UTi Worldwide Looks to Cut Costs
UTi Worldwide looks to cut costs after it lowered its profit estimate for the year. As part of their cost cutting efforts, the company plans to:
1. Exit the company’s retail distribution business in Africa.
2. Exit the the surface distribution operation of its Integrated logistics business in the Americas, and other selected non-core underperforming operations.
3. Cancel various long-term initiatives, such as the development of certain industry verticals.
4. Scale back airfreight charters, which will allow the company to better leverage overall air volumes and improve yields.
5. Exit loss-making contracts.
6. Realign corporate and regional functions to reduce overhead costs and increase focus and accountability of the company’s leadership team around the performance of its core service lines.
I have also read that the company, which also lost a major contract with Wal Mart last year, plans to reduce its global workforce by 7 percent under the cost saving initiatives.
Having worked in this industry for quite sometime now, I have come to realize that this is a very cyclical industry tied directly to the global economy. 3PL companies tend to expand and contract as the economy grows and slows. I wouldn’t be surprised to hear other companies launch cost savings initiatives in the near future to combat the downturn in the global economy.
Source – UTi Worldwide
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