Solutions December/January 2017 by Linfox

Solutions

Linfox Solutions

Asia Pacific December/January 2017

An Australian icon for 60 years

Solutions

Asia Pa c ific D e c / J a n 2017

Contents FROM LINFOX LEADERS An Australian icon for 60 years Peter Fox

Investing in new thinking Annette Carey

Changing times Gabby Costigan

Future logistics: What lies ahead?

FEATURES Future logistics: What lies ahead?

Linfox sets its sights on the Mekong Delta

The demise of the internal combustion engine

Linfox flashback: Sydney Olympic Games

A 60 year legacy

Celebrating strong leadership in Asia

Linfox sets its sights on the Mekong Delta SPECIAL FEATURE

RESEARCH IN FOCUS Optimising transport solutions

Monash Smart Traffic Management Solution

NEWS 60 years on show: The past meets the future

A sustainability milestone

Linfox and DuluxGroup setting the standard

A 60 year legacy

LINFOX PEOPLE Journey to success: Attracting and nurturing Linfox people

Many roads lead to Linfox

Outfoxing in efficiency

60 years on show: The past meets the future

EXECUTIVE CHAIRMAN

An Australian icon for 60 years

Milestones provide a time to reflect and as we celebrate our 60th year, I am filled with pride when I think of what my family has built over the last six decades. Linfox is an icon and this is the result of hard work and dogged determination to succeed. When a customer chooses Linfox, they must be confident we can deliver. No compromises. As a kid I used to clean the truck wheels for pocket money using Silvo to keep them shiny. You could call it my first job at Linfox. The satisfaction of keeping a truck clean was immense. For me, it was an early lesson that attention to detail and a commitment to keeping our trucks in excellent condition would see us rewarded by the biggest brands with their business. Decades later I still see this commitment and attention to detail in Linfox as we adapt and lead a rapidly changing industry. Technology

continues to shape logistics and the supply chain industry. Itâ&#x20AC;&#x2122;s not the strongest of the species that survive nor the most intelligent, but the one most responsive to change. Itâ&#x20AC;&#x2122;s our commitment to continuous improvement and constant change that will assist us to lead. Recently we built on our longstanding relationship with Monash University with the launch of a multi-million dollar strategic partnership. This new partnership provides leadership and employee education. Our alliance will drive industry research, innovation and technological advances across the supply chain network.

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The partnership also provides access to Monash’s virtual reality tools, advanced analytics and systems modelling expertise to identify technological advances aimed at enhancing supply chain capability. Investing in technology and evolving what we do is important. But it’s not the only reason why we will continue to succeed. Customers vote with their feet and we consistently hear from them that they need genuine partners rather than suppliers. As in the early days, our ability to deliver this, right down to the small details, is being rewarded with more customers signing up for longer periods of time (Kellogg’s for 10 years, Arnott’s for eight years, Coles for five years). This is also underlined by our growing work with the Australian Defence Force.

Creating longer term customer tenure allows us to further invest in our people, ensuring all of our customers get the best from happy, healthy, safe people who genuinely care about and take pride in their work. The health of all our people is of paramount importance to us and dignity and pride will be forthcoming from them if the culture is one of ‘caring and sharing’. Our customers and our people are at the heart of our success and we look forward to the next 60 years with you all.

Peter Fox Executive Chairman

CEO AUSTRALIA NEW ZEALAND

Investing in new thinking Sixty years of continuous investment in new thinking has made Linfox an industry leader. We are relentless in our search for new ideas. Recently we spent time in Germany at the International Automobile Association (IAA) Trade Show and saw three clear trends: • C onnected and automated driving and the digital transformation of the logistics industry • I ncreasing use of alternative powertrains in commercial vehicles • U rban logistics making delivery in built-up environments more efficient and eco-friendly. Connected and automated driving can make us more efficient and even safer. It enables concepts like platooning – which can reduce fuel consumption and simultaneously improve road safety - possible. Connecting relevant information will also allow greater management of traffic and transport. This connectivity can also be harnessed to enhance safety through automatic uncoupling, steering axles, and tablet-controlled reversing – demonstrations of which were particularly impressive in the IAA live demonstrations. Our goal is to achieve incident free driving, already Linfox trucks have multiple ‘assistants’ to improve safety by

removing burdens from the driver to avoid incidents or reduce their severity. And these new technologies will no doubt play a role in making a safer future for our people and the public. Electric and hybrid drives are used not only in vans and buses, but will also ensure that consumption and CO2 emissions from heavy trucks are brought down even further. And alternative fuels such as natural gas also have the potential to reduce CO2 emissions from trucks. Our article on the future of logistics (page 8) provides a strong view as to where our industry is heading. We see a mix of engine types in the future. Diesel-powered vehicles will continue to play a key role in longdistance traffic but the latest exhaust after-treatment technology in the Euro 6 engine makes them not only efficient and economical, but also clean. Linfox has already trialed two LNG prime movers in its BOC fleet and, recognising that diesel engines will be a reality for some time in Australia, we’ve been steadily reducing our fleet’s emissions, our latest step being the introduction of Euro 6 trucks from next year (read more on page 28).

‘Last mile’ delivery is often discussed in our industry with the growth of online and personalised shopping. What’s forgotten is that future urban logistics must be both faster, sympathetic to the built up nature of city and urban environments and ideally with zero emissions. On this point I am pleased to announce that Linfox has achieved a 51.2 per cent emission intensity reduction based on 2006/7 levels. This is a result of significant investment in sustainable programs and initiatives through the Green Fox sustainability program. We will continue to reduce emissions and improve energy efficiency through adoption of new technologies, renewable fuels, energy efficient lighting and solar energy. Sixty years on from founder Lindsay Fox’s first flatbed truck, Linfox has come a long way. We continue to invest in technology and new ideas. As we cap off our 60th year, it’s this pursuit of new thinking that will ensure another successful 60 years of Linfox.

