Posti and SOL have established a joint venture providing in-house logistics services, Flexo Palvelut Oy. The Finnish Competition and Consumer Authority approved the joint venture with which Posti seeks strategic growth in in-house logistics. Posti estimates that Flexo will create 300 new jobs this year.
In April, Posti Group Corporation and Solemo Oy (SOL) signed an agreement on establishing a joint venture. The Finnish Competition and Consumer Authority approved the corporate transaction on April 25, 2017.
- Flexo aims to achieve a leading market position in the in-house logistics market. Two leading Finnish experts in their fields now join forces. Posti has strong professional competence in logistics and in combining information and material flows, and SOL is highly regarded family business with a successful track record in HR administration and service management, emphasises Jukka Rosenberg, Senior Vice President, Parcel and Logistics Services at Posti.
In-house logistics refers to providing outsourced logistics services on customers' premises, using their processes and systems. Typical tasks include, for instance, reception, picking, handling and combining of goods in warehouses and terminals. In-house logistics in industrial production includes packaging and sending.
- We are service management professionals and it is great to be involved in the development of operating models for in-house logistics in the new joint venture. This adds a whole new dimension to our long-term cooperation. As recruitment professionals, we ensure that our joint venture has the best talents, says SOL Palvelut's CEO Juhapekka Joronen.
According to Rosenberg, it is a natural step for Posti to expand to the in-house logistics market. In Europe, the corporate logistics outsourcing rate is approximately 40%, whereas in Finland, it is only roughly 12%. The logistics outsourcing rate is rising. Typically, warehousing accounts for 30% of the overall logistics costs of companies, transport for 30% and in-house logistics (i.e. handling at different phases of the supply chain) for 30%.
Posti estimates that the Finnish in-house logistics market is worth approximately EUR 350 million and its annual growth rate is up to 30%.
Flexo will be a nationwide provider of in-house logistics services and also a major employer. The goal is that the new company will provide more than 300 new jobs by the end of the year. Within a few years, there are more than a thousand people in the company.
Handling operations carried out in Posti's own warehouses are among the largest in-house logistics entities in Finland. Flexo serves as a way for Posti to rearrange this work that is now partly conducted through outsourcing.
According to Rosenberg, growth expectations are increasing due to the structural change taking place in trade, requiring new kinds of logistics arrangements. The growth of e-commerce and related volume fluctuations require flexible resources. Rosenberg says that many of Posti's current customers have inquired from Posti whether it could also offer in-house logistics services.
- We have extremely skilled and competent personnel serving our customers in logistics services in Posti's premises. The professional competence of our personnel has convinced our customers time and again and we are proud that with this joint venture we can now expand our services to customers' premises, too.