Reverse logistics is a hot topic as suppliers and retailers seek to become more consumer-centric. MHD talks to Ben Franzi of Australia Post and Jason Bush of Toll Group on this crucial element in supply chain management.
LOGOS has built a strong reputation for its logistics property developments over the past decade. MHD talks with two of its Australian leaders about its success, industry trends, and what investors and tenants want in a new era for logistics and supply chain facilities.
Toll Group has thrown further support to expanding existing containerised freight routes.
Toll Group has been hit by a suspected cyber security breach, causing a shutdown on a number of the company’s IT systems.
Logistics giant Toll group has joined twelve other international freight stakeholders on the latest Australian airport freight precinct project.
LOGOS has exchanged contracts to acquire a 15.3-hectare infill development site in Villawood, Sydney from Toll Group, including a partial sale and leaseback agreement. The acquisition is due to settle in late 2019.
Located at 246 Miller Road, Villawood, the property has good access to Sydney’s key transport network, with five freeway entry points within 10km and existing entry to the South Sydney freight railway line.
The acquisition includes a partial leaseback to Toll over a portion of the site, with LOGOS to undertake upgrading works across the existing facilities. LOGOS plans to redevelop the remaining 11.3 hectares of the site into a logistics and intermodal estate on a speculative basis with an estimated on completion value of circa $200 million.
LOGOS’ head of Australia and New Zealand Darren Searle said: “The Villawood property acquisition is a new strategic infill development opportunity that will greatly benefit both intermodal and logistics operators.
“To capitalise on the property’s strategic location and the future infrastructure development in the area, we will look to develop intermodal and logistic facilities to service the strong demand we are seeing from our existing and new tenants in this area for modern, high quality facilities,” he said.
The NSW Government is investing circa $80 billion in infrastructure across western Sydney over the next four years, including the construction of the WestConnex and NorthConnex Motorways and upgrades to the area’s existing road systems under the $3.6 billion Western Sydney Infrastructure Plan.
The acquisition also strengthens LOGOS’ relationship with Toll, with the Group having developed three facilities for the global logistics provider.
Mr Searle added: “We are pleased to be working with Toll on this strategic acquisition and look forward to enhancing their existing facilities for them within this this key industrial market”.
Toll MD Michael Byrne.
Toll Group, a subsidiary of Japan Post, has reported earnings before interest and tax (EBIT) of $119 million for the year ended 31 March 2018, an improvement of over 70% on financial year 2017.
Today’s result is the first time in three years that Toll reports growth in profit and revenue.
Some impressive numbers:
- Revenue of $8.2 billion, up $309 million compared to last year.
- Global Logistics reported an EBIT of $191 million, up 13%, off the back of strong performances in Asia and in key segments in Australia including government and defence, mining, energy and retail.
- Global Express delivered a $59 million turnaround compared to last year’s result, driven by an improved operating cost structure from transformation activities in network consolidation and productivity.
- Global Forwarding returned to profit, delivering close to a $9 million improvement to EBIT, despite reduced margins. This was delivered through cost improvement initiatives, including exiting unprofitable countries, which have set the business up for future growth. Customer satisfaction reached record levels in FY18.
- A reduction of over 16% in total injuries in FY18 as a result of an increased focus and investment in this area, which the company says will continue to be a priority in the coming year.
- Delivery of 1,000 new fleet and equipment, part of a six-year, $1.6 billion asset investment program. A further 1,500 of the latest in fleet will be added to its network this year. The safety technology and fuel-efficiency of these assets is expected to create new possibilities for the network with improved safety and maintenance costs as well as reduced emissions.
- Close to $600 million investment in capital expenditure on fleet, vessels, infrastructure and technology, which resulted an overall negative cash outflow for the year.
Toll Group managing director Michael Byrne said the performance marks the successful execution of the first year of Toll’s transformation strategy.
“Having successfully delivered on the first year of our overall three year transformation program, we are a leaner business, creating more value for our customers. This turnaround has been driven by the 44,000 strong Toll team who have done an outstanding job of implementing this program of rapid and significant change,” Mr Byrne said.
