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TZ Limited Signs Trial Agreement With Toll Group

TZ Limited (ASX: TZL) is closer towards its goal of participating as a provider in the lucrative online logistics market after reaching an agreement with Toll Group (ASX:TOL) to trial its Automated Delivery Asset Manager (A.D.A.M.) locker system.

Under the agreement, Australia's largest logistics provider will trial the lockers as part of its specialised online B2C retail parcel delivery service, Toll Consumer Delivery.

Should the trial succeed, Toll will look to add the A.D.A.M. Parcel Locker service to its already-extensive collection network, which includes the Nparcel newsagency parcel collection service.

While Nparcel has already helped deliver tens of thousands of parcels since September last year, A.D.A.M. has the potential to extend that, providing even more convenient, local and accessible pick up points for parcels delivered.

The trial follows on the company's efforts to build an infrastructure solution that allows it to participate as a provider in the lucrative online logistics market that is developing off the back of the growth of online purchasing.

It has announced a number of initiatives including commercial relationships that enable access for TZ Locker infrastructure at various locations around Australia.

Partnership agreements that establish flow and revenue for the locker network, and of course, continued development of the TZ technology and software that enables an integrated end-to-end parcel locker solution have also been reached.

This includes reaching deals in March with a major petrol station franchisee in Victoria as well as Australia's largest independent and fully integrated oil company.

The 12 month teaming agreements are with AA Holdings Pty Limited, owner and operator of over 50 BP petrol stations in Victoria and Australian Fuel Distributors Pty Limited (AusFuel) who have over 80 Gull petrol stations across Western Australia, South Australia, Queensland and the Northern Territory.

These collectively potentially provide TZ with access to over 130 petrol station and convenience store sites across Australia, providing it with a big foot into the door with site owners, who not only want foot traffic generated by the A.D.A.M. locker system, but are "agnostic" as to who delivers to them.

A.D.A.M. locker system

The A.D.A.M. locker system provides a flexible delivery solution to benefit online retailers, logistics providers and customers alike as online purchasing continues to grow.

From May, there will be a total of six initial high traffic and high visibility sites located in Sydney (2 sites), Melbourne (2 sites), Brisbane (1 site) and Perth (1 site) under the initial A.D.A.M. locker system deployment.

The six site locations are still being finalised.

Analysis

The trial with Toll Group further builds on TZ's first mover advantage in building an integrated secure parcel locker business.

It also builds on the distribution element of the business, which together with the "footprint", hold the key to its success.

The deal meets TZL's objective of adding as many interconnecting locker sites in as many locations as it can across Australia, allowing consumers a wide array and choice of geographic locations where they can collect their online purchases.

It will provide consumers with an alternative to Australia Post by offering an 'agnostic' product for online shoppers that can deliver goods from many different courier companies.

Momentum is with TZL, as its locker system stands to benefit online retailers, logistics providers and customers alike. We view the announcement as overall value accretive and would not be surprised to see further trials and contract wins ahead.

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