Annette Carey CEO Australia and New Zealand

CEO LINFOX INTERNATIONAL GROUP

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Changing times During my three years in Thailand, I’ve grown fond of this country and its people. I was therefore very saddened to learn of the death of the King Bhumibol, who reigned in Thailand for 70 years. The King was deeply revered by the people of Thailand and respected around the world. During his reign, the country grew from a population of 20 million to more than 67 million and benefitted from extraordinary economic and social progress. Linfox has operated in Thailand for 15 years and together with all our people across Asia, we share the grief of the Thai people. We extend our sincere condolences to the nation and the Royal Family. Continued growth Linfox continues to expand in Asia and as the ASEAN Economic Community (AEC) grows stronger, we have set our sights on emerging markets in the Mekong Delta region. We are committed to growing with our customers and believe that the economic development of three emerging economies, Laos, Myanmar and Cambodia provides an opportunity to achieve this.

Importantly, the establishment of the AEC in 2015 will see new trade corridors created, increased connectivity and more open crossborder networks.

One of my proudest achievements is the significant change to our corporate culture, from one of centralised authority to an inclusive, team-based environment.

Linfox Asia has been slowly building its presence in this region, having partnered with Phu Bia Mining, the Lao-registered subsidiary of Australian copper and gold producer PanAust Ltd, since 2014.

This has been driven by strategically delegating tasks to local teams and empowering our 13-strong leadership team to enable their success.

Our continued growth in Laos and expansion into Cambodia and Myanmar represents a natural expansion for Linfox, leveraging our expertise and established operations in the Asia Pacific (read more on page12). A great honour I was recently honoured to be named a finalist in the Telstra Business Women’s Awards in the Asia category. As Australia’s longest running business women’s award program, it was an enormous privilege to be recognised among such an outstanding group of driven and inspirational women. Importantly, the process provided opportunity to reflect on my journey since taking on the CEO Linfox International Group role in 2014.

Creating self-sufficient teams has created more opportunities for local employees, reduced our reliance on expatriate personnel and promoted succession planning among local teams. This decentralisation has been critical to better managing the differing cultures and business environments across our diverse region. Finally, it is a great honour to be CEO Linfox International Group as we celebrate Linfox’s 60th Anniversary. The Linfox story is one of growth and I am proud to continue this tradition of growth with our Asian expansion.

Gabby Costigan CEO Linfox International Group

FEATURES

Future logistics: What lies ahead? As Linfox celebrates a 60 year legacy that saw it transform from one truck to a logistics icon, what might shape the logistics sector as it plans for a dynamic future towards 2020 and beyond? Linfox General Manager Strategic Market Development, Chris Buckthorp investigates.

In this modern, connected world, the purchasing dynamic has shifted with more information, power, and control in the hands of the consumer than ever before.

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Consumer behaviour: Times are changing Not all that long ago, the typical buying experience involved a trip to a retail store, where the retailer decided the products on offer and when customers could access them. In this modern, connected world, the purchasing dynamic has shifted with more information, power, and control in the hands of the consumer than ever before. Today, most people own smart devices, are connected through social media and consume seemingly endless media content. Numerous studies reveal the majority of consumers will research products, seek opinions from friends or peers and compare prices online before committing to a purchase, whether buying online or visiting a store. The new dynamic has created a twoway conversation between suppliers and consumers, who expect broad information about brands and products online. As a result, the relationship and trust between the

supplier and customer is now much more personal. Suppliers, whether retailers or brand owners, expect the world to hear when a promise is broken and know they are being watched as they try to resolve the problem. Generational shifts are also shaping the purchasing landscape. As the Baby Boomers move into retirement, economic buying power shifts into the more technology-driven Generations X and Y. In particular the digital native Generation Y are developing deeper brand relationships, especially when the social values of a brand resonate with their own. The valued loyalty of Generation Y is therefore more likely to be linked to brands than retailers As technology advances, supplier performance increases and consumer expectations about accessing more products through more channels are raised. To deliver a superior experience, suppliers must craft their physical channels accordingly.

What does this mean for logistics? The traditional logistics model, in which brand owners deliver goods to retailers for sale to consumers, is being increasingly challenged. While this physical retail store model will remain, alternative channels will continue to develop, enabled by last-mile delivery, sharing economy services (like Uber), social media based shopping and direct brand engagement. These are creating a complex network of capabilities which can be combined in various ways to connect products with consumers for an optimum buying experience. New service models that support a greater level of personalisation and can extend the buying experience to the consumerâ&#x20AC;&#x2122;s front door will be in greater demand. This creates opportunities for suppliers to bring new services to market, but as distribution volumes shift to these new models, the traditional supply chain will be challenged to increase efficiencies and reduce unit costs.

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Economic drivers In general, the 2020 Australian economic outlook points to stable consumer spending, however an ageing workforce will reduce available labour. The climate of continued cost austerity, uncertainty, tight margins and intense competition in the logistics industry is likely to continue. As companies compete to access a reduced pool of semi-skilled warehouse staff and truck drivers, costs will no doubt increase. Combined with expected wage growth, these factors will command measures to improve labour productivity.

The physical shape of the 2020 distribution network depends on its key players, with possible logistics scenarios largely depending on the growth of e-Commerce. E-Commerce setting the scene Australian retail e-Commerce still lags behind other developed economies, currently around six per cent of retail sales. If current e-Commerce levels remain stable, distribution is likely to continue with a hub-and-spoke network of national and regional distribution centres, supported by a nominal level of last-mile delivery and ‘click and collect’ service options.

In this scenario, retailers would continue competing on ‘every day low price’ strategies, pressuring FMCG margins. White label product strategies and range rationalisation would persist and FMCG companies will look to capture margins through further cost-cutting measures, production offshoring, mergers and acquisitions, exports, and attempting to directly link to the customer. Alternatively, if e-Commerce develops as it has in other developed economies and moves beyond 12-15 per cent of retail sales, a ‘consumer reigns supreme’ dynamic may emerge where modern, connected, supply chains will acquire retailer market share. These connected services will multiply as increased volumes support viable business models.

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New service models that support a greater level of personalisation and can extend the buying experience to the consumerâ&#x20AC;&#x2122;s front door will be in greater demand.

