Motor Transport 6 November 2023 by Motor Transport

Sharp ■ Informed ■ Challenging

Belgian giant Sitra Group acquires Abbey Logistics

NEWS INSIDE Surcharge success

Haulier passes fuel costs on p3

Weight limits breached Drivers fined in Berkshire

6.11.23

Optimistic outlook

Meachers faces falling profit p4

OPERATORS INSIDE Evri �� p4 Fox Brothers �� p4 GXO Logistics �� p3 Macano South West �� p3 Meachers Global Logistics �� p4 Neill & Brown Global Logistics �� p4 S C Lyons Haulage �� p3 Stan Robinson �� p3 Travis Perkins �� p4

Belgium-based Sitra Group has acquired Abbey Logistics for an undisclosed sum, in a move that sees a major consolidation of the food logistics sector. Sitra Group was launched in 1962. It employs approximately 1,150 people across 11 countries, including the UK, and operates a fleet of 700 owned trucks and over 2,000 trailers and containers, including liquid and powder food tankers. The group, which last year reported a turnover of €165m, is largely owned by the Saelens family, with investment company Creafund holding the balance of shares since 2021. The purchase of Abbey Logistics Group, which boasts an annual turnover of £75m, sees Sitra Group

add nearly 600 staff and a fleet of 325 trucks and 550 trailers to its operations. Sitra Group has pledged that Abbey will continue to operate under its own name and livery. An Abbey Logistics spokesperson told MT that the company has no plans to make any staff redundant or to close any depots.

Abbey has been majority owned by private equity firm NorthEdge Capital since 2016, following a management buyout led by Steve Granite, former chief executive and current chairman, who is to take on an advisory role at the company following the acquisition.

Fowler Welch and Great Bear Distribution deliver impressive pre-tax profit increases for 2022

Culina companies report soaring revenues and profits By Chris Tindall

Culina Group companies Fowler Welch and Great Bear Distribution fought against “challenging market conditions” last year to increase both revenue and pre-tax profit. The latest financial results, for the year ending 31 December 2022, showed that chilled food supply chain business Fowler Welch increased turnover by 23% during

the period to £201m, from £163m in 2021. Pre-tax profit increased from £4.6m to £12.4m, although the business pointed out that almost £2.7m of this was an exceptional profit from the disposal of joint venture Integrated Services Solutions. In February 2022, Fowler Welch acquired Robert Burns Logistics

in order to boost its presence in the fresh logistics market. It said this purchase had allowed it to increase its scale and expertise in the sector, which had accelerated growth. Meanwhile, fellow Culina subsidiary Great Bear Distribution saw revenues and profits soar in 2022; turnover increased at the UK ambient 3PL by 16.4% to

£399m and pre-tax profit more than doubled to £42m, compared to £17.7m in 2021. In late 2022, the decision was taken to transfer the warehousing activity of group undertaking Eddie Stobart over to Great Bear. The firm said this had allowed it to expand its storage portfolio, which would help with further growth. “The company is well funded and financially robust, so the directors are confident the company is well placed to meet the challenges of the ongoing economic climate and market conditions,” it said. Culina Group itself reported a 37.8% increase in pre-tax profit, to £5.7m in 2022. Turnover increased by 43% to £88.3m, which it attributed mainly to increased recharges following the purchase of Stobart umbrella company Greenwhitestar Acquisitions in July 2021.

Focus: business barometer p6 Viewpoint: hybrid carriers p8 Alternative fuels: hydrogen p10 TIP Group p12 MT Awards p16

News

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Stafford haulier ‘financially strong’ after passing on higher diesel prices

