Sharp ■ Informed ■ Challenging
19.3.18
FULL TANK: Suttons Tankers has bought chemical waste and fuels sector haulier Bullard. Suttons will manage the equipment, drivers and customers, with Bullard company founder Simon Bullard remaining in a key account management role. The company, based in Dinnington near Sheffield, was founded in 1993. The Bullard name and brand will be phased out in favour of Suttons Tankers. Suttons Tankers MD Michael Cundy said: “We already have the largest shareduser chemical fleet in the UK and this acquisition allows us to focus on one of our key strategic sectors for growth.”
NEWS INSIDE Proud family
CM Downton delighted with EmergeVest deal
p3
Perfect fit
Rase Distribution MD finds best fit with HW Coates p6
Bad report
TNT UK files fourth consecutive pre-tax loss p8
OPERATORS IN THIS ISSUE Bidvest Logistics .................................p11 CM Downton .........................................p3 Ceva Logistics ......................................p3 Culina Group .........................................p8 DHL Supply Chain .......................p3, 11, 12 Eddie Stobart ......................................p12 FedEx....................................................p8 HW Coates ............................................p6 John Lewis Partnership .......................p12 John Mitchell Haulage & Warehousing .p16 O’Donovan Waste Disposal ..................p10 Pink Link...............................................p6 Rase Distribution ..................................p6 Rhys Davies & Sons .............................p11 TNT UK..................................................p8 Tony Carter Transport ..........................p20 Yusen Logistics ...................................p11
Government is failing to provide clear leadership, hampering plans to tackle pollution
MPs call for CAZ clarity By Chris Druce
A taskforce of MPs has claimed the government is failing to provide leadership on the controversial issue of clean air zones (CAZs), which many hauliers fear will put them out of business. ‘Improving Air Quality’, a joint report from four select committees, published last week (15 March), also labels the government’s response to the UK’s ‘air quality catastrophe’ inadequate and calls for immediate, bold action. Among a raft of proposals, the MPs state: “The government is failing to provide clear messaging and national leadership on the issue of clean air zones. This lack of clarity is causing confusion and hampering councils’ ability to tackle air pollution as quickly as possible.” The committees also call on the DfT and Defra to clarify how they will ensure that CAZs will not simply displace polluting vehicles to areas
where monitoring is more limited. The report calls for robust economic assessments and support for local communities and businesses – quoting the FTA’s testimony that the government’s plan places “too great a burden on business in towns and cities, especially SMEs”, which often rely on vans and HGVs – and providing those affected with more time or resources to upgrade their fleets. Road transport businesses in Leeds have already expressed their concerns that the city’s CAZ will ruin them as customers look for cheaper alternatives outside the zone. The issue prompted seven trade associations to write to the government recently urging action to mitigate the effect of CAZs. The RHA has pointed out that the Euro-6 standard most, if not all, zones will demand is set to hammer second-hand values for Euro-5 trucks and below across the country.
Neil Parish, chairman of the Environment Food and Rural Affairs Committee, said: “The government’s latest plan does not present an effective response to the scale of the air quality catastrophe in the UK. “We are concerned that the government is treating air quality as a box-ticking exercise. Real change will require bold, meaningful action. We are calling on government to develop a properly resourced support scheme available to all councils struggling with air quality.” However, the joint report is lukewarm about endorsing calls for scrappage schemes and requests that Defra publishes its analysis of scrappage scheme consultation responses instead. Rod McKenzie, director of policy and public affairs at the RHA, told MT that the lack of a national policy was a huge issue, with the potential for different air quality standards in various UK cities despite
there being a single agreed standard for a compliant HGV. “The net effect is that hauliers can’t afford to trade like this. There’s so much compliance, so many rules and officials are making it up as they go without any understanding of the massive effect that has. CAZs will drive some hauliers out of business, and force some not to trade in cities where these draconian laws are used.”
News: Bidvest gets KFC back p8 Focus: Warehousing p12 Viewpoint: John Perry, SCALA, p14 Feature: Parts p16 Careers Hub/Classified p18
MTR_190318_001.indd 1
15/03/2018 15:46:33
18
18
THE BEST PLACE TO SEE THE BEST FOR TIPPERS AND BULK HAULAGE VEHICLES | PRODUCTS | SERVICES Harrogate Convention Centre | 31 May – 2 June 2018
To find out more and to register for FREE tickets, visit www.tip-ex.co.uk or www.tank-ex.co.uk
For all exhibitor enquiries, please contact Richard Bennett Tel: 07889 823060, Email: Richard.bennett@roadtransport.com
AD_190318__P2.indd 2 29945_Tip_Ex_Tank_Ex_2018_MOT_FP.indd 1
15/03/2018 11:20:45 22/01/2018 12:37
News
motortransport.co.uk
EYES RIGHT: Too many professional drivers are ignoring weakness in their vision, according to the RHA, which is focusing on the issue with a new mobile eye clinic that is travelling around the country. The Vision Van, run in association with Vision Express, is based on a Mercedes-Benz Actros supplied by Sparshatts, coupled with a custom-built trailer from Cartwright Conversions. RHA chief executive Richard Burnett said that too many professional drivers are nervous about approaching an optician with poor eyesight in case it jeopardised their career. “Good eyesight is vital for any road user, but for an HGV driver especially,” he said. “Despite this, there are still far too many drivers who ignore any weakness in their vision.”