In this environment, the logistics task will include a greater level of case and piece picking, requiring automation for cost effective services at scale. Similarly, transportation will need to increasingly support last-mile delivery, but at higher service levels than we see in Australia today, as competition shifts to include faster delivery. The distribution network structure would then move from inventory centralisation to inventory positioning supported by metropolitan hubs. Fundamental investment in largescale warehouse automation systems will become industry best practice to deliver productivity improvements and cost reduction.

This model change will require increased capital investment by 3PLs and a significant change to the risk profile, as the design volumes for these automated facilities will need to come from several customers. While automation appears to be a bottom line for any 2020 Australian logistics future scenario, the shape of the logistics model depends on how the dynamic between retailers and manufacturers develops. Given Australiaâ&#x20AC;&#x2122;s low e-Commerce penetration, it will be interesting to watch how major Australian retailers strive to improve the consumer experience.

Interested in how the future of logistics and changing consumer trends are viewed in other markets? 2020 Future Value Chain: Building strategies for the new decade Shifting patterns: The future of the logistics industry BCG: The Millennial Consumer 11

FEATURES

Linfox sets its sights on the Mekong Delta

Linfox continues to expand in Asia and is looking to service emerging markets in the Mekong Delta as the region grows in scale and strength.

While Linfox has always worked to grow the business of its customers, the Mekong Delta region presents a unique opportunity to play a part in the economic development of three emerging economies: Laos, Myanmar and Cambodia. The importance of these countries to any company expanding or increasing its Asian presence cannot be underestimated. First, they have the strongest growth across the ASEAN region, with a rapidly urbanising population. Their governments are also providing tax incentives for foreign investment in the region. 12

Second, the establishment of the ASEAN Economic Community (AEC) will see trade corridors established to increase connectivity and open extensive cross-border transport networks. This is likely to improve the complex and immature transport infrastructure, which has previously deterred some larger multinational transport providers from entering the region. As countries traditionally dominated by agriculture, the regionâ&#x20AC;&#x2122;s need for reliable logistics providers is growing as new industrial and manufacturing markets emerge, closely followed by service and tourism industries.

In addition, a significant shift in consumer behaviour and expectations is emerging, moving away from traditional â&#x20AC;&#x2DC;wet (river) marketsâ&#x20AC;&#x2122; to convenience and supermarket models. Several multinational retail corporations have recently commenced operations in the region, with huge, western-style shopping malls.

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So what part is Linfox playing in all of this? Laos

Myanmar

In 2015, Linfox set up a 100 per cent owned company in Laos. To enable the business to own and run its own fleet, a joint venture was established with a group of local logistics companies. This partnership has already established strong relationships with Australian and local diplomats and the Lao Ministries. Strategically for Linfox, Laos physically borders five large Asian economies (Thailand, Cambodia, China, Vietnam, Myanmar) and, though the country is landlocked it is a well-placed location for a new logistics hub to service the Asian region, giving direct access for Chinese manufacturers to South East Asian nations.

Previously known as Burma and with a population of 55 million, Myanmar is the final country in ASEAN to open its borders to foreign investment. Linfox is well advanced in its plans to set up a services company in Myanmar, working with the Australian Government and AUSTRADE. With its political environment now stabilising and a democratically elected Government in place, Myanmar is undergoing an economic revival. Large FMCG companies have recently commenced manufacturing to capitalise on the countryâ&#x20AC;&#x2122;s high population, urbanisation and close proximity to Thailand, Bangladesh, India and China.

Linfox is already investing to improve the transport and logistics industry, and is working with the Ministry of Transport to establish a driver training centre in Laos. The Government is investing to create land-links with neighbouring countries and recently signed a sub-regional cross border agreement.

Cambodia In Cambodia, Linfox is in an exploration phase, with a focus on developing a greater understanding of the country and the needs of Cambodian customers. Linfox has set up a services company to establish its presence, as it looks to strengthen government relations and explore opportunities across several industries. With 15.5 million citizens, Cambodia has a more mature transport logistics market than Laos and Myanmar, a stable political and economic environment and a strong textiles manufacturing industry which accounts for 80 per cent of total exports. As the road and rail network in the Mekong region expands, strengthens and evolves, economic opportunities will develop for its surrounding countries. Linfox will continue to invest in the growth of these economies and in reliable supply chain networks that will help the countries and Linfox customers to prosper. 13

FEATURES

The demise of the internal combustion engine What does it mean for the transport industry? By Linfox Manager, Sustainability, Bo Christensen. In the end, battery manufacturers decided to back the starter motor as the market to supply. It was a boom/ bust time in industry and the battery industry.

Though the internal combustion engine has persisted for more than 100 years, it will succumb to commercial force over the next decade. Its replacements are more powerful, cheaper, cleaner, quieter and smarter. Its demise is driven by a perfect storm of interlocking technologies, including advances in solar energy and energy storage, and electric and autonomous vehicles.

Today, electric vehicles are making a comeback. Why the disruption, and why now?

Henry Ford had been a backer of the electric car but decided to support the internal combustion engine. He was a collaborator with Thomas Edison at the time he produced his Model T, which changed the game.

This graph illustrates the fundamental difference that is true of all ICE and all electric vehicle drivetrains.

For starters, electric vehicles are five times more energy efficient than an internal combustion engine. The reason is simple: there is very little wasted energy, and it is cheaper to transmit electrons than fuel (electrons vs. atoms).

Internal combustion

It is far cheaper to charge an electric vehicle than to fuel a car with an internal combustion engine as the table below shows. Maintenance costs are far lower for an electric vehicle too. The 18 or so moving parts in an electric vehicle (compared to more than 2,000 in an internal combustion engine vehicle) carry less than one per cent of the potential for issues.

RPM Electric

Torque

Each of these technologies allows the others to overcome existing technologies in their respective areas. Electric vehicles almost triumphed at the beginning of last century. For nearly a decade, there was no distinction in market share between the two.

And surprisingly, while often considered to be slow, an electric engine has more power than an internal combustion engine.

Torque

Electrons will inevitably beat atoms. The stalwart of modern transport, the internal combustion engine, is at the mercy of various replacements, both electric and hybrid.