Stan Robinson benefits from surcharge policy GXO extends

Waitrose deal

By Chris Tindall

Stan Robinson said it had enjoyed “another successful year” after its latest financial results showed the haulier generated revenues of £26.7m. Turnover during the year ending 31 May 2023 increased by 0.6% compared to 2022, although the company acknowledged that the increase was down to it successfully passing on costs as a result of its diesel surcharge. In its annual report, the Staffordheadquartered haulier said: “The surcharge is included in the diesel costs, which rose from £5.1m in 2022 to £5.2m this year. In real terms turnover fell by £560,000.” Pre-tax profit also reduced, from £1,411,000 to £1,191,000. “Throughout the year, the group has remained financially strong with very good levels of cash flow providing self-funding without the

need for bank financing,” it said. “The service performance of the haulage operation has been excellent, underlying Stan R o b i n s o n’s c o n t i n u e d commitment to retain and further its reputation in the industry. “The management and staff have continued to work hard to maintain its commitment to customers by always looking to

improve service quality and achieve customer satisfaction.” Stan Robinson added that it had invested heavily in fixed assets during the year, with almost £2.5m spent on vehicles to support its haulage operation. The group holds operator licences in four traffic areas, authorising between 30 and 130 HGVs at each depot.

GXO Logistics has extended its contract to deliver produce into Waitrose stores across the UK. The deal means GXO continues to operate two distribution hubs at the supermarket chain’s Milton Keynes depots in Magna Park and Brinklow. Gavin Williams, GXO UK and Ireland MD, said: “We look forward to deploying our expertise in the grocery sector to help further reduce costs and raise efficiency and productivity for Waitrose.” Waitrose head of distribution operations and transport, Doug Kay, added: “After a successful three years, GXO has become a trusted partner. We’re working together to implement the latest technology, to even further improve our supply chain.”

HGV drivers hit with weighty fines

WORK OF ART: Macano South West has labelled its new Schmitz Cargobull Euroliner, specified with a rear-mounted forklift truck, as “the Rembrandt of trailers”. The Exeter-based haulier, which transports palletised goods across the south of England and to the Czech Republic, added the bespoke semi-trailer to improve loading and unloading services. Macano owner Miri Papaj said: “The Modulos galvanised chassis doesn’t bend when you have 2.5 tonnes on the back and the forklift adaptation is top quality. This Euroliner is the Rembrandt of the trailer market. It’s a beautifully made thing.”

HGV drivers have appeared in court in Berkshire after breaching weight restriction orders across the county. Thames Valley Police said it undertook regular patrols, along with the Public Protection Partnership (PPP), across Bracknell, West Berkshire and Wokingham to check whether lorry drivers were breaking the law. T he cases appearing at Reading Magistrates’ Court in October included: A driver of an 18-tonne vehicle travelling through a 7.5-tonne weight restriction on a bridge over the River Thames on the B478 in Sonning. The driver was found

guilty and fined £198 and ordered to pay £180 costs; The driver of an 18-tonne MAN travelling through a 7.5-tonne weight restriction on Mill Lane in Newbury. The driver pleaded guilty and was fined £115 and ordered to pay costs of £180; A driver of a 32-tonne truck travelling through a weight restriction on Langley Hill in Tilehurst pleaded guilty and was fined £666 with £180 costs; The driver of a 12-tonne truck was observed by a PPP road traffic enforcement officer breaching a weight restriction on Church Road in Aldermaston and was fined £146 with £180 costs.

Administrator hopes to rescue struggling haulier with CVA The administrator for a Somerset haulage firm is trying to rescue the business through a company voluntary arrangement (CVA) after a review showed that it was still solvent. Insolvency practitioners at Leonard Curtis said S C Lyons Haulage had “strong outgoing cumulative net cash flow projections” and was 6.11.23

solvent on a balance sheet basis so could be rescued. The family-owned haulier, which operated HGVs out of two bases in Axbridge, Somerset, called in administrators last month after pressure from HM Revenue & Customs for VAT and PAYE liabilities. S C Lyons Haulage has been trading since

2014 but it accrued “a significant amount of borrowing” with its bank during 2016. It then suffered due to the Covid-19 pandemic and the cost of living crisis. However, Leonard Curtis said the firm reported a turnover of £593,000 and a pre-tax profit of £68,000 in the year to 28 February 2023. MotorTransport 3

News

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Evri profit comes under pressure despite record volumes Evri saw pre-tax profit slashed by over 50% last year as market challenges took their toll. However, the company has reported record volumes this year and has predicted the “busiest peak period in our history”. Reporting its results for the year to 25 February 2023, the parcel delivery giant said that while revenue remained virtually

unchanged at £1.464bn (2022: £1.465bn), pre-tax profit tumbled by 56% to £51m (2022: £117m). The company attributed the profit fall to economic and political factors in the period resulting in “significant inflation, higher interest rates and a weakening of consumer confidence”. The year also saw greater volatility in customer demand, which the company said

was driven by continued economic uncertainty and the impacts of the cost of living crisis. The company was also hit by the “anticipated post-pandemic channel realignment, as physical stores were not subject to lockdown closures this year. As a result, parts of the online retail market have softened compared to previous years.”