“While Toll is much stronger than this time last year, we remain vigilant. Our transformation continues, and our results to date show that our strategy is the right one for today’s markets and the long-term opportunities ahead. We will continue to focus on delighting our customers, disciplined cash flow and being smarter with our costs.”
Transport and logistics company Toll Group has expanded its 2018 Graduate Program, broadening its scope for potential applicants to be based in Australia, Japan, New Zealand and Singapore.
According to Toll, the Graduate Program is designed to develop a pool of diverse future leaders across Toll Group and Japan Post, and is structured to give graduates exposure to the company’s three operating divisions: Global Logistics, Global Express and Global forwarding in order to gain a deep insight and understanding of the logistics industry during their tenure.
Ajay Gopal is a 2017 graduate and is currently on rotation at Toll City in Singapore.
“I was looking for an organisation that would provide a great amount of variety throughout its graduate program,” said Gopal.
“Starting my professional career on the right foot was important, and a vital part of that consists of being exposed to a vast array of roles in various sectors. The Toll graduate program has given me opportunity.”
The Graduate Program aims to target graduates with Logistics and Supply Chain, Business and Commerce, and STEM degrees who have recently graduated or are about to graduate, and who are fluent in a second language.
“Graduates gain exposure across our core operational business during their rotations, they get to see the end to end process and build their knowledge of how our sites operate from the ground up,” said Toll Graduate Program Manager, Sharon Abbott. “This is critical to develop them as our future leaders across the organisation.”
Western Australia–based company CTI Logistics has moved its Laverton North presence to a new 15,228sqm distribution centre in West Park Industrial Estate in Truganina, west of Melbourne.
The facility comprises a 14,758sqm warehouse and a 470sqm office.
The company’s warehouse was jointly developed alongside a new purpose-built distribution centre for tile and stone importer National Tiles. Frasers Property Australia, the property group behind the West Park Industrial Estate, reports that the combined end value of the facilities is $33.5 million.
Anthony Maugeri, General Manager – Southern Region, Frasers Property Australia, said: “This deal further supports our strategy to create prime A-grade speculative facilities in select undersupplied markets near major infrastructure nodes. We have a strong track record in leasing these types of buildings to blue-chip tenants on long-term leases.
“CTI has been in operation for over 40 years. The new facility will help the business service their growing customer base across Australia and will also offer significant operational efficiencies.”
Companies located in West Park Industrial Estate include CEVA Logistics, Schenker, Toll, Goodyear, Mitre 10 and Australia Post.
The Hon. Melinda Pavey, Minister for Roads, Maritime and Freight, New South Wales, has attended the official opening for Toll Group’s new distribution centre in Western Sydney, a facility the Australian logistics company claims is specially designed to support online retailing.
Pavey performed the ribbon cutting, alongside John Mullen, Chairman of Toll Group, and Alex Linton, General Manger – Logistics of Specialty Fashion Group, the new DC’s inaugural anchor tenant.
The $160 million “retail and e-commerce centre” is set across 32,000sqm, and incorporates 15,600sqm of automation equipment.
According to Toll, the facility is capable of picking, processing and packing 375,000 items per day, shortening delivery times “from days to hours.”
“Staying competitive in a rapidly changing global market requires vision, determination and an appetite for change, and that’s what Toll’s new facility will provide,” said Pavey.
Chris Pearce, Divisional Director – Toll Global Logistics, noted that today’s market is placing aggressive demands on retailers to provide fast fulfilment and delivery, while keeping costs down.
“Toll’s investment in the new facility is helping our customers adapt to the new retail environment,” he said. “The facility is equipped with $50 million in advanced automation technology so retails can deliver their e-commerce orders faster and in a much more economical way.
“This advanced technology will increase our productivity fivefold – capable of picking, processing and packing 70 million items per year.”
Specialty Fashion Group worked with Toll in the design of the facility, with scalability and future growth in mind.
“At Specialty Fashion Group, we’re constantly looking to improve the omni-channel experience for our customers,” said General Manager – Logistics, Linton. “We have a highly specialised supply chain, so we needed a customised solution that would meet our ongoing needs as a retailer.”
Automation of the facility will reportedly reduce manual handling by 70 per cent, expected to lead to a reduction in safety incidents.