The continuing problems in the magazine distribution contract in NSW and Victoria being run by the First Fleet company, has claimed a major casualty with the head of Network Services, the distribution arm of Kerry Packer’s ACP Magazines, resigning this week. Phillip Parsons had been the head of Network for the past five years.
His resignation was announced in a memo to staff Thursday by Michael Mangan, the Chief Information Officer of ACP. At the same time the distribution arrangement that saw Network and Gordon and Gotch push all their magazines through First Fleet in Sydney and Melbourne is all but over. It’s taken around two years for the deal, named Project Hero at ACP, to fall apart because of continuing inefficiencies.
The whole aim of the First Fleet deal back in 2003 was to out-source the magazine distribution in the two biggest markets: NSW and Victoria.
Instead of cutting costs and boosting profit margins, it has been plagued with rising costs, poor distribution, lost sales for the two biggest clients – ACP and Pacific Publications, irate newsagents and huge losses. Multi-million dollar sorting and packaging machines installed in Sydney and Melbourne haven’t worked properly and rising fuel costs in the past year have hurt First Fleet and its contractors on top of the other problems.
Now Gordon and Gotch and Network are virtually taking back the distribution, packing and ancillary work and using First Fleet as a middleman.
Phillip Parsons is the second senior executive to go. The head of Gordon and Gotch, the magazine distribution arm of PMP, resigned in May in a re-organisation driven by then PMP CEO, David Kirk.
But Gordon and Gotch continues to lose business. One of its bigger contracts, the distribution of The Trading Post, owned by Sensis, is moving to RDS, part of NDD, which is owned by IPMG, part of the privately-held Hannan family media interest in Sydney. That will be a big blow to Gotch and it comes as The Trading Post is suffering from declining sales, due to a poor understanding of the nature of newspaper distribution. Sales in some Sydney city news agencies have fallen by a third to half in recent months.