Family feels ‘comfortable’ that firm has found right home to take it into the future
Downton future secure after EmergeVest deal By Chris Druce
Palletforce and NFT Distribution owner EmergeVest has bought CM Downton for £75m, in a deal that secures the long-term future of the Gloucestershirebased operator. EmergeVest has acquired the entire shareholding from the Downton family, although the Downtons will continue to serve in their respective senior management roles. EmergeVest has been acquiring companies in the UK logistics sector since its formation in 2013. Led by CEO and MD Heath Zarin, EmergeVest’s UK portfolio includes supply chain software company Adjuno, Allport Cargo Services, NFT Distribution, NR Evans (now part of NFT) and Palletforce. Established in 1955, CM Downton had a turnover of £117m for the year to 30 June 2017, and made a pre-tax profit of £5m. It runs 600 tractors
and 1,800 trailers, employing 1,350 people at locations that include Moreton Valence (its headquarters), Quedgeley, Shepton Mallet, Chepstow, Sharpness, Hardwicke, Tuffley, Runcorn, Manchester, Leeds, Dunstable, Chatham and Tilbury. Downton serves a range of
industry sectors, including food and drink, retail, manufacturing, ink and paper, print and publishing, energy, waste and consumer goods. Clients include AB InBev, Dyson, Whirlpool, Fever-Tree, Saica Paper, UPM-Kymmene Corporation, Frontline and Marketforce.
Zarin said: “We are excited at the opportunity to bring Downton into the EmergeVest family and to be investing in a business with such significant potential.” Andy Downton, MD of CM Downton, told MT he was very proud of what the family and a “fabulous team of people” had built. “However, any family business sooner or later has to face succession. When you have built with your siblings a significant business it is imperative that this is thought through properly. “EmergeVest is a private equity company, but it is a niche private equity company focusing purely on the logistics sector. It has bought best-inclass businesses across the country. “The Downton brothers are very comfortable that we have found the right home for the business and the future is really exciting.”
Walk away from those uneconomic contracts, expert urges operators Operators need to be better at walking away from uneconomical contracts, said a supply chain expert, who pointed to KFC’s issues with its new DHL Supply Chain contract as a cautionary tale. Richard Wilding, professor of supply chain and logistics 19.3.18
MTR_190318_003.indd 3
at Cranfield UK, said businesses of all sizes are guilty of not understanding their cost to serve customers. “There have been points raised that maybe KFC shouldn’t have gone for the lowest bidder,” he said. “We’ve created a culture where people
believe that each time a contract is renegotiated, it will be cheaper. If we carry on that race to the bottom, that isn’t going to serve anybody and you’ll end up with unstable businesses.” Wilding will speak on the topic at the Microlise Transport Conference in May, advising
operators to examine the true cost to serve their customers. “If you have clarity of what your service costs at the level of service your customer wants, the customer can make a decision on what they want. If they want to pay less, the operator needs to walk away,” he said.
Training challenge ahead if UK quits customs union Hauliers will face a major training challenge if the UK leaves the customs union, Ceva Logistics executive director Leigh Pomlett has warned MPs. Speaking to the Treasury Select Committee on Brexit in his capacity as FTA president, Pomlett said the need for hauliers to make customs declarations would require a significant training programme across the industry. He quoted HMRC estimates that approximately 185,000 companies will have to make customs declarations for the first time postBrexit, with declarations set to rise from 55 million to 255 million a year. “Look at the sheer training need,” he said. “Even for relatively small companies, that is a big issue in terms of training. That is beside whatever happens at border controls and training the people there to be able to administer this traffic. “I am talking about the people who work in the companies that I represent. This is a huge and increasing issue.” He added: “I want to make it clear that this is not something we should overlook. I am old enough to remember when we did border controls before all this kicked off. What a painful life we had. The training needs then were huge. And we are talking about vast volumes now. The world has changed.” He called for the government to ensure there is enough time to prepare. MotorTransport 3
15/03/2018 16:07:54
CHICK, CHICK, CHICKEN. “We have 30 trucks on Scania repair and maintenance contracts and get most of our servicing done overnight to maximise our uptime. The work is carried out by Scania-trained technicians using specialist tools to ensure jobs are completed quickly and right first time. The quality of their work is excellent, and that’s invaluable to us – we wouldn’t go anywhere else.” Michael Pedersen, Chairman Pederson Contracting Services Ltd.
AD_190318__P4.indd 4
15/03/2018 11:07:37
AD_190318__P4.indd 5
15/03/2018 11:07:53
News
motortransport.co.uk
Rase Distribution MD sold the firm to the ‘best fit’ following four expressions of interest
HW Coates buys Rase By Chris Tindall
The future of Lincolnshire Hazchem and Palletways Network haulier Rase Distribution has been secured after it was sold to HW Coates in Leicestershire. Rase MD Geoff Hill said Coates was the best fit for his business, and with no natural family succession, he agreed to sell it in January for an undisclosed sum. Hill said: “Coates is a credible company that I have known for years, and I have known the directors for a long time. It came at a good time and it was a positive offer from a positive company. “We are a strong company, and a strong company has bought us,” he added. “It wants to move it on, invest and grow
its business. We are part of its growth plans.” He added that four companies had expressed interest in buying Rase, but that HW Coates was the best fit. “Rase has enjoyed strong
working relationship with the Coates business for many years, sharing customers within the chemical industry. “Both Rase and Coates were founder members of the Hazchem Network when it
commenced trading in 2004. Clearly this brought both companies closer together, making the decision to sell to it much easier,” said Hill. Hill, who has been a director at Rase for nearly 25 years, will continue working with the company until 2021. He then has the option to continue or take semi-retirement. Rase was founded in 1967 and its headquarters are in Langworth. It has an O-licence authorising up to 52 HGVs operating out of two depots in the county. The last set of accounts for HW Coates, for the year ended 31 December 2016, showed that the company’s turnover climbed to £37.7m (2015: £36.5m) and pre-tax profit was £20.5m (2015: £12.1m).