RPM

An average Australian motorist over five years:

If they used an electric vehicle instead, they would:

• travels 69,000km

• consume 21kWh/100km

• consumes 7,383 litres of fuel

• use 14,490 kWh

• spends about $10,000 @ $1.30/L

• spend $1,300 on charging

• emits 17.5 T CO2

• emit 11.7 T CO2

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When you can buy a car that is cheaper, faster, more powerful and costs less to run – why would anyone stick with an internal combustion engine? Current cost curves predict that the shift will occur somewhere between 2020 and 2023. Advances in sustainable energy are supporting this shift: solar’s share of global energy has doubled seven times in the last 15 years. Current technology and cost trends, ‘clean disruption’ as defined by Tony Seba from Stanford, suggest that the disrupting trends of solar energy and storage, electric and autonomous vehicles will deliver the following by 2030:

• All new energy will be provided by solar or wind. • All new mass-market vehicles will be electric. • All of these vehicles will be autonomous (self-driving) or semiautonomous. • The car market will shrink by 80 per cent. • Gasoline will be obsolete. Nuclear is already obsolete. Natural gas and coal will be obsolete. • Up to 80 per cent of highways will not be needed.

A single car on 5th Avenue, New York in 1900

In combination, the disrupting elements form a new, interconnected energy ecosystem unlike any seen before. At the domestic scale, there will be significant market disruption and opportunity. AGL recently announced a 1,000 household trial in South Australia, pulling all of the four disruptor elements together. Logistics intersects with every disruptive element. Renewable energy will become more commonplace as electric alternatives extend into areas traditionally diesel and gas powered. Vehicles of lower gross vehicle mass will convert first, followed by higher mass vehicles. Linfox will benefit from new efficiencies and platforms as they become available, and is investigating options to implement various drive trains that may improve the efficiency of its operations.

• U p to 80 per cent of parking spaces will not be needed. • The concept of individual car ownership will be obsolete. • The car insurance industry will be disrupted. • The taxi industry will be obsolete. However fanciful this may seem to some, the two pictures below illustrate just how quickly a technology can be displaced by another in 13 years.

A single horse on the same street in 1913 - and not because there weren’t enough horses!

Current trends across the world Norway: One in three cars sold is now electric Netherlands: Phasing out fossil fuel cars within the next decade China: One in four new cars are electric Global: Plug-in vehicle sales growth 10 times the overall market

FEATURES

Linfox Chairman, Peter Fox AM receiving Orders of Merit from the Australian Olympic Committee (AOC) and the Victorian Olympic Committee (VOC) in 2013. Presented by AOC President, John Coates, these awards recognise his outstanding contribution to Australia’s Olympics team

Linfox flashback: Sydney Olympic Games Sydney, Australia hosted the Games of the XXVII Olympiad in 2000. In true Australian style its name was shortened simply to ‘The Sydney Olympics’ and while the country celebrated putting on ‘the best Olympic Games ever’, Linfox was quietly working behind the scenes to ensure that the logistics were delivered without a hitch. During the games, Sydney hosted 362,000 domestic and 110,000 international visitors. Some 10,651 athletes from 199 nations competed. With more than 500,000 additional people in Sydney for the event and a demanding global audience, Australia was put on the global sporting stage for the first time since the 1956 Melbourne Olympics. As Peter Fox, Executive Chairman of Linfox Logistics said, “While it was a huge task, the logistics was the easy part, the real focus was on making sure that Australia looked its best on the world stage.

“

The dynamics of Sydney changed during the Olympics. Different traffic patterns, road closures and the large number of people using the transport network made the nature of delivering on a logistics contract more dynamic. Linfox ensured the medals were always delivered on time but also had a novel back-up plan. Cathy Freeman at the 2000 Olympics opening ceremony.

“John Coates shook hands with me after we signed the contracts and said: ‘Just make sure that when the medals are presented, they’re always there’.” Although the public focus was on the 17 days of events, Linfox was working on the Games from 1998 through to six months after they finished. Preparations also included delivering the Olympic cauldron from its makers in Adelaide to Sydney’s Olympic Park.

“We had a helicopter with a spare set of medals just in case the traffic to the stadiums was heavy. It may seem over the top, but we’d given our word that we wouldn’t embarrass our country.” Linfox has supported the Australian Olympic Team since 1984. Peter Fox regularly hosts the Prime Minister’s Olympic Dinner which has raised more than $10 million to support the Australian Olympic Team. Linfox was also the official Logistics adviser to the Beijing Olympic Organising committee (BOCOG) in 2008. Peter Fox has also received Orders of Merit from the Australian Olympic Committee and the Victorian Olympic Committee.

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Celebrating a 60 year legacy. From one truck to an Australian icon...

A winner says, ‘There ought to be a better way to do it’; and a loser says, ‘That’s the way it’s always been done here.’ The moment you don’t believe that, you’ve got no hope. There’s always got to be a better way of doing it. Lindsay Fox AC

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An Australian icon for 60 years A legacy that began with one man and a truck and became a logistics icon.

1953

1956

1958

1961

1963

1968

Mid 1970s

1979

1980

1984

Lindsay Fox secures his truck driver’s licence at a relatively young age.

Lindsay starts his business at age 19 carting coal in winter and soft drinks in summer.

Linfox has 10 trucks working on the Schweppes contract.

Tyre manufacturer Dunlop signs its first contract with Linfox.

Linfox introduces one grocery truck on a three month trial with GJ Coles and Coy (today known as Coles).

Linfox wins the Courage Brewery contract, taking the fleet from 30 to 60 trucks.

BP signs its first contract with Linfox to deliver heating oil.

Linfox begins transporting for Woolworths.

The Linfox fleet grows to more than 1,000 trucks in Australia.

Linfox is delivering for 40 of Australia’s top 100 companies.

Operations commence in China, the first foray into Asia.

