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Logistics – Toll looks to take on Australia Post in parcel delivery market: Strategy

Toll to challenge Australia Post in parcel deliveries

By Cara Waters
Monday, 29 October 2012

Transport and logistics firm Toll is squaring up for a fight with Australia Post to take a greater share of the parcel delivery business.


At Toll’s annual general meeting on Friday the logistics giant said it would be increasing the size of its Toll Consumer Delivery business, which at the moment has relatively small operations.


Managing director Brian Kruger said the size of the parcel delivery market in Australia was worth around $550 million this year and Toll currently holds around 6% to 7% of the market.


“Many of you would know that this is a rapidly growing market here in Australia and it’s one where we are well positioned to create significant value,” Kruger told the AGM.


After the meeting, Kruger told reporters Australia Post has “the lion's share” of the parcel delivery market but Toll’s goal is grow its share “very quickly.”


He said the market had grown by around 25% to 30% over the past few years as consumers bought more goods over the internet.


Kruger said Toll hoped to distinguish its service from that of Australia Post's by emphasising Toll's rate of successful delivery, which he said was over 90%.


“Our strategy is really all about a successful delivery to the consumer, using technology and our network to provide flexibility in terms of the date, time and place of delivery,” Kruger told the AGM.


The investment required from Toll to increase its parcel delivery service would not be too significant as Toll already has an extensive network of depots and a pick-up-and-delivery fleet that handles business-to-business freight.


The biggest investment, which would cost around $10 million, would be for technology, such as hand-held information devices for drivers, to run the business.


Kruger said Toll would be able to achieve high margins on every extra piece of freight.


The managing director was also asked by shareholders at the meeting about the donkey romp scandal which engulfed the company earlier this year.


Kruger said wearing the apron was ''inappropriate'' and there had been ''a very thorough investigation” into the scandal.


''The people involved have had disciplinary action.


''I think both the investigation and result of surveys convinced me that this isn't an issue endemic to Toll.''


This story first appeared on SmartCompany.

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