Southampton firm remains optimistic despite fall in turnover and profit

Meachers feels effect of post-pandemic dip Meachers Global Logistics saw both turnover and profit fall last year after additional business activity created by the Covid-19 pandemic lockdowns fell away. Its latest annual results for the year to 31 May 2023 show a 17.1% fall in turnover to £45.8m (2022: £55.3m) while pre-tax profit came in at £4.5m, down from £5m in the previous period. Southampton-based Meachers specialises in national and international freight and transport logistics services, including freight forwarding, supply chain management, UK warehousing, distribution, training, logistics transport and contract management. It has

Photo: Craig Eccleston

By Carol Millett

operating licences for 154 trucks and 204 trailers and employs around 200 staff. Despite the decline in turnover and profit, the family firm remained positive. In its review of the business, the group said: “Overall, the directors consider the group has performed well over the last 12 months. However,

as reported last year, in the prior year’s results we had undertaken a considerable activity that was associated entirely with the pandemic and, as expected, there was minimal activity on this account in the current financial year. Excluding this contract from the prior year, turnover from the remaining activity increased by £4m.” The group revealed that reinvestment in the business has seen the group’s total net worth rise by 12.6%, from £12.1m to £13.7m. Over £1.9m was invested in new equipment in the year, with Meachers committed to spending a further £2.1m on new vehicles in the current financial year.

Travis Perkins opts for Zenith Zenith has landed a five-year fleet management contract with building materials giant Travis Perkins covering the group’s fleet of 1,600 HGVs, 800 vans, 300 cars, 250 truck-mounted forklifts and 250 trailers. The new partnership, which will involve a full, phased transfer from the existing provider, will cover service, maintenance and repair for the group’s light and heavy goods vehicles, as well as cars, plant and ancillary equipment. Travis Perkins said Zenith was selected in a competitive tender based on its overall value, including the ability to provide more overnight servicing, up to 30%, which the group said will minimise downtime and improve availability.

Fox Brothers eyeing acquisitions with £70m funding package Haulage and plant hire company Fox Brothers has received a £70m funding package from two banks to increase its fleet and pursue acquisition opportunities. NatWest and HSBC UK have provided the asset-based lending (ABL) facility to the North West

4 MotorTransport

business to enable it to ‘future proof’ its position in the sector. Paul Fox, chief executive at Fox Brothers, said: “This ABL funding from NatWest and HSBC is a welcome development to our business, as we embark on the next phase of our journey. We are keen to enhance our long-standing position within our industry. “The ABL will give us extra security when we scope out new acquisition opportunities in the near future.” Fox Brothers is a fourth-generation family-run company, with 850 employees across all parts of its business and 32 sites across the UK.

NEW LOOK: (From left) Neill & Brown chief executive Peter Brown with Stuart Dean, Colin Moody, Carl Andrew, Dominic Yeardley and Paul Allon

Board shake-up at Neill & Brown Neill & Brown Global Logistics has made the largest change to its board in four decades with the appointment of three new directors as part of a long-term succession plan. Longstanding employee Stuart Dean has been made portable movements operations director. He joins the board along with newcomers Paul Allon, who has been appointed the company’s finance director, and Dominic Yeardley, commercial director. The trio join chief executive Peter Brown, MD Colin Moody and logistics director Carl Andrew at the Hessle, East Yorkshire firm. Finance director Ian Halder will retire after 13 years at the company. 6.11.23

Business barometer

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The OECD and IMF say the UK economy may grow next year – but it’s not really worth cheering

Stuck in the slow lane

Haulage rates

Typical haulage rates in Q3 were 0.6% lower than in Q2, according to data published last month by the Office for National Statistics (ONS). Although modest, this is the fourth successive quarterly decline detected by the ONS. 6 MotorTransport