FORS freezes fees for third consecutive year FORS has frozen its fees at the same level for the third consecutive year. Membership, subscription and audit fees will remain unchanged for the best practice accreditation scheme. “FORS is gaining traction with operators up and down the UK,” said its director John Hix. “Over two-thirds of our membership is outside of the M25. “It proves to me that the fundamental FORS message of operational best practice resonates with operators regardless of their location and irrespective of their fleet makeup.” FORS now has more than 4,700 members, and Heathrow Haulage was named as its 250th Gold level member last month.
Welsh bus lane decision gets the thumbs-up Hauliers have welcomed the Welsh government’s decision to consider allowing HGVs to use bus lanes in limited circumstances. Welsh economy and transport secretary Ken Skates will discuss the idea with highways and transport organisations over the next year, and look at the feasibility of allowing HGVs to use bus lanes in certain areas to reduce congestion. The review follows a recommendation by Welsh traffic commissioner Nick Jones, in his first report to the Welsh Assembly in September last year, to allow HGVs into bus lanes in certain circumstances where it would improve traffic flow. In his report, Jones argued that the strategy is a recognition of the fact that HGVs are essential for the economy and the provision of services and was preferable to HGVs being replaced by large numbers of “unregulated large vans”. He also argued that modern trucks are far less polluting than a five-year-old family 6 MotorTransport MTR_190318_006.indd 6
diesel car, adding: “I am not suggesting that HGVs should use all bus lanes; I merely point out that each case should be considered on its merits, and that there might be occasions when allowing HGVs to use a bus lane will improve traffic flow.” The FTA said it was delighted to hear the Welsh government is seriously considering this proposal. A spokesman said: “Making better use of valuable road space by allowing trucks to use bus lanes not only eases congestion, but helps to keep delivery costs down and ensures food and other vital supplies arrive on time at our shops and homes, something that benefits everyone.” An RHA spokesman said the move could help cut congestion, adding: “Only last week during ‘snowmageddon’ we saw how quickly supermarket shelves emptied because trucks couldn’t get through in time.” The Welsh government will publish the review’s conclusions in 2019.
Palletways launches evening deliveries Palletways has introduced evening deliveries to its service offering, allowing it to deliver to customers for 12 hours every day. With the new delivery slots between 5pm and 9pm, the pallet network now allows its customers to pick between a morning, afternoon or evening delivery window. Using its ETA system, launched last year, customers are then given a two-hour window for each delivery.
Palletways network development director Barry Byers said the new service is an industryfirst that opened up new opportunities for both its business and consumer customers. He said: “For our growing home-delivery market, people can now choose to receive deliveries after work, rather than making arrangements to stay at home during the day. “For our business customers, we can make deliveries at
a time that opens up new opportunities, like choosing delivery windows when access restrictions on the route to their premises no longer operate.” Paul Ince, depot principal at Palletways member Pink Link, said: “The launch of this new service allows us to provide yet more value to our customers. The convenience and flexibility that the evening delivery window will offer is truly industry-leading.” 19.3.18
15/03/2018 11:08:38
THE LEADING TRADE SHOW OF THE DOWNSTREAM OIL INDUSTRY
Wednesday 18th & Thursday 19th April, 2018 at the Exhibition Centre Liverpool (ECL)
Join us at the award-winning FPS EXPO to benefit from a truly world-class trade show Why don’t you join us in 2018? Call: +44 (0) 121 767 1320 or visit: www.fpsshow.co.uk
For all enquires please contact: Dawn Shakespeare | E: ds@fpsonline.co.uk | T: +44 (0) 121 767 1320
AD_190318__P7.indd 7
15/03/2018 11:10:20
News
motortransport.co.uk
Culina toasts Warrens deal
£5.7m loss attributed to exceptional transformation costs and currency exchange rates
Fourth pre-tax loss at TNT By Emma Shone
TNT UK made a pre-tax loss for the fourth consecutive year in 2017, during a lengthened reporting period that brings the company in-line with parent company FedEx’s financial year. For the 17 months ended 31 May 2017, the business reported a pre-tax loss of £34.3m compared with a £22.1m loss in its previous 12-month reporting period to the end of 2015. The business made a gross profit of £58.4m but was pushed into an operating loss of £31.7m by £90m of ‘administrative expenses’. In its strategic report TNT UK said £5.7m of the loss was down to exceptional transformation costs, and said the company had also suffered because of foreign currency exchange rates. However the business did see healthy turnover growth of 43% to £1bn (2015:
£717m). This was a result of changes to pricing during the 17-month period, it said. The accounts do not include damage from the cyber attack the company fell victim to last June; just outside of the reporting period. However the accounts do list the attack as a post-balance sheet event. The report said: “While TNT Express operations and communications were significantly affected, no data breach or data loss to third parties is known to have occurred”. It added that “substantially all of TNT Express’s critical operation systems have been fully restored” as of February this year. Parcels analyst Frank Proud, director of Apex Insight, said that given its integration with FedEx, TNT’s results for the period could be of little significance. He told MT: “Given the integration these figures might not be very meaningful. In
many ways, performing at the same level with all the uncertainty of the merger is not a bad result.” He added that TNT was sold because it was struggling, and was never going to be a quick fix. Proud said: “I think this will be a long-term fix. TNT has underperformed in the market for the past few years, which led to it being taken over and it will take time to turn round. I wouldn’t expect to see major changes until FedEx starts to merge the networks, and they will go cautiously with that to avoid things going wrong.” TNT parent group FedEx UK also saw a drop in performance for the year ended 31 May 2017. Its turnover fell 3% to £245m (2016: £253m) while its pre-tax profit fell by a third to £22m. TNT had not responded to a request for comment as MT went to press.
