Efficiency is the watchword as group invests in equipment, facilities and IT
Investment in technology to improve efficiency and safety in the face of changing market demands was a key message managing director Brian Kruger brought to Toll’s annual general meeting.
In a detailed address to shareholders in of what has been a “tough start to the year” for the group as a whole, Kruger relates how initiatives including new equipment, modern warehousing and improved IT and personal technology were at the heart the company’s response to shifting business conditions.
The need for such a response was illustrated in the global express division, where, domestically, Toll IPEC and Toll Fast had experienced “flat volumes and lower average consignment weights” leading to lower productivity and therefore margins.
“The key drivers of the lower consignment weights have been the increase in business-to-consumer volumes, as well as the impact of general customer down-trading,” Kruger says.
“Moving a larger number of consignments for no more overall weight obviously has an impact on productivity and margins.”
This was estimated to have cost Toll Global Express a 0.5 per cent fall in domestic business.
The group was tackling the trend with new express parcel facilities built at Bungarribee in Sydney and being built at Tullamarine in Melbourne.
The $170 million Bungarribee depot “has a parcel sorting capacity of 35,000 parcels an hour – that’s more than three times the previous capacity”, Kruger says.
They are joined by the $80 million Toll NQX site at Queensland’s Karawatha opened in May that he describes as “the largest pallet and oversize freight depot we operate anywhere in the world” and one that “enables us to load multiple outbound services simultaneously”.
The $30 million Gap Ridge hub in Karratha and the $24 million Brighton hub outside Hobart were also mentioned.
On the road equipment front, along with the fleet of BA triple tankers unveiled earlier this month Toll has also introduced Super B-doubles into Singapore.
This was a first for an island country which is to host Toll City, a 100,000 square metre, five-level, ramp-up warehouse as part of “Toll’s wider Asian strategy to develop and attract high-margin accounts in the retail, consumer and healthcare sectors”.
With driver safety in mind, there had been investment in alertness technology and driver training simulators.
In business IT, the common online freight tracking platform for customers was underway as was rationalisation of the groups 76 websites into one.
Meanwhile, chairman Ray Horsburgh revealed this would be his last his last term on the group’s board but went on to emphasise cultural change underway in the firm, particularly regarding gender issues.
Though women in senior management fell from 13 per cent to 11 per cent, even as men in senior ranks fell by double that rate, the group’s ability to field two female candidates for senior vacancies improved.
“We had at least two female candidates for 55 per cent of our senior management roles and at least one candidate for 80 per cent of our senior management vacancies,” Horsburgh says.