City Link cuts losses

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Express operator City Link reduced its operating loss for the first half to £4.7m - that is £2.3m lower than in 2009 on sales that remained unchanged at £167.1m.

The carrier, which is part of Rentokil Initial plc, said volumes rose four per cent but the market remained extremely competitive and price cutting had continued across the industry in the first half. Revenue per consignment weakened by 4.3 per cent on 2009.

City Link has closed seven depots during the period, to make a total of 77, and is positioned to operate a regional hub network centred on Coventry in the second half.

It has opened of three depots in Heathrow, Warrington and Peterborough which also act as regional hubs. The Wednesbury hub closed in late July, completing the transition from a hard sided to a curtain sided trailer fleet.

Distribution costs were £4.6m higher than in 2009 in part due to an increase in volume and sub-optimal route planning resulting in high sub-contractor costs.

It plans to improve routeing efficiency in the second half as a result of its restructuring work. It is also is recruiting more employed and owner drivers and reducing ad hoc sub-contractors.