Culina Group has entered into a partnership with baked goods warehousing and logistics provider Warrens Group. The deal follows Culina’s joint venture with refrigerated transport firm Morgan McLernon, and its purchase of the remaining shares in logistics specialist CML Fulfilment last year. In February 2016, it also purchased Great Bear Distribution. Announcing the deal, Shropshire-based Culina Group said the agreement is part of a plan to expand its ambient logistics business and will significantly strengthen is market position in the UK. Warrens Group, which has its headquarters in London and a depot in Rugby, is the preferred primary haulier for bread and cake distribution for Tesco and Sainsbury’s. The firm, which also delivers to Morrisons, Waitrose and Asda, operates more than 140 vehicles and 220 trailers across six sites and employs approximately 390 staff. In its latest results to 31 December 2016 the company reported a turnover of £34.2m and a pre-tax profit of £2.5m. Thomas van Mourik, Culina Group CEO, said: “This joint venture with Warrens Group means we are now market leader in the UK in the baked goods niche.”
NI 116 Deerpark Rd, Toomebridge, Co. Antrim | T. 0044 (0)28 796 50765 UK Bradder Way, Mansfield, Nottinghamshire | T. 0044 (0)1623 625354
8 MotorTransport MTR_190318_008.indd 8
19.3.18
15/03/2018 12:39:08
.0503 53"/41035 "8"3%4 4&$63& :063 4&"5 "5 5)& .045 13&45*(*064 /*()5 0' 5)& */%6453: $"-&/%"3
#00, /08 "5 .5"8"3%4 $0 6,
+VMZ t (SPTWFOPS )PVTF )PUFM -POEPO NUBXBSET
AD_190318__P9.indd 9 30014_MTA 2018_SP_MT.indd 1
15/03/2018 11:12:10 05/02/2018 10:28
News
motortransport.co.uk
Training and assessment centre ‘will increase service levels’ provided to fleets to improve staff retention
Bridgestone opens tyre training centre By Steve Hobson
Bridgestone has opened a training and assessment centre at the Horiba Mira testing ground near Nuneaton, to improve and accredit the skills of tyre technicians. While training courses and assessments will be chargeable, Bridgestone sales and marketing director – North Europe region John Folliss
said the new centre represented a “significant investment” for the company and wider tyre industry. “It will not benefit us – the aim is to increase the service levels provided to fleets,” he said. “The industry is also trying to improve staff retention and training is really important for that.” The company has been
training tyre technicians in the UK for 12 years at dealerships and customer sites, but the new purpose-built centre raises the bar for safe yet effective training. It features a cut-down semitrailer with four wheels of different designs to simulate real-world situations and enable accreditations to take place in a controlled environment. TRULY ECONIC: O’Donovan Waste Disposal’s latest three Mercedes-Benz Econic units give the north London operator what is believed to be the largest fleet of direct vision skip-loaders in the UK. The waste management firm was the first UK operator to purchase an Econic 4×2 1830L skip loader in 2016, and has boosted this number to six. In addition, approximately one-third of the fleet is fitted with additional glazed panels on the nearside door to improve visibility of cyclists alongside the truck. Thirty-six trucks on the 90-strong fleet already give the driver enhanced direct vision from the cab, with 17 more on order, 14 of which will be Econics.
100% Extra
A A FREE
on all deliveries A recipe for success... Transdek’s refrigerated double deck Wedge trailers* carry up to an amazing 100% more load compared to single deck and 25% more load compared to other double deck trailers.
Food for thought... “Just two daily Wedge trailer trunk deliveries save us 157,00 miles and over £200,000 in transport costs a year” Distribution Manager - Thomas Ridley Foodservice
*Patent granted
Call 01302 752 276 or visit www.doubledeck-trailers.com
10 MotorTransport
RoadTransport (TRidleys) 138 x 206.indd 1
MTR_190318_010.indd 10
06/04/2017 16:54
19.3.18
15/03/2018 12:28:12
News
motortransport.co.uk
DHL Supply Chain ‘fully committed’ to its client despite losing out on supplying up to 350 restaurants
Bidvest claws back KFC work By Chris Druce
DHL Supply Chain remains committed to client KFC, despite the fast food chain stripping it of a significant portion of its work. Following last month’s failure to launch its supply chain and distribution service with KFC, the chain was forced to close two-thirds of its UK estate. Previous transport supplier Bidvest Logistics has now been brought back on board, signing a long-term agreement
earlier this month with KFC UK & Ireland to supply up to 350 restaurants in the North, starting 26 March 2018. Paul Whyte, business unit director at Bidvest Logistics, said of the deal: “We are delighted to welcome KFC back to Bidvest Logistics. “As the UK’s leading food service logistics specialist, we understand the complexities of delivering fresh chicken.” In response, DHL Supply Chain told MT: “We acknowledge KFC’s decision to invite
Bidvest Logistics to service its 350 restaurants in the North of the UK. “In conjunction with our partners, we remain fully committed to delivering excellent service to KFC’s remaining 550 restaurants across the UK.” John Perry, MD of SCALA, a provider of management services for the supply chain and logistics sector, said: “The decision by KFC to return part of its contract to its previous supplier, Bidvest, following
DPD to build fifth UK hub
the catastrophic issues it experienced when it switched to DHL, demonstrates the ongoing difficulties the fast-food giant is still battling with. “It also shows that there is a lack of confidence that the problems can be solved quickly. “It puts DHL in a difficult position, as it is effectively being bailed out by a competitor, but it is also potentially harmful to its reputation and the success of winning other business.