Oil and fuel

In the last Business Barometer (MT 11 September) we reported that Brent crude oil was widely expected to stay close to its thencurrent level of $86/barrel for the rest of this year. That forecast quickly turned sour. The oil price moved up sharply in early September, driven by continued production caps

IMF OECD

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After making steady upward progress during the spring and summer, the pound has been going through a difficult few months, losing value against some key currencies. The most important of these is the dollar. The pound’s monthly average value in October was $1.217, equating to a drop of 5.5% from its July peak. The reasons are not hard to fathom. US inflation is already far lower than the UK’s and the US economy is expected to continue to grow more quickly, so investors see more upsides in the dollar. The loss in sterling’s value has contributed to the steep rise in diesel prices since the summer. Sterling’s value against the Chinese yuan renminbi has also fallen, down by 4.4% from its July peak. This is another significant figure, given that China is the largest source of the UK’s imported goods. The pound has proved to be more resilient against the euro, with its October average value of €1.152 only 1.1% below its recent peak monthly average in June.

7.0

Sterling

2024 GDP GROWTH FORECASTS % change on previous year

It means rates are now 1.9% below their all-time peak in Q3 last year, when they leapt by 3.9% in a single quarter. This latest quarterly decline goes against the trend of rising costs faced by operators. For example, typical average bulk diesel prices during Q3 were around 10% up on Q2. The rate decline also runs counter to the rise in the Services Producer Price Index (SPPI). This ONS index tracks costs of a plethora of services bought by UK businesses. The SPPI rose by 3.4% between Q2 and Q3, with transport and storage services identified as the only sector helping to lower businesses’ costs on both a quarterly and an annual basis.

HAULAGE RATES Change on previous quarter %

Two recent authoritative economic forecasts for 2024 make uncomfortable reading for the UK. The International Monetary Fund (IMF) published its World Economic Outlook last month; the Organisation for Economic Co-operation and Development (OECD) put out its report in September. Our chart depicts some of their projections for gross domestic product (GDP) growth next year. The IMF reckons the UK economy will grow by 0.6%; the OECD says 0.8%. To put those into perspective, both figures are slightly better than we are likely to see this year – the latest projections for 2023’s GDP growth are 0.4% to 0.5%. Nevertheless, they are way below the UK’s long-term average annual growth of 2.3% in the 50 years until the end of 2019, when Covid-19 skewed the data. The eurozone’s economy is expected to outstrip the UK’s, with both the IMF and OECD projecting growth of just over 1.0%. In fact, none of the 38 European countries covered in the IMF report has a lower 2024 growth forecast than the UK. Only Sweden is on a par, at 0.6%. The IMF and OECD believe world economic growth will be sluggish next year, handicapped by persistent inflation and the slackening in the ferocious expansion of Chinese demand. Both organisations have downgraded most countries’ growth projections since their previous forecasts, made in the summer. However, the IMF and OECD now see the US economy expanding more quickly than previously thought. China’s forecast growth looks comparatively healthy but falls a little short of this year’s figure, which is expected to come in at around 5.0%. India continues to set the pace in 2024, expected to see growth of 6.0% or more.

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POUND-DOLLAR EXCHANGE RATE $1.4

$1.3 £1 buys...

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imposed by Saudi Arabia and Russia. The Gaza-Israel conflict has had predictable repercussions on the oil price, based mainly on the risk that the situation could escalate to involve other countries, notably Iran. Despite remaining under US sanctions, Iranian oil contin-

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ues to find its way onto the global market. The net result is that Brent oil was trading close to $90/barrel for much of October. Operators have now seen four successive months of rising fuel prices. Typical bulk diesel prices in October were around 20ppl up on their June average. n 6.11.23

