XPO Logistics has been awarded a contract to manage frozen food retailer Iceland Foods’s supply chain and a reverse logistics contract by Aldi, a discount supermarket chain based in Germany.
XPO Logistics on Tuesday provided additional details about its huge contact win with Iceland Foods in the United Kingdom.
As reported last month by American Shipper, XPO landed a $600 million contract over five years with the frozen food retailer. The contract is the largest ever for XPO and bigger than any contract received by the logistics arms of Con-way Inc. and Norbert Dentressangle (ND) of France – both of which it acquired last year.
Iceland Foods operates 850 stores and several warehouse outlets throughout the UK, with plans to open up to 40 more stores this year.
Under the outsourced logistics arrangement, XPO will take control of Iceland’s dedicated distribution centers, as well as its workforce, in Warrington, Enfield, Livingston and Swindon. Iceland’s 1,900 workers at the four sites will become XPO employees. XPO will also provide Iceland with storage capacity at its shared facilities during peak season or other periods when volumes surge.
In addition, XPO will manage Iceland’s temperature-controlled fleet of 320 tractors and 450 trailers and said it expects to create further operational efficiencies by leveraging supplier relationships to improve the efficiency of inbound shipments to DCs.
Earlier this month, XPO announced a second contact win in the supermarket space.
Aldi, a discount supermarket chain based in Germany, awarded XPO a multi-million pound contract to wash and repair reusable transit packaging from its UK stores. XPO will process about 22 million Aldi plastic crates (beverage trays, universal display pallets, potato shippers, and fresh produce and meat shipping containers) per year. Consolidated items will be washed, inspected and returned back into the supply chain. XPO says it will generate efficiencies by combining volumes at five shared XPO logistics facilities.
Contract logistics gains helped XPO achieve better-than-expected operating income of $217 million in the fourth quarter of 2015, helping to hold down overall losses from one-time acquisition expenses to $63 million.
XPO officials also say they recently secured contracts from Swatch for trucking service and Matchfusion.com, as well as a multi-pound contract renewal from General Motors in the UK.
The UK was the largest contributor to growth for XPO Logistics Europe in 2015, with revenues rising 15.9 percent from the previous year. XPO Logistics Europe, the successor to ND, experienced a 2.6 percent increase in sales within its transport business unit and a 10.1 percent increase in sales for its supply chain unit.
“As well as impressive business wins at the end of last year, we have a strong pipeline with eCommerce in particular driving growth. We have also enjoyed sustained momentum with great levels of customer retention and contract renewals,” Richard Cawston, managing director supply chain for UK and Ireland, said in a statement. “In 2016, we will look at expanding our range of transport services by piloting last mile deliveries for heavy goods, which will also be trialed in Spain, highlighting the value-added synergies we can now provide as part of XPO Logistics.”
XPO grows logistics business in UK