“Splitting the operation between suppliers at this stage, after implementation, raises the question again as to why the transition from Bidvest to DHL wasn’t phased in, and whether the proposed solution can be made to work. “To date, this will have been a costly experience for all concerned parties. With logistics contracts typically being low-margin affairs, large unexpected costs or incurred penalties can erode the benefit of switching suppliers.”
CHALLENGING: Rhys Davies & Sons saw turnover increase by 3% last year to £39m, thanks to growth among customers in the housing market and the food products sector. IT and restructuring activity led to a 21% reduction in pre-tax profit to £318,657, but the Cardiff-based logistics and warehousing company said its technology investments rolled out in early 2018 would boost operational efficiency. In its financial report for the year to 31 August 2017, the company said a continuing shortage of drivers was being exacerbated by Brexit. However, it added: “Any challenge also brings opportunities for those in a position to take advantage of the same and the directors remain focused on ensuring the company is in the strongest possible position to endure the challenges of an uncertain future.” The company, which trades as Rhys Davies Logistics, said the risks of withdrawing from the EU that it identified in 2016 – uncertainty, a lack of confidence, the effect of trade tariffs and immigration policy – remained a palpable threat to haulage. Rhys Davies declined to comment.
DPD has been given the go ahead to build its fifth UK hub, which it expects to go live in October 2020. The new £150m site will be built just two miles from DPD’s Hub 4 and International Gateway site in Hinckley. The 276,000ft² hub building will be 503m long, and will be built on a 39-acre site on a new 82-acre employment park just off junction 1 of the M69. The carrier’s fifth UK hub will process 71,000 parcels a night, upping the network’s sortation capacity by 60%. Building work is expected to start in October.
Yusen Logistics celebrates Innovation Hub returns to the CV Show latest warehouse completion Construction has finished on Yusen Logistics’ latest warehouse at Prologis Park Wellingborough West, which gives the group a nationwide footprint of more than 2 million ft². The new 37,000 ft² building has been designed to achieve a minimum BREEAM (Building Research Establishment Environmental Assessment Method) very good rating. 19.3.18
MTR_190318_011.indd 11
Located next to the A509, it will allow Yusen to serve customers in Birmingham and London, as well as the east coast ports. The operation should be live from August. Yusen Logistics UK MD Kevin Appleton said: “Wellingborough’s location and Prologis’ delivery capability made a new purposebuilt facility at Prologis Park the ideal choice for our new operation.”
The Innovation Hub returns to the CV Show in 2018, where the focus is on the developments emerging in the sector, such as autonomous trucks, mobility as a service, and alternative fuels. Organised by MT, the seminar sessions will run between 11am and 3pm in the auditorium located in Hall 3a. The programme will be hosted by Andy Salter, MD of MT which is owned by DVV International. “We’re building a programme with some great
speakers who will be talking on a range of topics: truck platooning; autonomous vehicles; truck technology; and alternative fuels,” he said. ■ If you have a product or service that you would like to include, we are looking for short, engaging presentations that are tightly focused on your topic. Email Andy Salter at andy.salter@roadtransport. com, and visit cvshow.com for more information about the show and to register for your free place.
MotorTransport 11
15/03/2018 15:58:29
Focus: warehousing
Fresh perspective By Peter Ward
Chicken run When almost two-thirds of the UK branches of KFC failed to open for business following ‘teething problems’ at the start of a new supply contract, the logistics industry found itself near to the top of the national news food chain for a few days in February – for all the wrong reasons. Getting fresh chicken out to 900 restaurants across the country is a pretty complex business, but that didn’t stop KFC’s supply chain partner, DHL, being widely criticised for what some commentators described as one of the worst logistics failures of recent years. Of course, the truth is that there are times when supply chain delays cannot be avoided, but in most cases customers and the public remain blissfully unaware of any problems. However, when “operational issues” mean a high-street giant like KFC has to close some of its sites, the companies responsible for the failure – and, to some extent, the broader industry of which they are a part – inevitably suffer a degree of reputational damage. But, I would contend, that one of the reasons why KFC and DHL’s difficulties have received such widespread coverage is due, in a large extent, to the rarity of such supply chain breakdowns. For the most part, the logistics industry goes about its vital role in feeding the nation silently and unstintingly efficiently. It is overlooked and taken for granted and, like so many things, it is only noticed when something goes wrong.
