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Logistics industry in UK

Hausarbeit 2005 43 Seiten

BWL - Beschaffung, Produktion, Logistik



Exel UK Operations

Volume of Trade (graph)

Organisational Structure (+ & -)

Economies of Scale & Minimum Efficient Scale

Performance Indicators

Prices in Monopoly (graph)

Exel Strategy

Major products & services

Presence across diverse Industries

Opportunities & Threats Analysis


Top competitors

Market segmentation & Analysis

Target Marketing Strategy

Competition & Buying Patterns

Porters 5 forces & response strategies

Pricing Strategy

Sales Strategy

Competitor Analysis & its Components

Strategy & Target Markets

Strategies for Competitive Advantage

Strategy Clock (graph)




Appendix (including Social, Ethical & History)

Competitor Analysis of capability profiles (table)



Exel is a logistics company that provides supply chain services. Exel offers freight management, supply chain management and solution designs, technological solutions, warehousing and distribution services. The company has freight management and a contract logistics operation worldwide with its headquarter in Berkshire, UK. For the fiscal year ended December 2004, Exel generated revenues of £5,541.9 million, an increase of 9.3% from the previous fiscal year. Net income for the year was reported at £66.2 million, a decrease of 32% from the previous year. (Analyzed further)

Exel UK Operations

Exel in the United Kingdom is ideally positioned to provide the most efficient and effective supply chain solutions to its customers across key industries. With over 50 years experience in the UK market, Exel's innovative supply chain solutions move beyond traditional logistics and transportation services.

Key facts about Exel in the United Kingdom:

- 51,700 employees
- 600 locations
- 7,700 vehicles
- 57.6 million sq ft warehouse capacity including dedicated and shared-user.

As a founding member of the World Economic Forum's Logistics and Transportation Corporate Citizenship Initiative (L&TCCI), Exel has been an active participant since its inception in January 2003. Exel is a supply chain management company for customers in a range of manufacturing and retail industries. Exel’s range of logistics solutions encompasses the complete supply chain management from design and consulting through to freight forwarding, warehousing and distribution services, integrated information management and eCommerce support. The company offers a variety of online services, including booking and ordering facilities, shipment tracking, and pricing indices. Exel provides services to the automotive, chemical, consumer, energy, healthcare, industrial, drinks, retail and technology sectors. It has divisions that deal with special products, value added services, IT solutions, global freight management and clinical trials logistics, among others. Exel also offers reverse logistics solutions including product removal, return for refurbishment, recycling, compliant and safe disposal of products.

Volume of trade adapted from Excel Home website

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Source: Compiled from Morais, R. (2002), Keeffe, M., Fearne, A. (2002)

Table 1 – Structure Pluses and Minuses

The business of Logistics involves large fixed costs (capital input in land, property and other setup costs). Thus the long-run average cost curve is more U-shaped with a high Minimum Efficient scale (MES) [Begg, p66]. Since the market is in maturity and highly concentrated, it can be assumed that market leaders such as TNT with high revenue and a large number of operations operates at the MES, but Exel with smaller sales in some services and less inventory( specifically in market segments excluding UK & US) may be operating below this level and therefore not fully exploiting Economies of Scale. Economies of scale are generally increased by larger sales volume, more efficient distribution reducing distribution costs or buying in larger quantities from suppliers bringing supplier discounts. Exels structure works against it consolidating or expanding as fast as some other competitors and its services may be less efficient ( outside UK & US ) than that of TNT ( particularly larger vehicle fleet ) therefore not bringing in similar discounts in costs. Both these factors lead to higher average costs.

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However Exel is able to combat its disadvantage of higher average operating costs by operating on a differentiated strategy. It competes on quality and service levels rather than price and is able to charge premium price for its services. ( excluding US & UK )

When compared to another rival competing on quality such as TNT, Exel net profit per employee in 2003 was much lower. Again this has to be contributed to employee structure of the firm which increases staff costs.

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Source: FAME database University ofGlasgow Library

Performance Indicators of TNT and DHL

Many of the legislation key issues related to these services offered are linked with ensuring the competitive nature of the market under growing fears of the market moving towards a monopoly. In a monopoly the only competitor in the market would have no incentive to operate at MES and improve productivity. In fact it may reduce services, causing the demand to be greater than supply of services and thus increase prices.

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Competitive markets ensure that rivals try to improve productivity in order to bring costs down thus making most efficient use of the economy’s resources such as labor. It also leads to reduction in prices and rewards customers with wider choice and higher quality. Some of the key legislations affecting Logistics in UK are the policies of OECD­­1, TRILOG­­2 & DG TREN3

Government EXIM policy & understanding with different states within the country also affects firms. Normally a firm’s pricing strategy depends on internal coherence, i.e. setting service price respecting constraints of costs and profitability, and external coherence, i.e. setting the price keeping in mind market’s purchasing power and price of competing services [Lambin p515]. Pricing therefore depends on cost structures, demand and competition.

As seen earlier, Exels cost structure would be higher than that of market leaders (in some segments). In order for it to at least break-even, its services will also need to be priced higher. While a firm would like to set a target price based purely on cost, it must take into account price sensitivity or price elasticity of demand.

Exel Strategy

Exel has a clear, customer-focused strategy that continues to provide competitive advantage enabling us to address our customers supply chain challenges with our expertise and solutions.

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for the year was reported Adapted from Exel Home website

The four cornerstones of this strategy (global coverage and local strength, integrated capability and breadth of solutions, consistent processes and occupational excellence, skilled people and supply chain expertise) closely match the growth market in which they operate.

Being a global company with best services and a clear mission—to create new value in the supply chain for our customers, employees and shareholders. Our strategy and business model makes us ideally positioned to develop within the logistics marketplace, meeting the customers' needs with innovative solutions that bring together the best of its people, processes and core capabilities. ( Exel Home website)

The company has a number of subsidiaries specializing in providing logistics services for different industries. These include Marken Time Critical Express, an international express courier business servicing customers in the medical, pharmaceutical, media, professional, fashion and high technology industries. It operates through a worldwide network of offices specializing in fulfilling the exacting requirements of specific industries. Another company subsidiary, Mercury, specializes in the processing and distribution of printed matter offering a full range of services for the international distribution of all classes of mail. These include mailing streams, enclosing, airfreight, transportation, storage pick and pack, copy reproduction, wrapping and fulfillment. Power Europe offers logistics services for consumer goods. Its clients include Unilever ice creams and frozen food, Tesco, J. Sainsbury and Lever Faberge. Exel offers specialized services in the packing waste compliance sector through Packaging Datastore.

Higgs International provides a range of distribution services for newspaper and magazine publishers, mainly in the UK and Belgium. It also distributes worldwide via international airfreight, offering packing and consolidation services, dedicated road and air transport solutions, subscription packing, express services and export sales management services Trade team, a beverage logistics provider, offers shared-user logistics and distribution services for customers including brewers, brand owners and independent pub companies.

MSAS provides solutions from single shipments to complex multi-location logistics programs. It has developed a range of global logistics and transportation services including airfreight, sea freight and customs brokerage to meet the growing needs of supply chains in industry. MSAS North American Logistics is a domestic airfreight forwarder, providing time critical transportation services, mainly in the US. Exel has freight management and contract logistics operations across the world.



ISBN (eBook)
558 KB
Institution / Hochschule
University of Glasgow
B 1
Logistics Business



Titel: Logistics industry in UK