1950s With his first truck, Lindsay begins carting coal and briquettes in the winter and soft drinks in summer. He purchases his second truck the following year and the now iconic slogan, ‘You are passing another FOX’ was born. Known as Lindsay Fox Cartage, the first two years are marked by slow growth. In 1958, a contract with soft drink manufacturer Schweppes sees Lindsay expand his fleet to ten trucks. 20

1960s

1980s

In 1960 Lindsay opens his first depot and employs six drivers in 1961. The business secures its first contract with tyre manufacturer Dunlop, still a key Linfox customer. In 1963, Lindsay convinces GJ Coles and Coy, now Coles, to put one truck on a three month trial, with Linfox still servicing Coles today. The business incorporates in 1961 and in 1966, Lindsay Fox Cartage is renamed Linfox Transport Pty Ltd. In 1968 Linfox wins a contract with the English brewer Courage Brewery, doubling the Linfox fleet, with the first delivery the largest the company has fulfilled.

Linfox expands its customers and investments, and combines its warehousing and transport services to become a fully integrated supply chain solutions provider. In 1984 it launches operations in Shanghai, China, its first foray into Asia; and in 1985 establishes the Linfox Property Group. Linfox also purchases the Coca Cola fleet in Queensland, begins distribution for Carlton & United Breweries and commences warehousing and distribution for Arnott’s in Victoria. In 1989, the company establishes operations in New Zealand. By the end of the decade, Linfox is Australia’s largest privately owned logistics company, a distinction it maintains to this day.

1970s Linfox grows strongly and secures transport contracts with well-known Australian retail and resource brands, including a lucrative contract with BP to deliver bulk heating oil in Sydney. Linfox establishes Queensland operations, forging a new partnership with GJ Coles and Coy, while expanding the Victorian Coles contract. The business secures transport operations for Woolworths in Victoria, New South Wales and Queensland, a significant partnership to this day. It also commences national delivery for Coca Cola soft drinks. Now 1,000 vehicles strong, the company develops the dedicated Linfox Service Division.

1989

1993

1997

1998

2003

2006

2009

2011

2013

2016

The future

Operations commence in New Zealand.

Peter Fox is appointed Executive Chairman of Linfox Logistics.

Linfox purchases Avalon Airport from the Commonwealth.

Linfox is awarded the contract for the 2000 Olympic Games in Sydney.

Linfox purchases Mayne Logistics and Armaguard.

BevChain establishes as a joint venture with Lion Nathan.

Linfox signs the Australian Employment Covenant to help break the cycle of poverty in Indigenous Australia.

Linfox assists recovery operations following the Queensland floods.

Linfox is awarded the first Australian Defence Force contract.

Linfox has 23,000 people and more than 6,000 trucks operating across 11 countries in the Asia Pacific region.

Growing the Linfox business and continuing to lead the industry.

2000s Linfox manages the logistics for the 2000 Sydney Olympic Games, involving hundreds of employees and a year of planning. The business grows through several acquisitions. In 2001, the long term lease to operate and develop Essendon Airport is acquired from the Federal Government. In 2003, Linfox purchases Mayne Logistics, Armaguard and FCL. It establishes new operations in India, Indonesia and Vietnam during the decade, and also begins logistics for the Australian Grand Prix. In 2006 Linfox establishes BevChain as a joint venture with Lion Nathan. In 2009, then Prime Minister Kevin Rudd opens Linfox Logistics’ new global head office in Essendon Fields, Victoria. That same year, Linfox provides logistics and financial support to the victims of Victoria’s Black Saturday bushfires.

1990s Lindsay’s eldest son, Peter Fox is appointed Executive Chairman of Linfox Logistics in 1993. Despite the early 1990s recession, Linfox grows and attracts new customers, including Kmart, Carter Holt Harvey and Wattyl. The business expands across Asia, establishing operations in Thailand and Malaysia; creates Linfox Airports in 1996 and is awarded the logistics contract for the 2000 Olympic Games in Sydney. It establishes an IT-driven central control room to manage national freight and by the end of the decade, employs more than 2,500 people, has a fleet of 3,000 trucks and operates 5.5 million square feet of warehousing space. 21

Armed with 60 years of experience, strong values, exceptional people and a state of the art supply chain network, we continue to grow and invest to ensure that no one passes this Fox.

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Celebrating strong leadership in Asia Linfox International Group CEO Gabby Costigan was a finalist in the Telstra Business Women’s Award 2016 in the inaugural ‘Asia’ category.

Gabby served in the Australian Army for 20 years. During her time with the Australian Defence Force she was deployed to Afghanistan and worked as an advisor to the Australian Joint Chief of Operations. She also held a logistics support role for the Allied Forces in two theatres of war. After retiring from active duty, Gabby joined an American aviation company in a senior advisory role. As CEO, Gabby leads Linfox’s supply chain operations in six countries across South East Asia and the company’s expanding presence in the region. Since her appointment, she has focussed on building a company culture that is inclusive and teambased, and evolved the business model to accommodate the unique challenges of the region. Gabby is passionate about driving workplace diversity and inclusion. She mentors rising talent across the organisation and strongly supports the Linfox Graduate Program.

Linfox International Group CEO, Gabby Costigan.

The Telstra Business Women’s Awards have championed women for more than two decades. The Awards empower women to take pride in all they’ve accomplished and set bold goals to achieve even greater success. Gabby was among impressive company as a finalist in this inaugural category, including Telstra Business Woman of the Year (Asia), Rituparna Chakroborty, co-founder of TeamLease Services in India.

Gabby, Linfox International Group’s CEO since 2014, has a distinguished international career in the military and logistics where she has built a reputation for strong leadership and driving organisational success. “To move from a military career to a CEO of the largest privately owned logistics company in South East Asia, is very special. While my career has been blessed with great opportunities, I believe you create many of these opportunities through your own hard work,” said Gabby.

“One of the best parts of my job is seeing people achieve success; I love helping people realise their full potential. I love the challenges of working across diverse cultures and being able to improve not only our business but people’s lives.” Gabby is a board member of the Australian-ASEAN Council, providing advice on relevant bilateral or regional issues in South East Asia.