Peter Ward is chief executive of the UK Warehousing Association Tel: 020 7636 8856 pward@ukwa.org.uk
12 MotorTransport MTR_190318_012.indd 12
motortransport.co.uk
Midlands warehousing demand grows Demand for warehousing in the Midlands is recovering quickly after a fall in 2017, according to leading agents in the region. JLL director Richard James-Moore, said enquiries from occupiers have risen sharply so far this year. “Things are encouraging at the moment. It is a strong market in terms of demand,” he added. Cushman & Wakefield said enquiries are 15% up on the same period last year, with discounters and internetrelated activity leading the way. Partner Simon Lloyd commented: “Underlying demand is healthy and is largely to do with the shift in retailing patterns. But for occupiers that means more competition for available buildings.” This follows a subdued picture in H2 2017 when take-up of units above 50,000ft2 was 4.7 million ft2, 24% below the five-year average, according to research by Knight Frank. Despite this, there were some large deals. Eddie Stobart, for example, acquired 615,000ft2 in warehouses at Bardon, Rugby and Lichfield. In addition, it has taken an 844,000ft2 build-tosuit unit at Midlands Logistics Park in Corby, due for completion by winter 2018. Other major deals involved toy maker Mattel, which acquired 205,000ft2 at Optimus Point in Leicester, and security
and electronics distributor Anixter, which took 213,000ft2 at Prologis Park Fradley. There is also demand at a slightly smaller level, some of it for urban logistics facilities, according to James-Moore. “We are seeing the emergence of a new sector, the mid-box market from 50,000ft2 to 100,000ft2,” he said. Developer Barberry is heavily involved in this market and will complete a 46,000ft2 warehouse on the A34 in Birmingham this spring and a 65,000ft2 unit in Aston (pictured above) by Q3 2018. At the larger end of the market, a
261,000ft2 speculative warehouse in South Normanton, Derbyshire, is due for completion by early September and two speculative units of 341,000ft2 and 169,000ft2 are available at Imperial Park in Coventry. There are also some large tracts of land earmarked for future development in the region, including sites at DIRFT in Daventry, East Midlands Gateway near Castle Donington and Magna Park in Lutterworth. In addition, Birmingham city council is this month due to announce its development partner for a 3 million ft2 site at Peddimore, north of the city.
GVA report: largescale warehousing shortage continues
LOGICAL CHOICE: Global technology giant Premier Farnell has signed up for a 360,000ft2 building in Leeds, which will be the city’s largest-ever warehouse development. The company operates in 36 countries and is moving from a site elsewhere in Leeds. It has signed a 20-year lease on the building, at Logic Leeds. The warehouse will be completed by late 2019 or early 2020. Logic Leeds is being developed by Muse and has the ability to accommodate 1.6 million ft2. Other occupiers include Amazon and John Lewis. The development is able to offer incentives as part of the Leeds City Region Enterprise Zone, including simplified local authority planning, support for superfast broadband and enhanced tax relief on capital expenditure. Scott Morrison, an associate at Cushman & Wakefield, which advised Premier Farnell, said: “The new facility has the space and specification to meet modern distribution requirements, and future-proofs Premier Farnell’s operations in Leeds.”
The shortage of large-scale, good quality warehousing shows little sign of easing, according to research from GVA. Its Industrial Intelligence Spring 2018 report estimates that the available stock of buildings above 100,000ft2 is 24.3 million ft2 – the equivalent of only 14 months’ supply. “With a relatively modest level of speculative schemes completing and an expectation that current demand levels will be maintained, we expect supply to remain relatively constrained,” the report states. This will put pressure on land availability, especially in the urban logistics market, which often has to compete with higher value uses such as residential. Take-up of large warehouses was 21.1 million ft2 in 2017, a 23.3% fall on 2016. However, the investment market, which is vital for financing development, remains buoyant and reached a record level of £10.7bn in 2017. 19.3.18
15/03/2018 09:26:21
Leading the way in commercial vehicle innovation
Being at the very forefront of product and service innovation in the road haulage and transportation industry is a common desire that we all share. It’s here that big decisions are made and reputations are built. The Commercial Vehicle Show 2018 is the showcase event for the industry and provides a real opportunity for everyone to innovate and engage. Join us at the NEC Birmingham, Tuesday 24th – Thursday 26th April 2018.
@TheCVShow
AD_190318__P13.indd 13
Get your FREE ticket Register today www.cvshow.com
15/03/2018 11:14:02
Viewpoint
motortransport.co.uk
Don’t fall fowl of supplier changes T John Perry MD SCALA
he recent delivery problems experienced by KFC stores across the country brings to light just how complex logistics operations can be, especially when servicing a large number of outlets that each have their own individual challenges. The operational issues have been put down to the fact that KFC had switched its delivery contract to DHL, and the complexities of integrating with new IT systems. When changing contract providers, companies have to be very careful and must weigh up the risks. Typically, logistic operations cost companies between 4% and 10% of their sales value. So, even if a 10% cost benefit is achieved by changing contractor, this only really represents 0.4% to 1% of sales. KFC’s loss of sales will very quickly negate those benefits. Making changes to a contract, where often it is only the current supplier and the individual workforce who truly understand what the logistics
operations involve, is a huge risk that has to be managed. We recently came across a company that had re-tendered its logistics operation and the current provider had bid significantly under its current contract price. When asked why, the supplier said that it had responded to the tender brief as it had been written. It knew that there were many complexities that came with the job, which had not been included in the tender document. But, the company also knew that its competitors, who didn’t know the business or how it worked, would only be bidding against what was included in the tender document. If the decision is made to switch provider, then contingency planning is vital to ensure that possible issues can be identified and resolved at the earliest opportunity. We would always insist on detailed planning, rigorous management of the preparation and operations set up, and of course, close communication between both parties well before the contract commences.