Viewpoint

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Fairer PSS checks needed T

alking to Brigade recently about their MT Award-winning Radar Predict collision warning system (see p22 of this issue) it is clear just how much R&D and high-tech equipment has gone into producing a system that will comply with the complexities of TfL’s Steve Hobson upcoming Progressive Safe System. Editor Whatever your views on the costs and Motor benefits of TfL’s increasingly convoluted Transport requirements for trucks to be fitted with more and more cameras, detectors and bleepers before being allowed onto the streets of London, it seems unlikely that anyone can stop the tightening of the Direct Vision Standard in October 2024. Whether there are enough qualified fitters to install the kit is a separate subject that Logistics UK and the RHA are debating fiercely with London Councils,

which is the body ultimately responsible for implementing the standard. But there is one elephant in the room that everyone seems to be ignoring – who certifies that the equipment being fitted will actually do the job? Brigade has spent not inconsiderable sums getting its new product independently tested but there is no requirement in the DVS to do so. Tales abound of people buying cheap imported systems on eBay and doing a DIY installation, just so they can submit the photos required by TfL. It isn’t exactly a level playing field if responsible operators spend the money fitting top-quality equipment that actually works if competitors are allowed to go for cheap ‘n’ cheerful alternatives.

Hybrid model can share out your risk T Scott Robertson Co-founder HaulageHub

his year has been one fraught with challenges – the increase in interest rates has seen the cost of trucks rise significantly over the past 12 months, increasing overheads for all haulage providers. The precarious finances of many firms has further highlighted the risk involved should trucks not hit their daily revenue targets. Furthermore, if a vehicle is being under-utilised, it would normally mean that it is probably doing a lot of empty miles, adding unnecessary costs running between delivery point and next collection and producing unnecessary CO2. Such issues are brought into even sharper focus in the busy Christmas season, followed by the traditionally fallow period at the start of a new year. Consequently, more and more companies are adopting the hybrid carrier model as a means to address this. These operate their own trucks, trailers and drivers, in addition to their own digital freight marketplace to subcontract volumes to approved partners. At HaulageHub, we’ve developed a white-label product that’s already been taken up by the likes of Menzies and WS Transportation to address this issue, while improving their environmental and economic outputs. There are a number of reasons why the hybrid carrier approach is becoming more popular. Our technology allows the creation of a model to fit every type of fleet size and budget. It allows flexibility to meet greater demand without having to bring on

8 MotorTransport

additional trucks and drivers. A carrier can react quickly to surges in demand without delay, meaning that there is no standing or idling fleet prior to, or after, the Christmas period. This means a more profitable peak due to all the subcontract partners being in one place. Another key benefit is that hauliers can create ‘total ownership’ of key customer accounts by giving their customers the assurance of managing all of their volumes in one place rather than having to have multi-agreements in place with multiple hauliers. Crucially, this is achieved during peak times with the additional flexibility and capacity that a digital freight marketplace can bring. There are also significant cost benefits of operating a hybrid model. For example, if a carrier can successfully manage peak periods without the cost burden of bringing on more trucks and drivers of their own, they can reduce the risk this brings to profitability during quiet periods. Sustainability benefits are also created from reduced empty running. A hybrid carrier can operate the lanes that fit its own network on its own trucks, whilst any deliveries to regions outside of preferred destinations can be subcontracted. This will result in more loaded miles and less empty ones, meaning less CO2 production and lower fuel costs.

The newspaper for transport operators

To contact us: Tel: 020 8912 +4 digits or email: name.surname@roadtransport.com Editor Steve Hobson 2161 Head of content Tim Wallace 2158 Events and projects editor Hayley Tayler 2165 Group production manager Isabel Burton Senior display sales executive Barnaby Goodman-Smith 2128 Event sales Tim George 0755 7677758 Classified and recruitment advertising rtmclassified@roadtransport.com Sales director Emma Rowland 07780 604075 Divisional director Vic Bunby 2121 MT Awards Katy Moyle 2152 Managing director Andy Salter 2171 Editorial office Road Transport Media, First Floor, Chancery House, St Nicholas Way, Sutton, Surrey SM1 1JB 020 8912 2170 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 RoadTransport@abacusemedia.zendesk.com 020 8955 7034 Motor Transport Subscriptions, Abacus, 107-111 Fleet Street, London EC4A 2AB Rates UK £156/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 © 2023 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 6.11.23

Alternative fuels: hydrogen

Cinderella technology begins to find love

Trucks powered by hydrogen internal combustion engines have been excluded from the government’s zero emissions trials but moves are afoot that could see it come in from the cold. Carol Millett investigates

What’s in a name?

