For the first time in its corporate history, Hermes posted revenues of over two billion euros for the 2013 financial year. In doing so, the Hamburg-based company continued its growth path of previous years into a tenth successive year. With its twelve subsidiaries providing retail-related and logistics services, Hermes grew total revenues by 8 percent to 2,083 million euros, up on the 1,928 million euros in 2012. They largely came from European parcel delivery services, which, with 496 million shipments, were about 10 percent higher than in the previous year. On the highly competitive German market, Hermes is now driving forward increased cooperation between market participants in the interests of the consumer. The positive trend was accompanied by 700 new jobs. Hermes now employs 11,814 permanent employees in over 20 countries.
"We installed our own logistics delivery systems in the countries with the largest share of the European E-commerce market a number of years ago. Consequently we are now profiting from double-digit growth rates in the UK in terms of both sales and shipping volumes, for example," explains Hanjo Schneider, Member of the Executive Board of the Otto Group and CEO of Hermes Europe. "The future of the parcel delivery business lies in internationalisation; at the end of the day, retailers want to sell their goods worldwide. As a result, we are strengthening our presence in the smaller EU countries, where we are cooperating closely with the leading parcel services in the respective national markets and integrating their networks into our organisation."
As a globally unique company, Hermes offers all services along the retail supply chain under a single umbrella brand. Retail companies of any size can transfer all the required services to Hermes, starting with sourcing goods in Asia which was again highly used in 2013, and quality testing, through to delivery to final customers in Europe.
Parcel division: Significant growth in the core business
The Hermes parcel businesses in Germany, the UK, Austria, Italy and Russia transported more than 492 million consignments – parcels, catalogues and the like up roughly 9 percent on the previous year (452 million).
The parcel sector alone delivered more than 477 million shipments, an increase of 14.5 percent in comparison with the 417 million of 2012. Around 70 percent of shipment traffic resulted from business with clients outside the Otto Group.
In addition, Hermes built on its position as market and quality leader in 2-man handling of end customer deliveries with around 3.9 million items of furniture and electrical appliances shipped.
Deliveries in Germany
Thanks to the sustained e-commerce boom the parcel business will also continue to grow in Germany. Consequently, Hermes is readying itself for increasing shipment figures and growing customer demand in respect of parcel services. In the current year the company is commencing roll-out of its time-band delivery service. This service will involve informing customers that their parcels will be delivered in a defined time band the next day.
"Bearing in mind the growing service demands and the known economic and environmental challenges, parcel delivery services should be looking at ways to enhance cooperation. More shared transport and greater networking initiatives are in the interest of the industry, while customers will benefit from joint solutions, too. We are fully prepared to enter into dialogue and welcome various forms of cooperation”, states Hanjo Schneider.
Growth in the European parcel market
As in the previous year, the fastest growing Hermes company was Hermes UK, also recognized for its sustainable success with the National Business Award 2013. With investment of around 30 million euros in its logistics infrastructure plus the planned 5,000 drop-off/collection points of the comprehensive Hermes ParcelShop network, the company remains focussed on growth.
As a whole, Hermes is planning to further significantly expand its European parcel business. In particular, expansion into smaller EU states and cross-border shipment are to be optimised in 2014 through cooperation with national delivery partners. It is precisely this sector where large distance sellers expect one-stop, customer-focussed delivery. Moreover, by the end of 2014, there will be a total of 36,000 ParcelShops in Europe available as an alternative delivery option for Hermes customers.
Internationalisation stepped up
To be able to offer customers an ever more comprehensive range of services, Hermes is continually expanding its global presence. In November 2013, the company opened its latest and largest quality assurance and certification laboratory, outside of Europe in Shanghai. Here, Asian finished consumer goods intended for the European market are tested by Hermes Hansecontrol. In 2014, the testing market in India is also to be opened up through a joint-venture. This will offer retailers both professional product testing and consultancy services.
In addition, Hermes is pushing ahead with enhancements to its global sea and air freight services: besides its traditional focus on sourcing logistics in Asia, the company manages transports to and from the US, Brazil and South Africa and now has an international network in over 20 countries outside Europe. Also, when it comes to web enabling, Hermes is consistently following a strategy of opening up trade in new markets. Having launched the first Lascana online shop in China in 2013, Hermes NexTec is looking to launch further web shops in China for new clients in 2014.