rates rise in return for additional volumes.
The trio, asked to tender with the others on price and quality, get a "fairly equal" third of the work: • Aliens will at least double its turnover with the manufacturer: adding Lim to its Xelm current sales and nine vehicles to its fleet; • Exel already had the largest chunk of the work, but says the new deal, now worth ,E2m a year, is a "major gain in a key account for parent NFC". There will only be a small increase in its 23-strong Kellogg's fleet, due to tighter cost control, with 33 drivers working to double shifts.
• Russell Davies Distribution will more than double drivers and vehicles on Kellogg's work to 18 day drivers and eight night drivers and 18 vehicles by September.