DHL Supply Chain has been awarded a contract worth £500m ($816 million) across five years to manage the UK warehousing and distribution for Iceland Foods LTD. Iceland has been supported by DHL through steady growth over the last four years and as a result DHL will service a further 70 stores as the company’s expansion continues in the coming year.
The new stores will be serviced by Iceland’s existing network of distribution centers and DHL will be responsible for ensuring that the sites are able to manage the increased volume while maintaining service levels. As the majority of new stores will be based in the South of England, DHL will also manage the re-allocation of existing stores to alternative distribution centers within the network.
DHL reports that over the last two years it has saved Iceland over £4m ($6.5 million) in operating costs and is set to save a further £3m ($4.9 million) in the coming year. These savings are being achieved through improvements in warehouse productivity, planning, geographical store delivery rationalization and fuel efficiency initiatives, says DHL.
“DHL have proved over the last three years that they are capable of responding to the needs of the Iceland business,: said John Mackie Supply Chain Director for Iceland. “They have driven cost savings whilst significantly improving service to our stores. As a customer our demands are extremely high; the DHL team have responded to these challenges and delivered excellent results. Awarding this five year extended deal shows the confidence we have in the DHL team. We look forward to continuing to work in partnership to drive further cost savings and again improve service''.
“We were originally appointed by Iceland in 2005 to manage just two of its four distribution centers,” said Chris Sharp, MD of Food Retail for DHL Supply Chain UK & Ireland. “Within a year those centers had become the highest performing in terms of costs and service levels. As a result we were invited to take on management of the remaining two. We’re really proud of what we have achieved and it’s a testament to our commitment and high standards that we are continuing to support Iceland through the next five years”