As part of its new profit improvement plan, TNT Express will sell its Chinese and Brazilian domestic operations, ramp up technology investment and strive to generate 220 million euros ($283 million) in savings by 2015.
Officials expect to cut 4,000 jobs over the next three years and spend 150 million euros on restructuring costs by 2015 to achieve these goals.
Bernard Bot, TNT’s interim chief executive officer, will collaborate with his proposed successor, Tex Gunning, on the "Deliver!" platform. The two will make use of TNT’s extensive European network and worldwide connections to confront a sluggish European economy and other industry challenges.
"Successful execution will be critical to improving our performance. We are, therefore, taking immediate steps to reshape our portfolio, make the company leaner and pursue efficiencies in operational and supporting processes,” Bot said in a statement. ”We are also investing in our infrastructure to increase productivity and in IT solutions to better serve our customers.
The Deliver! improvement program we are launching will create a more focused, efficient and profitable TNT Express.”
These changes need to be made moving forward, officials argue, because the economic climate is still uncertain. The sale of its Chinese portfolio is underway, and preparations are already being made to unload Brazil. To further reduce its exposure to capacity between continents, officials are looking at leases and capacity-sharing agreements.
To hit its savings goals of 220 millon euros, company officials will streamline support functions, optimize infrastructure and create shared-service centers for administrative tasks. A new management structure will also help improve things, according to a press release, by enhancing direct reporting to the CEO and unwinding the previous regional structure.
As part of the new look at TNT, officials are planning to invest 200 million euros in automation and network optimization.
This proposal is seen as a bit of a restart for TNT Express, which was dealt a big blow in January when the European Union officially blocked a proposed merger between UPS and TNT. In its ruling, the commission said the deal would reduce the number of small-package players in a host of member states, with DHL being the only non-UPS option in some areas, leading more easily to price increases. Even with UPS agreeing to sell off parts of TNT in the countries at question, the commission found that it was not enough to save the merger.
In the fourth quarter of 2012, TNT showed a 0.5-percent, year-over-year decline in revenue to 1.86 billion euros. The firm’s operating income loss hit 71 million euros. TNT’s overall loss for the quarter stood at 148 million euros, a 14.5-percent year-over-year improvement. - Jon Ross