Billion-dollar defence deal, structural reorganisation for Toll

Greg Combet, Minister for Defence Personnel, Materiel and Science, has announced that the Toll Group’s Toll Transitions Pty Ltd has been selected as the preferred tenderer for the provision of removal and relocation administration services to Australian Defence Force (ADF) members.
 
Defence currently relocates around 23,000 ADF members and their families each year as part of the military posting cycle, Mr Combet said.
 
This new contract is also important to Defence as it combines two previous contracts into one. This streamlined approach allows ADF members further convenience and less red tape when they are required to move.
 
To assist ADF members and their families throughout this process, the new contract for the first time will provide one contact point for both removal and relocation services.
 
The contract will be the largest removal contract in Australia and involves locations all around the country, including regional and remote areas.
 
Industries such as removalists, accommodation providers and airlines will benefit from this contract through sub-contracting arrangements. A significant number of these businesses are likely to be small to medium enterprises, Mr Combet said.
 
The contract is for 5 years with the option for four, one-year extensions at the discretion of Defence and dependent on performance. The total cost of both removal and relocation components is more than $1 billion for the first five years.
 
Defence expects to sign the contract with Toll once the contractual issues are finalised. The removal and relocation contract will commence on 1 July 2010.
 
“We are pleased to announce that Toll Transitions, the Toll Group’s specialist relocations business, has been notified they have successfully tendered for the contract with the Department of Defence for the provision of both Removal Services (RS) and Relocation Administration Services (RAS),” said Toll Group Managing Director, Paul Little.
 
“The initial five year period is expected to generate revenues of more than $1 billion, and if the extensions are granted total revenue of around $2 billion would be expected.” Mr Little said.
 
Removal services involves the movement of the personal and household effects of Defence members. Relocation Administration Services co-ordinate the Defence members’ relocations, including flights, temporary accommodation, allowances and reimbursements. The RAS works closely with the RS on the removals component of the task.
 
“For the past 10 years Toll has provided Removal Services to the Australian Department of Defence. The inclusion of Relocation Administration Services into the contract is a significant addition and a further testament to the professionalism of the Toll Transitions team.
 
 “The Tender win will entail substantial growth and opportunities for Toll Transitions with over 100 additional staff being recruited and a number of new offices being established around the country.” Mr Little said.
 
Structural reorganisation
 
Independently of the Defence contract, the Toll Group has undertaken a significant structural and personnel reorganisation that will formally come into effect on 1 January
2010.
 
The reorganisation is aimed at assisting the Toll Group to become a global organisation and focus on international growth. Its aims are:
  • Developing the Global Express freight service throughout the Asia Pacific region.
  • Building on the existing customer base in Australia and New Zealand.
  • Enhancing cross-selling throughout the group.
  • Providing origin and destination support to Toll Global Forwarding.
  • Establishing career paths and succession planning to ensure the company’s growth momentum continues in a logical manner.
Toll’s chief operating officer, John Ludeke, has decided to retire from Toll at the end of  the current financial year.
 
Toll Global Express
 
The new Global Express division will group the express businesses of Toll IPEC, Toll Priority and Toll Fast, along with Toll Personnel and Toll Stream Solutions under the leadership of Shane O’Neill who will be divisional director, Global Express.
 
Toll Domestic Forwarding
 
The new Domestic Forwarding division will group the Toll SPD, Toll QRX, Toll Shipping Toll Tasmania, Toll Edwards and Toll New Zealand businesses together and will be managed by Paul Ebsworth as divisional director Domestic Forwarding.
 
Toll Specialised & Domestic Freight
 
The Specialised & Domestic Freight division will group together the businesses of Toll Express, Toll Linehaul, Westrans, NQX, Perkins, Toll Liquids, Toll Fleet, Toll Chemicals and Toll Transitions under the leadership of Mal Grimmond as divisional director, Specialised & Domestic Freight.

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