RESEARCH IN FOCUS

Optimising transport solutions

Linfox trials the MiniZinc platform to help make the right choices for multi resource transport problems. By Professor Mark Wallace and Dr Guido Tack When a ship docks with 20,000 containers, there are a lot of choices to be made. Each container must end up on a train or truck, but the port canâ&#x20AC;&#x2122;t fit all the trains and trucks at the same time. The ship must also be loaded for its next trip, and the berth must be cleared for the next ship. The containers therefore need to be unloaded as quickly as possible and piled up on the quayside. If the truck arrives for the bottom container first, things get awkward! Operations Research was developed to marshal resources during wartime. Since then, many large software systems have been built to support the management of complex organisations such as airlines and port operations. Over the years some of these systems have been released as commercial products, fronted with attractive user

interfaces and integrated with popular business software. Like all software systems, they grow larger, more complicated and less flexible with each passing year. As a result, the decision support software used by many companies has not kept up with their business needs, and they are incurring high software costs for solutions that too often fail to make the right choices. MiniZinc The Monash MiniZinc platform, developed in collaboration with Data61/CSIRO, makes it easy to model and solve optimisation problems. The user states the problem precisely and then chooses which optimisation technique to use from a menu. The platform does the rest. Development time has been reduced by an order of magnitude, and advances in

optimisation enable MiniZinc to support solutions that are both flexible and scalable. MiniZinc is used to schedule ships and tugs at Port Hedland, meeting various constraints such as the ship draft, ship speed and headway, different berth locations and tug availability. The MiniZinc technology is the basis for an optimisation platform that Monash and Linfox are collaborating on to solve complex multi-resource transport problems. This could be applied to common routing problems particular to the retail network, as the systems organise data to produce the least effort solution (whether measured in kilometres, hours, or cost) required to move goods. www.minizinc.org

RESEARCH IN FOCUS

Linfox Solutions

Monash SmartTraffic Management Solution

We’ve all noticed it. Traffic congestion is a growing problem. It’s not just an inconvenience, it’s costing our economy and we need to find solutions, fast. By Professor Hai L. Vu

control algorithms and real-time datadriven traffic estimation and prediction techniques utilising all the available data collected from various sources. In partnership with government agencies and industry partners, INM enables integration and coordination between motorways and arterial roads, and offers an opportunity to manage overall mobility needs using a range of transport modes, including public transport and active transport such as bicycles. Traffic congestion is not unique to Australian cities. Due to the rapid urbanisation of society, congestion affects all large cities around the world. Expanding expensive infrastructure, such as roads, should only be undertaken after smart, cost-effective traffic management alternatives have been carefully investigated and fully exploited. Intelligent transport systems that are underpinned by advanced information and communication technologies are a cost-effective way to better manage our transport network and its congestion.

Monash University is developing a new intelligent transport system which will form the basis for largescale, integrated and coordinated metropolitan network traffic management in Melbourne and beyond. This research is built upon an idea known as Integrated Network Management (INM) which was first proposed by Delft University of Technology (TUD, Netherlands). INM is a state-of-the-art platform that enables efficient management of large scale transport networks. The system is underpinned by sophisticated

A pilot of the INM system was deployed in Amsterdam providing very significant benefits. Initial results showed a reduction of up to 30 per cent in delays on the studied subnetwork. As a result, the INM system is being rolled out on a larger scale in Amsterdam and other cities in the Netherlands. A pilot INM system is currently being developed for Melbourne. Our researchers are working closely with VicRoads and industry partners, and expect similarly significant benefits.

Monash University and Linfox have a multi-million dollar strategic partnership that provides leadership and executive education for Linfox staff, drives industry research, innovation and technological advances across the supply chain network.

NEWS

The Linfox 2016 Mercedes Actros 2655 demonstrates its emergency braking capabilities.

60 years on show: The past meets the future The Linfox legacy was given centre stage as part of the Intelligent Transport Systems (ITS) World Congress.

Lindsay Fox in his first vehicle, the 1957 Ford F500.

To coincide with Linfox’s 60th anniversary, the Linfox-owned Australian Automotive Research Centre (AARC) hosted a Technical Tour to demonstrate the latest in vehicle technology and solutions for improved transport safety, security and efficiency.

The latest Linfox Mercedes Actros 2016 B-double then impressed onlookers with its adaptive cruise and emergency braking technology, while modern in-cab devices showed how real-time information and data keeps Linfox vehicles, drivers and the community safe on the road.

Linfox founder, Lindsay Fox hosted more than 170 international delegates and visitors on a trip down memory lane with a historic vehicle display led by his ‘first of the fleet’, a proudly restored Ford F500 truck.

“We have undertaken a strong campaign over the last 20 years to reduce incidents, source the best equipment, investigate the latest technology and implement it,” said Lindsay.

Linfox Solutions

A Linfox 1970 International ACCO 1800 rigid.

AARC tenant Robert Bosch Australia showcased its vehicle technologies including robotic steering systems, wet weather stability control and automatic emergency braking systems. Rheinmetall-MAN Military Vehicles Australia, also an AARC tenant, demonstrated their trucks in fording, obstacle clearing, and load handling modes, as well as the latest in in-cab military vehicle technology.

The AARC occupies a 1,000 hectare site 125 kilometres south-west of Melbourne and is the largest privately owned and independently operated automotive testing facility in Australia. It offers an extensive range of automotive engineering services to all vehicle and component manufacturers. To learn more, visit: www.aarconline.com www.itsworldcongress2016.com

Creating a virtual Linfox cab to show the latest in safety and technology devices.

Delegates, guests and media gather for the opening ceremony.

The AARC highway circuit.

NEWS

A sustainability milestone Linfox has achieved a significant milestone in reducing its greenhouse gas emissions by 51.2 per cent.

Linfox has introduced Euro 6 emission standard vehicles.

In 2007, Linfox began a journey to reduce its environmental impact, by committing to cut its greenhouse gas emissions by 50 per cent. This commitment placed the spotlight on the Linfox sustainability agenda and how it could meet the organisation’s needs without compromising future generations. Through the dedication and sustained efforts of its people and customers, Linfox achieved its target, reaching a 51.2 per cent reduction in greenhouse gas emissions in August this year. Linfox Executive Chairman, Peter Fox said that this result shows Linfox’s proactive commitment to addressing climate change, “Our approach to emissions is based on a belief 28

in climate science. We share an obligation to upcoming generations and are pleased that our strategy to reduce our carbon footprint has been effective. “There are significant wins for both business and the environment by reducing emissions. We know our customers also want to reduce their carbon footprint through our operations, and are working closely with them in many areas to develop more environmentally efficient processes. “Above all, I am proud that our people have achieved such an exceptional result.”

