In pursuit of ‘efficiency’ News Corp. has invited expressions of interest from parties interested in pitching for secondary distribution business. That is, providing one delivery point for News for small geographic areas for further distribution to retailers and home delivery customers.
This has elements of T2020 and some elements of a UK wholesaler model.
This from the News Corp. pitch doc sent last week:
BRIEFING DOCUMENT NEWS CORP SECONDARY DISTRIBUTION – MARCH 2018
Currently News Corp (“News”) meets consumer demand for print media via a large network of distribution partners (“Distributors”) servicing small geographic areas. News delivers newspapers (and other promotional items from time to time) to these Distributors from our print site. These Distributors provide the distribution of newspapers to subscriber’s homes and workplaces, delivery to retailers for retail sales and delivery to other commercial partners such as Airlines, Hotels and other businesses in bulk form. Some of these Distributors also manage directly the relationship with some retailers and subscribers. Collectively this service is known internally as “Secondary Distribution”.
The media landscape is continuously evolving and the current Secondary Distribution operating model has challenges for both News and our Distributors.
Our intent is to review our Secondary Distribution model to determine the right, fit for purpose and sustainable model that offers News a cost-effective solution, data integrity in the network whilst ensuring a network that is viable for our Distributors.
OBJECTIVE
The objective of this market engagement is to explore and identify interested parties and potential solutions or
alternate options that will support a sustainable distribution mechanism to the subscribers in NSW for the next five years.
The key objectives of this process are to :-
- Deliver a commercial model that is agile, efficient and sustainable for News and its Distributors.
- Provide News with transparency of data in the end to end process including sub agent data and where applicable subscribers.
SCOPE
We are inviting you to propose for consideration by us how you or your organisation would provide a service that
meets our requirements for all or part of the coverage areas listed in the attachments provided with the RFI document, specifically outlining your approach, any indicative pricing, details of technology solutions and what further information you would require to enable you to participate in a formal RFP process (should we proceed).
We also understand that any solution must be viable for the Distributor and we would ask you to propose a contract term to support investment in technology, systems and infrastructure required to support any new model.
We would encourage greenfield thinking for both the operating and commercial model.
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HIGH LEVEL REQUIREMENTS
Your submission should consider that secondary distribution is for all News paid publications. Primarily, The Daily Telegraph and The Australian, as a stand alone solution and does not rely on or include publications from other publishers.
However we do understand and accept scale is a key driver of efficiency and therefore News would consider industry collaboration where practical.
Regions for consideration have been split as: Sydney Metropolitan area and the major regional centres of Wollongong, Newcastle, The Central Coast, Blue Mountains and
region could
Current volumes, estimated arrival time to nominated drop points and postcodes in each region will be provided to those who complete the initial expression of interest.
RETAIL DELIVERIES
Minimum requirements are as follows for Retail Deliveries and Home Deliveries but we would encourage alternate solutions that may be more cost effective, agile and sustainable in the long term without affecting the customer experience.
You will be required to provide a delivery service to both Direct retailers and Indirect retailers 7 days per week, ideally before 6.30 am.
Where there are substantial efficiencies from later delivery times or prioritising 24 hour retail outlets, these should be provided for consideration.
You should have the capability to provide data by each retail outlet; sales and unsold copies by title by day. News may also require evidence of unsold copies which may include preparation for collection if required and auditing by a News authorised representative.
Indirect retailers – these are retailers that you will have the commercial relationship with whereby you will manage copy allocation and be responsible for the financial relationship.
Direct retailers – these are retailers that you will deliver a predetermined quantity on behalf of News and News manage the financial relationship.
HOME DELIVERIES
Home delivery copies will need to be presented in a format that is acceptable to News and subscribers. (Currently the product is rolled and wrapped but we encourage alternatives to traditional wrapping that may produce a more cost effective alternative or a more desirable product presentation to the subscribers.)
You will be required to provide delivery service of newspapers up to 7 days per week to a nominated delivery point for a subscriber ideally before 6.30 am but we would like to understand the cost implications of alternate delivery times.
Canberra. Subject to proposed solutions, each be broken up further into a number of geographic zones if this delivered a more sustainable network.
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Have the ability to stop and start the delivery of home deliveries as directed by News and have the ability to implement customer changes in a timely manner (ie within 24 hours of being advised by News).
Provide an issue resolution contact and process to ensure issues can be actioned on the delivery day.
THE COMMERCIAL MODEL
We would encourage your thoughts on proposing a commercial model that explores possible differing service levels or alternate scenarios which may vary from the stated high level requirements – yet deliver a more cost effective outcome.
OTHER CONSIDERATIONS
Any proposed solution must have the following as minimum standards:
- Proven capability in distribution and logistics management
- Delivery reporting and data transparency with DIFOT a key metric
- The ability to measure and manage delivery issues via a structured issue resolution process
- A technology solution and infrastructure to enable seamless and timely data flows to and from News at customer and retailer level
There will be a shortage of idiots willing to invest to meet High Level Requirements.
The Commercial Model and Other Considerations are the real point of the exercise. A clarion call for likes of Toll or Australia Post or DHL to tear up the current system.
This proposal appears to be aimed at NSW distribution .
It’s important to understand that the NSW model is NOT used Australia wide, SA distribution evolved many years ago.
It appears that what News are doing is issuing a Blank sheet of paper to all and sundries to see what they get back.
They can then cut and paste the best to suit them, which may include the current newsagent after all there are contracts even if they can be dissolved on a voluntary basis.It is obvious that the current system is not profitable for the newsagent in most cases as they are ‘handing back the distribution’ The “call” to arms may mean that DHL A.Post etc could be a contender. How does the S.A. contract work as far as time and terms?
I should have mentioned that there may be opportunities here for some agents that have large delieveries or small ones that don’t have great shop traffic, to expand the distribution and therefore increase their revenue. The main thing will be to express an interest so that more detail can be considered. It will be interesting