To sign up for Analytiqa's free weekly newsletter, please enter your details below.
Analytiqa will not share this information with third parties.
Focus on omnichannel logistics services, urban logistics
FM Logistic has launched its new strategy ‘Powering 2030’. The strategy is designed to address profound changes in the retail industry and supply chain management, as consumers spend more online. FM Logistic aims to double its revenue to €3.0 billion in 2030 by focusing on omnichannel supply chain services, urban logistics, sustainability, transport and customer experience. The Company also expects to raise its EBIT margin from 2.8% to 4.0%.
COVID-19 has given a boost to omnichannel commerce, a multichannel approach to sales that focuses on providing seamless customer experience whether the client is shopping online from a mobile device, a laptop or in a brick-and-mortar store.
Online retail sales in France will reach €130.0 billion in 2021, up 15.0% from 2020. Global online retail sales are forecast to reach USD$.4 trillion in 2024, up 26.0% from 2020.
The pandemic and the strong economic rebound have highlighted the crucial role played by logistics as well as the frailties of international supply chains, such as the over dependence on too few manufacturers, jammed ports and a shortage in truck drivers. Solving these challenges calls for more coordination and cooperation.
Sustainable development is both a global challenge and a prerequisite for signing new contracts, operating in cities and hiring new employees.
The 9-year strategic plan puts customer experience and sustainability at the core of everything FM do. This will be supported by investments in automation and the roll-out of additional services, such as automated pick-up points. It will also continue to explore solutions to environmental challenges, with the opening of green hydrogen stations at some of its logistics platforms.
FM Logistic’s revenue increased organically by 10.0% (excluding FX) in the first half of fiscal year 2021/22 (April-Sept. 2021). The Company won new contracts worth €166.0 million, more than in the entire fiscal year 2019/20 before the pandemic. Close to 60.0% of these new contracts are for omnichannel logistics services.
In October 2021, the French cosmetics brand Yves Rocher awarded FM Logistic a contract for the order fulfilment and distribution of its products to retail stores and individual consumers in Poland and Hungary. FM Logistic has also expanded its eCommerce logistics contract with the German DIY retailer Bauhaus. In France, FM Logistic has won a contract from Maxi Zoo, a leading pet food retailer to manage e-commerce order fulfilment and distribution to 263 stores across the country.
To strengthen its omnichannel fulfilment capacity, FM Logistic will further expand its network of large multi-client warehouses. The Company will open a new logistics centre in Wiskitki, Poland, in 2022. It will be located only 10 km from the future Solidarity Transport Hub (CPK). A new fulfilment centre will enter operations in Tolbino, near Moscow, in April.
In addition, FM Logistic will be investing in automation to support its eCommerce operations. The investment will include additional automated sorters, on-demand packaging machines that produce the right size box for any order, ’goods to person’ picking systems and automated guided vehicles (AGVs) for moving pallets insides warehouses.
At the same time, FM Logistic is continuing to invest in its last-mile logistics infrastructure in selected cities, such as Paris, Madrid, Barcelona, Warsaw and Moscow.
In October 2021, FM Logistic’s subsidiary CITYlogin and Madrid’s Municipal Transport Company (EMT) opened a micro-fulfilment centre in the underground parking garage below Plaza Mayor, the Spanish capital’s main square. The 200 m2 facility enables CITYlogin to deliver consumer items in the city centre within 30 minutes to two hours. CITYlogin is using 10 electric three-wheelers from Scoobic, a Spanish company, to transport the parcels.
In France, FM Logistic is aiming for 60.0% revenue growth in the urban logistics segment by 2023. On 25 November 2021, FM Logistic and Unibail-Rodamco-Westfield opened a versatile automated pick-up point at the Westfield commercial centre in Vélizy-Villacoublay, south of Paris. Unlike parcel pick up stations, it enables customers to collect fresh food, frozen food, parcels and bulky items (such as skis or a bicycle) in one go. The service is available 24/7. It provides a click and collect solution for retailer chains (Auchan is one of the first users), as well as small, independent stores. FM Logistic will open a similar pick-up point in Paris in Q1, 2022.
FM Logistic’s sustainability strategy revolves around three priorities: employee wellbeing, the environment and eco-efficient services. Several new initiatives are underway.
FM Logistic, the University of Technology of Compiègne (UTC) and Hublex, a French start-up, have signed an agreement for the series production of the Ergoskel, an ergoskeleton designed and patented by FM Logistic and UTC in 2019. The Ergoskel will be manufactured in France. Production and commercialisation will start in Q1, 2022. FM Logistic aims to equip 50 warehouse pickers and packers in Q1,2022 and 600 by the end of 2023.
In the environmental area, FM Logistic is targeting carbon neutrality for all its warehouses by 2030. The Company is planning to produce green hydrogen from the solar energy generated at its logistics facilities. In Q1, 2022, FM Logistic will inaugurate a first green hydrogen station at its warehouse in Illescas, Spain. It has a capacity of 45kg of hydrogen per week. The hydrogen will fuel forklifts and a delivery van. The initiative is receiving support from the European Regional Development Fund (ERDF). IFM Logistic and Bouygues Energies et Services have teamed up to install an electrolyser in the Loiret region of France in 2022. It will have a capacity of up to 800 kilos of green hydrogen a day. The hydrogen will be partly used by the city of Orléans.
Transport stands for 36.0% of FM Logistic’s revenues globally and close to one half in Central Europe and Russia. FM Logistic aims to sell more transport services to its warehousing customers. The goal is to provide customers with a comprehensive service along the supply chain of eCommerce. To that end, the Company will be investing both in its physical network (fleet, cross-docking sites) and IT systems.
In September 2021, FM Logistic started operating more than 20 heavy duty trucks running on Oleo 100, a French-made biofuel. The expected CO2 reduction on the selected routes is 65.0% compared with the diesel models used previously.