The newspaper for transport operators
To contact us: Tel: 020 8912 +4 digits or email: name.surname@roadtransport.com Editor Steve Hobson 2161 Editor-in-chief Christopher Walton 2163 Group news editor Chris Druce 2158 Deputy news editor Emma Shone 2164 Group technical editor Colin Barnett 2141 Aftermarket editor Roger Brown 2168 Vans editor George Barrow 2156 Urban editor Hayley Pink 2165 Group production editor Clare Goldie 2174 Chief sub-editor Rufus Thompson 2143 Key account managers Andrew Smith 07771 885874 Richard Bennett 07889 823060 Miranda Hall-Morley 07825 409551 Display telesales Barnaby Goodman-Smith 2128 Classified and recruitment advertising Head of sales operations Julie McInally 2122 rtmclassified@roadtransport.com Sales director Vic Bunby 2121 Head of marketing Jane Casling 2133 Head of events/MT Awards Stephen Pobjoy 2135 Managing director Andy Salter 2171 Editorial office Road Transport Media, Sixth Floor, Chancery House, St Nicholas Way, Sutton, Surrey SM1 1JB 020 8912 2170
Tragedy highlights need for driver fitness review
T Steve Hobson Editor Motor Transport
he recent guilty verdicts on the two truck drivers involved in the fatal minibus crash on the M1 last August is a stark reminder to every HGV operator and driver of the heavy responsibilities they bear. Our condolences go to the relatives of the eight people who died that morning, and their deaths make it clear why we have O-licences and HGV driving licences for large goods vehicles over 3.5 tonnes. If two vans had been involved it would still have been a bad crash, but it is unlikely there would have been so many fatalities. The fact the driver who initiated the crash had lost his licence and had been drinking raises the tricky issue of how far employers should go to check drivers are entitled and fit to drive. The DVLA now enables employers – with their drivers’ consent – to check their licences electronically. Current best practice recommends this is done every three months, but that means a driver could be behind the wheel for almost three months with no licence unless he or she admits the offence to their employer. The same goes for serious medical conditions
14 MotorTransport MTR_190318_014.indd 14
or a drink or drug problem – it is the driver who has primary responsibility to declare these to the DVLA, which then decides whether or not to revoke the licence. When I tried to get my provisional HGV licence the DVLA was reluctant to issue me one because I have type 2 diabetes – and quite right too. It was rigorous in checking up on my medication and ability to control my blood sugars, and after six weeks of correspondence I gave up. But once a driver has got an HGV licence it is all too easy to hide medical problems and there is a limit to what employers can do to proactively check they are fit to drive. This tragic incident should lead to a review of the current system to see if there is more the DVLA and DVSA can do to notify the O-licence holder if one of their HGV drivers has any issues they should be aware of.
Free copies MT is available free to specified licensed operators under the publisher’s terms of control. For details, email mtsccqueries@roadtransport.com, or call 01772 426705 Subscriptions Tel 0330 333 9544 Quadrant Subscription Services, Rockwood House, Perrymount Road, Haywards Heath, West Sussex RH16 3DH Rates UK £135/year. Europe £163/ year. RoW £163/year. Cheques made payable to Motor Transport. Apply online at mtssubs.com Registered at the Post Office as a newspaper Published by DVV Media International Ltd © 2018 DVV Media International Ltd ISSN 0027-206 X
Got something to say?
If you would like to contribute to MT’s Viewpoint, email steve.hobson@roadtransport.com 19.3.18
15/03/2018 15:02:36
In association with
21/22 JULY 2018 - DONINGTON PARK
THE FESTIVAL OF TRUCKS, DRIVERS & LIFE ON THE ROAD
Kids g FREE! o
12 ye ars a nd un der
BOOK TICKETS
www.convoyinthepark.com AD_190318__P15.indd 15
15/03/2018 11:16:47
Parts
It’s a part-ache Sourcing parts can be a dilemma – OEM parts or non-OEM parts? Simon Jack finds out if there is a general consensus
John Eastman, chair of the Professional Sector Council at the Institute of Road Transport Engineers (IRTE), says: “I would tend to go for original equipment for really critical parts used for steering or braking.”
16 MotorTransport MTR_190318_016-017.indd 16
D
eciding how to source parts can be a difficult process for operators. Should they stick to equipment supplied by the truck or trailer manufacturer, and hopefully protect their original investment, or should they look for good quality alternatives that reduce running costs? Malcolm Dodds, the RHA’s head of technical services, believes non-OEM parts can play a useful role – but only if used carefully and if the operator has good monitoring systems to judge the durability and performance of a part. “If the part wears out too quickly it is a false economy. However, it could be that you actually find something that is harder wearing than the OEM part,” he says. Some operators prefer to source certain parts from the truck manufacturer, particularly if the price differential is not that great. John Eastman, chair of the Professional Sector Council at the Institute of Road Transport Engineers (IRTE), says: “I would tend to go for original equipment for really critical parts used for steering or braking.” Truck manufacturers do not make all parts themselves and it might be possible to buy original parts that
do not carry the truck manufacturer’s logo. “Costs can sometimes be prohibitive if you are buying from the manufacturer and you may be able to obtain the part for less money from the same source they have used,” he explains. If that is not possible some alternative parts can be perfectly adequate, Eastman believes, but it is important to examine the specification carefully. “You need to look at how much wear you get before having to replace the particular part to see if it provides value for money,” he says.
Mixing up the parts
Repair and maintenance company Pullman Fleet Services says manufacturer-sourced parts can often provide quality, reliability and good warranties. However, Phil Cane, the company’s head of partnerships, suppliers and parts, says: “We use our in-house technical and engineering knowledge base to work with customers to define the right mix of manufacturer and non-branded quality alternatives.” Unsurprisingly, manufacturers are keen to emphasise the quality of their parts. Sam Whittaker, Mercedes-Benz’s director of customer service and parts, says that having invested in a truck many want to get the best out of it and see using genuine parts as a way of achieving this. “Good quality and safety are often among the reasons why someone has bought Mercedes19.3.18
15/03/2018 09:15:23
motortransport.co.uk
Benz trucks in the first place and the same thinking applies when they buy parts,” he says. Whittaker says that even if operators source parts from the company that supplied MercedesBenz the parts might not be an exact match and are unlikely to have gone through the same rigorous testing and quality control process. Similarly, Graham Dale, head of UK parts operations at Scania, says: “Because we have a modular build concept we tend to manufacture more of our parts ourselves than other European manufacturers and, even where we don’t, they tend to be to a higher specification than is otherwise available.” He believes poor quality parts can affect safety, but there are operational considerations as well. “If you look at vehicle performance there can be a reduction in fuel economy,” he says. Karl-Heinz Meister, head of UK parts at MAN, says independent tests of its brakes carried out by European vehicle inspection organisation DEKRA found they were harder wearing and provided a more constant braking action than non-OEM competitors. “It is not worth taking risks with your brakes or engine power just to save a few pounds,” he says. Vehicle manufacturers consider the efficient supply of parts to be an essential element of customer service. Mercedes-Benz has parts managers attached to its dealerships and analyses the pattern of replenishment so that the right parts are stocked.