How the target was reached Through its GreenFox sustainability program, Linfox made consistent investments in sustainability initiatives across the business. These initiatives focused heavily on reducing greenhouse gas emissions and improving energy efficiency. New truck and tyre technologies Low rolling resistance tyres were implemented across most vehicles as standard. This minimised energy wastage and improved fuel economy across the fleet by approximately 4.5 per cent.

Linfox Solutions

Efficient warehouse lighting systems Light-emitting diode (LED) lighting systems were implemented to new buildings and retrofits. These systems have proven to be more energy efficient and cost effective. A Linfox operated site in Botany, New South Wales will be the next to implement LED lighting. A lighting audit estimates lighting energy savings of 80 per cent are expected. Eco-driver education programs Linfox’s EcoDrive program continued to educate new and existing drivers on efficient driving practices. This provided environmental and economic benefits. Aerodynamic vehicle design Prime mover aerodynamic kits were fitted to all new vehicles to reduce vehicle drag. This improved engine performance and reduced fuel consumption. By implementing innovations such as roof fairings, turning vanes, side fenders and aerodynamic mirrors, fuel savings of eight per cent can be reached.

Best practice equipment use

Looking ahead

Euro 6 emission standard vehicles were introduced to reduce particulate pollution and increase fuel efficiency. By 1 July 2018, all new vehicles in Australia will need to be Euro 6 compliant to adhere to emission standards.

Linfox has placed a renewed focus on sustainability and the continuation of its sustainability journey through its 2020 strategy. It is committed to consistently meeting and exceeding the 50 per cent greenhouse gas emissions reduction target.

Creating a green workplace culture

As part of this, Linfox will transition to a multi-focus target and increase its use of renewable fuels, renewable energy drive-trains, energy efficient lighting and solar energy. Linfox has been actively engaged with key technology providers and institutions to take advantage of low emission developments.

The zero waste to landfill target was implemented, with all waste streams at each site tracked for recycling and landfill to ensure that waste is reduced, reused and recycled where possible. Linfox now avoids more 350 tonnes of carbon dioxide through landfill diversion, and more than 580 cubic metres of landfill each month. Supply chain optimisation New and existing vehicle routes and warehouse locations were optimised to maximise efficiency and reduce resource use.

Linfox Group Manager Safety and Sustainability, David Hopkins said, “Linfox’s 2020 strategy highlights a commitment to supporting sustainable initiatives. “It is an exciting time in the energy and transport industries and Linfox is well placed to deliver further improvements and innovation to its people and customers.”

NEWS

Linfox and DuluxGroup Setting the standard A Linfox Property Group, Linfox Logistics and DuluxGroup collaboration has resulted in the paint giant’s relocation to an impressive new distribution centre.

Built to DuluxGroup specifications and completed six weeks ahead of schedule, the best-in-class site is home to two facilities, part of a consolidated warehouse for Dulux paint and Selleys home improvement products.

“Built with the latest safety, sustainability and efficiency technology, the Linfox owned and operated facility sets an enviable benchmark in fire, safety and sustainable systems,” said Linfox Group Manager Industrial East, Simon Livingstone.

“This is a highlight of a close and collaborative partnership that commenced several years ago, and further strengthens the relationship between Linfox and DuluxGroup.” A team of 800 people worked more than 55,000 construction hours to custom build the storage site to hazardous materials specifications. Located in the Marsden Park industrial precinct, the site is 40 kilometres north-west of Sydney.

Linfox Solutions

Leading fire and safety and systems • Built to FM Global standards • 800,000 litre fire sprinkler tank • 8 ,496 fire sprinkler heads with specific inrack sprinklers • F our-hour fire rated walls, foam suppression systems • 20 kilometres of fire sprinkler pipework • C ut-off room with ability to store high risk dangerous goods

A sustainable operation

• F oam fire protection for high risk dangerous goods

• Energy efficient, intelligent LED lighting system fitted throughout

• M echanical ventilation in dedicated dangerous goods area

• Power factor correction to maximise power efficiency

• B est-in-class security system with 128 cameras

• Underground water tanks including:

• External photo electric security beams

Efficiency initiatives • D ouble-sided facility with inbound and outbound areas • One-way traffic circulation • Automated speed shrink wrapper • Full walk-in bays

– 200,000 litre rain water harvesting capability for amenity flushing and irrigation – 315,000 litre storm water treatment tank which removes contaminants prior to water entering the estate system (the tank houses 100 storm filter cartridges and is complimented by 44 Enviropod inserts to the site stormwater pits, catching all large debris and rubbish before it enters the network)

• External pallet storage

• Solar hot water heating

• Rapid charge for material handling equipment

• Pending solar panel power to reduce power consumption off grid

• Additional area available for future expansion

• 4,450 plants and trees planted

LINFOX PEOPLE

Journey to success: Attracting and nurturing Linfox people It’s the engaged, enthusiastic and multi-skilled people at Linfox that make the difference.

Linfox 2016 Graduates.

Linfox is committed to attracting new talent and offers candidates a number of pathways to join the business. “Our dedicated employment and human resource programs connect Linfox people with many opportunities to develop an understanding of logistics, hone business skills and provide the chance to work with people at all levels,” said President Human Resources, Laurie D’Apice. “These programs help them and the business achieve outstanding results.”

The experience curve Thanks to an encouraging manager, Cameron Trewin jumped at the opportunity to join the Linfox Graduate Program in 2001. Working as a casual employee in the Linehaul team while studying part time, Cameron soon saw Linfox as a permanent career option. Today Cameron is the National Manager for Woolworths Secondary Freight, bringing cross-functional expertise gained through his graduate rotations that saw him work across warehouse, transport, administration and operations management.

Linfox Solutions

Managers and staff at Linfox Ready Program sites receive Indigenous Cultural Awareness training to help create a culturally safe and welcoming workplace. Taking the first step After graduating from university, Tamara Sexton Heitia was still unsure about her career path. National Manager, Woolworths Secondary Freight, Cameron Trewin.

