Wednesday, December 14, 2016

DHL Freight Looks at Closing UK Operations with Possible Mass Redundancies

Consultation to Decide Future After a Decade of Losses
Shipping News Feature
UK – According to trade union GMB, logistics firm DHL Freight UK has announced a period of consultation with a view to close its UK operations due to continued losses in profits. The proposed move could lead to the loss of 520 jobs, and the closure of its depots at Aberdeen, Bellshill, Newcastle, Warrington, Wakefield, Coalville, Norwich, Andover, Bristol, and Exeter.

In a note to employees, DHL explained that a number of factors led to the company failing to make a profit for 10 years which include stagnating volumes and poor quality revenue, all exacerbated by very low peak volume. Sites in Cardiff and Hemel Hempstead have closed in the last few months, and Exeter partially closed during the recent period too, all of which has already resulted in the loss of nearly 100 jobs, says GMB.

GMB says that DHL Freight UK has admitted to the trade union that implementing restructuring has not delivered the expected results. Mick Rix, GMB National Officer, said:

"This announcement is a kick in the teeth to the loyal, hard-working and highly trained workforce across the DHL Freight UK network. The constant false hopes, tinkering and change in direction of the business has contributed to the lack of customer confidence, which in turn has led to a loss of business.

“DHL Freight UK has made this announcement two weeks before Christmas and the festive period. I am sure most staff will not thank the company for the worst Christmas present ever. It appears that the UK management team has given up on this business and its employees. The GMB Union will work hard, to ensure our members are treated with the respect they deserve, and if the business cannot be saved, jobs are found for the highly trained and skilled workforce."

In a letter published on GMB’s website supposedly from DHL Freight UK addressed to all of its employees. The following letter reads verbatim:

"As you are aware, the business has not been in a profit making position since 2006. This has been due to a number of factors, such as, increased competition in the market place which has led to customer churn and the fact that we have not been able to fill our network with profitable business.

"This has led to a significant decline, particularly in the last three years. To address this a country wide strategic review of the DHL Freight UK operations has taken place and it has been identified that we need to make fundamental changes to our UK Operation. Part of these changes could involve synergies with DHL Supply Chain, and it is proposed to realign and integrate some of our current service offerings to mitigate further financial losses and leverage support from the wider DPDHL Group.

"The services which we believe would be compatible with the Supply Chain business include Gerlach, Euroline, BMW and Euro Connect and the potential transfer of some domestic customers. However, further assessment on the viability of this proposal will need to be considered and shall form, together with the remaining proposals, part of the collective consultation process.

"Unfortunately, we do not believe that these synergies extend to domestic Terminal Based Operations and associated overheads. Therefore, we are proposing changes which involve a restructuring of the UK Business, in particular, ceasing to operate unprofitable service offerings. In addition, there may also be some proposed outsourcing of services/products to external parties. We propose to investigate further with Supply Chain and other DPDHL Divisions to mitigate some of the impact these proposals bring, should they proceed. As part of this announcement, it is to inform you that we are commencing collective consultation with all Freight UK employees over the potential redundancy and TUPE situation based on the business proposals outlined today.

"We will consult fully with the Trade Union and Management (via elected Reps) and will also undertake individual consultation with all employees. It is important to highlight that no decisions have been taken at this stage and the aim of the consultation process is to consider your views in order to reach agreement on the business proposals. The business is fully committed to considering any counter proposals or suggestions that you or your Trade Union may have.

"During the course of the consultation process, viability assessments may be conducted in order to test whether potential proposals or counter-proposals are workable. If, despite consultation, the proposals do proceed then there would be a full review of all opportunities within DPDHL that could mitigate potential redundancies through redeployment and TUPE transfers either internally or to third parties if applicable/possible.

Next Steps:

  • Collective Consultation has commenced with the GMB Trade Union today, the 8th December 2016, for a 90 day period and in line with the collective agreement
  • Management Consultation: In order to collectively consult with our Management Colleagues, we will shortly be sending out further communication, including the election process of Management Representatives. We will also consult with our Management population who are outside of the collective agreement, for a 90 day period, commencing today the 8th December 2016.
  • Individual Consultation: As part of our consultation process we will be organising individual one to one’s with all colleagues and these will commence in the New Year.

"We fully appreciate this is a very challenging and difficult time for everyone in Freight UK and we are totally committed to providing regular communications throughout this period to ensure you are kept up-to-date and involved in the process."

DHL has form in this sort of process, as of course do many large multinational organisations. When we wrote a piece some years ago regarding the company investing in a new US depot in Cincinnati/Northern Kentucky airport we were forced to close our readers comments section due to the number of abusive emails from ex DHL staff disenfranchised by the prior closure of its Wilmington facility, something those ex staff affected saw as a cost cutting measure by stealth.

In the past few years DHL has often come in for criticism of its employment practices, something the company has often vowed to put right, leading to yet more criticism earlier this year, but the real problem with this latest announcement is a concern that one of the world’s leading logistics groups has found itself unable to compete at a local level in the UK in the general freight sector.

Photo: DHL Bellshill may be a victim of forthcoming changes.