Identifying developing issues
In addition, developments in vehicle connectivity mean it is possible to identify any developing problems from the engine’s IT systems rather than waiting for a physical inspection. “When vehicles come in for their six-week inspections we can have the correct labour and parts available before the inspection takes place,” Whittaker explains. Scania also aims to make sure that vehicles spend as little time as possible off the road. All parts come either from its global warehouse at Opglabbeek in Belgium or through its UK warehouse in Hinckley. Orders placed before 6.30pm are delivered by 8am the next day. MAN aims for 99% availability and will discuss with dealerships what parts should be in stock based on past history and the expected effect of new fleet contracts or product launches. “In addition, we have inter-dealer deliveries if one dealer doesn’t have a part and, if necessary, we will fly parts over from Germany to reduce downtime,” Karl-Heinz Meister says. Pullman Fleet Services also aims for 99% availability through stock-holdings at its workshops and its national parts distribution centre in Ellesmere Port. One of the fears some operators have about using alternative parts is the effect this might have on the warranty but, legally, the burden of proof is on the manufacturer to prove there was consequential damage from fitting the part. The RHA’s Malcolm Dodds says: “With the majority of components it shouldn’t affect any warranty. The cases where warranties won’t apply is where there has been driver abuse of the engine.” Another factor can be use of the wrong type of fuel, oil or lubricants which could, for example, damage the engine, he says. One way around the sometimes difficult 19.3.18
MTR_190318_016-017.indd 17
choices of how to source parts is to opt for an R&M contract that includes parts. Meister says there has been a marked increase in companies using this approach, particularly since the advent of more complex Euro-6 engines – in fact, the UK market has a higher proportion of such contracts than other countries. “It gives operators peace of mind. Having to repair trucks and trailers is not their main business,” he says.
Full R&M package
Massey Wilcox, which uses Mercedes-Benz trucks except for one Scania in its fleet, takes this approach, as MD Robert Wilcox explains. “We have for the last 20 years had our trucks on full R&M packages and even those not under a contract all receive branded parts,” he says. Grangemouth-based John Mitchell Haulage & Warehousing has also used contract maintenance for around 20 years for its fleet of Scanias and MANs. MD Iain Mitchell says: “We quickly realised that while perhaps on paper the numbers were at best neutral – own workshop versus manufacturers workshop – the savings in management time were huge.” However, the company closely monitors how the manufacturers’ workshops are performing. “They need to get very high MoT pass rates, they need to keep our vehicles on the road with minimal downtime and they need to keep the costs to a minimum,” says Mitchell. He believes that having OEM-branded parts is a key advantage of this and a similar approach is taken with trailer parts. “We do maintain our trailers in-house and, again, I would not take the gamble in fitting anything other than parts supplied by the manufacturer.” When it comes to maintaining trailers, axle and suspension manufacturer BPW says it has initiated a move towards replacing worn brake shoes with brand new parts instead of using relined shoes. The company’s aftermarket manager Stephen Bestwick says fitting new shoes reduces downtime, as well as decreasing the possibilities of brake noise, vibration and premature lining degradation. “By using brand new brake shoes you are getting much higher quality and the security of a warranty,” he says. Whether they decide to use OEM parts or not is down to individual operators, but however they choose to manage this area of the business they need to have a well thought out policy to maximise both safety and operational efficiency. ■
COUNTERFEIT PARTS As with any branded product there is the possibility of counterfeiting truck parts – if the box has the right logo on it, it can be difficult to judge with the naked eye whether or not the part is genuine. However, the RHA’s Malcolm Dodds believes that using reputable suppliers, whether it is the local truck dealership or a third-party supplier, can eradicate most of the risk. “The majority of operators will buy from tried and tested sources. I don’t think many will come across counterfeits unless they are buying from overseas on the internet,” he says. The IRTE’s John Eastman agrees that buying parts overseas is a risk. “How are you going to know if it’s counterfeit if you have sourced something in Asia? Scania’s Graham Dale Operators need to deal with someone they know, who can provide parts with the correct specification,” he says. The IRTE runs a Workshop Accreditation scheme in conjunction with the FTA which helps establish the credentials of anyone carrying out repairs. This involves an independent audit of the workshop’s standards to assess their premises, equipment, technical and clerical staff, management, documentation, quality and appearance. Scania’s Graham Dale agrees companies should look carefully at the country of origin before buying parts. “There are some poor examples of copies of our parts particularly from South America, Turkey and Asia. Some websites use the logo styles and colours of truck manufacturers, allowing the customer to believe that they are supplied by us or at least endorsed by us,” he says. The company will take legal action where it can to prevent this and also against the sale of counterfeit accessories such as jackets, shirts, hats and keyrings.
MotorTransport 17
15/03/2018 09:15:43
AD_190318__P24.indd 24
15/03/2018 11:18:39