Formal learning and development opportunities through Linfox College connected Cameron with courses in safety, administration and supervisor training, complementing his on-the-job learning. “Most people would need to work in many different companies to get the experience and training offered under one roof at Linfox. “The organisation offers a positive culture and an incredible avenue of opportunity for people to cement themselves within the industry.” . Ready, set, go! Eric Pigram began his transformative Linfox journey through the Indigenous Linfox Ready Program.

His early experience also saw him in various key customer roles, including working on a major retail customer tender and a greenfield site development. “I was lucky to work with experienced, nurturing mentors who supported my learning and gave their unique perspectives on work and life.” Together with his Retail business unit colleagues, Cameron is now committed to recruiting graduates and cadets into the team. His advice for them? “Work hard and productively with your team, form positive relationships across the business and embrace diverse roles to build your experience.”

This pre-employment initiative provides training over four weeks and offers full time employment in a warehouse role upon successful completion. Approaching his 12 month anniversary as a Storeperson in a major Linfoxmanaged site, Eric’s skills and commitment won him ‘Pick Bonus of the Week’ and ‘Employee of the Month’ awards in his first six months.

Logistics was an industry Tamara hadn’t considered, but after hearing about the Linfox Cadet Program through a family member who worked at Linfox, she took the chance to experience the industry. “I’ve learned about what drivers encounter day-to-day on the road, and also gained exposure to how a warehouse operates, while working with our customer management teams,” said Tamara. “My initial site manager supported and encouraged my learning, ensuring my Cadet Program goals aligned with the longer term goals for my next position.” Tamara has also become a mentor for two student trainees and is a role model for other cadets. “The Linfox Cadet Program provides an opportunity for on-the-job learning in a new industry - it’s a great stepping stone and can help set up your career within transport and logistics.”

He is currently completing his Certificate III in Warehousing Operations on the job through Linfox Operational Training. “The Linfox Ready Program was ideal preparation for full time work,” said Eric. “The training and work experience helped to boost my confidence and set some solid career goals, and I hope to further develop within Linfox.”

L-R: Victorian Linfox Ready Program participants Zac Doolan, Eric Pigram, Shaun Marion and Thomas Smith, with Linfox National Indigenous Manager, Seona James (centre).

LINFOX PEOPLE

Many roads lead to Linfox

Linfox recognises that success begins with its people. The business is committed to attracting new talent through a number of pathways and strongly supports learning and development.

CADET PROGRAM

DIRECT EMPLOYMENT

• Two year development program

• Visit the Linfox website for available opportunities.

• Certificate-level training in transport and warehousing • Exposure to all facets of a site

GRADUATE PROGRAM

INDIGENOUS LINFOX READY PROGRAM

• Yearly intake of degreequalified candidates

• Four weeks full time training including forklift licence

• Two year development program

• Pathway into full time warehouse role

• Six month rotations across various parts of Linfox

• Certificate III in Warehousing Operations

• Personal development initiatives

SCHOOL-BASED TRAINEESHIP • Yearly intake in Victoria only • Combined schooling, paid on-site and theory training • One year program for VCE or VCAL students • Certificate III in Logistics on successful completion

Interested in a career at Linfox? Visit the ‘Working at Linfox’ section on www.linfox.com

Linfox Solutions

Linfox learning and development Linfox College

• Personal and professional

development • Partnered qualifications • Internal learning programs • Executive education programs • Linfox College Online

Linfox Operational Training Nationally recognised training

• Transport and warehouse operations • Heavy vehicle licensing • Forklift licensing

Learning partnerships Monash University

• Education and training • Supply chain industry research • Technology capabilities National Association of Women in Operations (NAWO) – Gold Membership

• Professional development • Mentoring • Leadership programs • Networking events

LINFOX PEOPLE

Outfoxing in efficiency

Linfox’s industry-leading continuous improvement (CI) program keeps Linfox ahead of the pack. While 70 per cent of Lean and CI efforts in large organisations fail, LeanFox has been going from strength to strength since it was first developed in 2010.

Another facility for FMCG goods focused on streamlining pick-related activities to reduce the picking cycle time by 49 per cent. At a tinned food site, the team reduced forklift travel time by nearly one kilometre for each container, producing an additional capacity of 10 containers per day.

Linfox Group Manager – LeanFox, Peter Buriani says that the first step to any successful CI program is recognising that all Lean/CI implementations involve organisational change. “Implementing Lean principles is not just altering a step or two in a process. Manage the change effectively throughout the implementation by supporting all those involved or impacted, and you’ll go a long way to embedding a Lean culture into your organisation,” said Peter. Peter knows what he’s talking about: with more than three decades of experience in the logistics industry, his roles have spanned finance, commercial, business development, operations and business improvement. This broad cross-functional experience provides a sound perspective on both strategic and operational matters, which he used to develop the LeanFox program.

To date, 602 Linfox employees have taken the LeanFox training program, facilitated and accredited by the Australian Graduate School of Management (AGSM) at the University of New South Wales.

Linfox Group Manager – LeanFox, Peter Buriani

Since the LeanFox program was rolled out in January 2011, CI solutions, even small ones have often frequently resulted in significant outcomes. For example, in one customer facility, the LeanFox team identified wasted travel between forklifts and the fixed printers within the warehouse. Installing forklift-mounted, wireless thermal printing devices reduced annual forklift travel by 11,000 kilometres, increased labour productivity by 90 hours per week, and ultimately delivered efficiency savings of $190,000 per annum.

The LeanFox team also provides advice on a consulting basis with several Linfox customers frequently tapping into the team’s strong Lean and Six Sigma capabilities. Whether these services take the form of CI workshops, auditing and assessing practical process improvements or conducting endto-end value stream mapping of the supply chain against customer needs, the goal is to improve processes and help increase our customers’ efficiency. Peter Buriani was recently awarded a prestigious Lean Six Sigma Gold Belt by the AGSM and is internationally recognised as a thought leader on the development and implementation of Lean and Six Sigma within logistics businesses.