Paperlinx has continued its cost-cutting drive by signing a strategic partnership that could potentially lead to the sale of its UK logistics arm.
A statement announced that the UK offices of Paperlinx and DHL had "identified a number of common strategic initiatives, capable of driving value for both organisations through close collaboration".
However, Paperlinx chief executive Andrew Price stressed that no final decisions had been made on what form the strategic partnership would take or when any measures would be implemented.
He said the partnership was currently focused on developing a five-year logistics plan that would aim to reduce costs and provide more operational flexibility.
"What we’re stating is our intention to work with DHL at a strategic level to identify ways to deliver our products better, faster, cheaper to our customers," said Price.
"Right now, all we’re doing to is setting up the ground rules to enable both companies to work closely on what that solution will look like. We’re approaching this with a completely open mind."
[Interview: Price's mission to save Paperlinx]
Price said that one outcome of the partnership could be DHL taking over customer deliveries, provided it met his "better, faster, cheaper" criteria.
"But the only thing we’re sure of at this stage is that we don’t know what a paper merchant will look like in five years' time. All we do know is that the most successful merchants won’t look like they do now," he said.
"We all have to change; we’ve got changing customer needs and a changing market."
It’s understood that the partnership could extend to inbound deliveries to Paperlinx, possibly including deliveries from Asia. Stock strategy, network integration and procurement will also be under the microscope.
Paperlinx has yet to reveal if the DHL partnership would be limited to the UK or be rolled out globally.
[Related: Paperlinx reports $90m loss]
Meanwhile, Paperlinx's long-running battle in Australia with a group of investor critics has taken another twist.
Five hybrid security holders put forth a resolution to change the hybrids constitution as a way to protect their investment. However, the entity responsible for the hybrids, The Trust Company, announced that the five critics have withdrawn their resolution and replaced it with a new one.
The new resolution would still strip Paperlinx of the power to determine how the hybrid securities are realised and hand it to the hybrid investors.
The resolution needs to be approved by both the hybrid investors and Paperlinx. The merchant announced in a statement that it opposed the proposed constitutional change.
"This series of proposed amendments from a minority group of hybrid unit holders continues to incur costs for, and disruption to, the trust and the company," according to Paperlinx.
"Furthermore, these proposed amendments do not offer constructive solutions to the issues facing the trust and the company and demonstrate the complexity and lack of understanding surrounding the relationship between the hybrids and Paperlinx.
"The company’s offer to hybrid unit holders seeks to address this complexity, whereas the new resolution creates further confusion for all Paperlinx stakeholders."
[Related: Ups and downs of Paperlinx]
This article was based on an article that originally appeared at printweek.com
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