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Toll facing lengthy three-year turnaround process

Embattled logistics powerhouse, Toll, is facing a painful three-year turnaround process, according to Chairman, John Mullen.

In his first public interview since Toll parent company, Japan Post, revealed that it would book a $US3.6 billion writedown on the Melbourne company, Mullen told The Australian that there are still “a lot of cultural and structural issues” to overcome to get Toll back to being a high-performing business.

Mullen, who took up his role in January at the same time that Japan Post appointed former Linfox executive Michael Byrne as Managing Director, said the company was facing a large-scale restructure, with the number of business units reduced from 24 to just 10.

According to The Australian’s Damon Kitney, he also revealed that Toll management was actively working on the sale or closure of a number of “poorly made and underperforming’’ acquisitions, particularly in the overseas freight forwarding business and in ¬Europe.

While Mullen admitted the writedown in April was a bigger-than-expected reality check, he also said work was now underway to turn the boat around.

“The core business of Toll is strong and we expect to see improvements each year from today, but anticipate that it will take three years to complete this turnaround,’’ he told The Australian.

He added a new deal Toll signed with Amazon will see Toll compete in the business-to-consumer space when the online giant comes to Australian in 2018, saying it was the first step of Toll facing the challenges of a changing marketplace.

“The issue is not so much the impact Amazon has on us, but the impact it will have on our customers. If they render the business model of some large retailers in Australia unworkable, if we are joined at the hip with them, then that is a challenge for us,’’ he said.

“We all need to realise the world is changing rapidly. A lot of older logistics companies are built around traditional distribution structures with large warehouses. We need to modernise that at Toll and be very nimble and ready to compete in the B to C market.’’

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