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DHL beats rivals to secure B&Q Contract

DHL has emerged triumphant from B&Q's distribution shake-up, signing a multi-million-pound two-year logistics contract with the DIY giant following an eight-way competitive tender.

DHL Supply Chain will manage the majority of the retail giant's warehousing and distribution from February 2012.

The win comes after B&Q announced plans in June to review its entire distribution strategy, a move which will see it exit several UK sites and replace them with a new £77.4m Swindon DC.

As a result, some 1,000 jobs at DHL, Kuehne + Nagel and Wincanton were put at risk.

Consultations are still ongoing at B&Q sites currently run by Wincanton in Coventry, Manchester, Milton Keynes and the existing site in Swindon, as well as Kuehne + Nagel sites at Preston Brook and Chepstow.

The deal will result in DHL handling one million cases per week at the new Swindon DC. It will receive and distribute stock to stores in the region as well as manage B&Q's Preston Brook, Cheshire RDC where it will deliver some 250 store loads every week. The award of the contract will also safeguard operations in Worksop, Notts and Radlett, Herts.

A total of 550 jobs will be created at the new DC, while 150 of 615 jobs at Preston Brook will be safeguarded from 2012.

At the current Swindon DC there are 125 Wincanton employees. B&Q previously said it hoped all would transfer to the new facility, which will become operational in summer 2011.

Jon Wood, vice president of non food retail at DHL, says: "We're delighted to have secured this landmark contract with B&Q, which takes our 20-year partnership to a new level. Under the new agreement we are looking forward to using our expertise to create synergies and remove cost from B&Q's value chain."

B&Q says the new DC will bring products closer to store, "therefore improving customer service, as well as reducing transport miles, transport costs and CO2 emissions".

Source : Joanna Bourke - Road

08 November 2010
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