MORE POWER: Westport Fuel Systems claims its H2 HPDI engine offers 20% more power and 18% improved torque compared to a diesel equivalent

ill trucks powered by internal hydrogen combustion engines (H2 ICE) ever be invited to the zero emission ball? Right now the technology is something of a Cinderella, as shown by its recent exclusion from the £200m Zero Emission Road Freight Demonstrator – now renamed Zero Emission HGV and Infrastructure Demonstration – trials. Whilst OEMs race to develop hydrogen fuel cell (HFCV) and battery electric (BEV) vehicles, there are far fewer suitors for H2 ICE, despite it offering a cheaper and more familiar option than its two expensive and problematic sisters. So why has this relatively simple low-carbon technology been left in the shadows? Jürgen Nadler is chief marketing officer at Keyou, a German company specialising in H2 ICE. He says the current situation has its roots in decisions made over a decade ago, giving BEVs and FCEVs a development lead of around 10 years. “Electromobility has been promoted politically and financially since the end of the financial crisis in 2008, with emerging pressure from China and the influence of Tesla and Elon Musk,” he says. “In recent years, billions have been invested in the development of battery electric drives in particular. Large OEMs are usually guided by these subsidies and are accordingly moving in the same direction. “However, since the CO2 targets for commercial vehicles were significantly tightened in 2019, OEMs are well aware that these targets cannot be achieved with battery and fuel cell drive alone. “As a result, many major OEMs are now also officially working on hydrogen combustion and some as a submarine project.” That may be the case in the EU, but in the UK interest in H2 ICE is stymied by the lack of clarity around the government’s classification of this technology. While the

STORAGE SOLUTION: An Element 2 hydrogen storage container being lifted into place

10 MotorTransport

EU rates H2 ICE as zero emission the UK has yet to issue a clear ruling on this. Zemo Partnership chief executive Andy Eastlake wants to see greater clarity from the UK government. He says: “The exact definition of what is regarded as a zero emission vehicle is critical for the mobility industries and, in the view of Zemo, must be consistent and understood. “The plethora of different definitions and possible interpretations of what zero emissions means is not helpful to the market,” he continues. If the UK government does fall in line with the EU’s definition it could cut the cost of transitioning fleets considerably, since the technology is based on the existing ICE, requiring little change to OEMs’ production facilities and supply chains. According to research by engine manufacturer Cummins, by 2027 FCEVs and BEVs will cost 100% and 120% more respectively than their diesel equivalents. This compares to only 50% more for an H2 ICE truck. Nor do H2 ICE trucks compromise on power or payload. In fact, Canadian engineering giant Westport Fuel Systems boasts its H2 HPDI engine offers 20% more power and 18% improved torque compared to a diesel equivalent, and delivers greater efficiency at higher loads than FCEVs. Another attraction is the familiarity of the technology, which is welcome news to mechanics and drivers. The rise in H2 ICE retrofitting solutions could also be a significant development, offering operators substantial cost reductions, making H2 ICE trucks much more available to smaller fleet operators, and providing a more sustainable solution than producing millions of new zero-emission trucks from scratch. 6.11.23

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Cummins recently exchanged a Mercedes-Benz Atego 4×2 truck’s diesel engine for a 6.7-litre H2 ICE engine, reporting that the swap had not compromised performance, cargo capacity or payload. Closer to home, Derbyshire-based plant manufacturer JCB recently installed one of its H2 ICEs into a 7.5-tonne Mercedes truck “in a matter of days”, as well as retrofitting an H2 ICE into a Mercedes Sprinter van.

Quick change

Another exciting development is Keyou’s retrofit solution, which can modify a truck’s existing ICE to become a low emission H2 ICE. Road trials with German hauliers of eight prototype trucks, based on the Mercedes Actros chassis, are set to begin in the next few weeks. Keyou’s hydrogen technology was developed using conventional diesel and compressed natural gas components as a base. Other common components include the engine’s injection and ignition systems, as well as software for the engine control unit. Nadler says: “During the conversion, existing diesel platforms are modified, which means that about 80% of the original engine remains the same and only about 20% is modified. One of the great advantages of this is, of course, the high cost efficiency.” Whilst Keyou’s focus is currently on the 4- to 15-litre engine range, Nadler says the technology can be easily scaled, regardless of a diesel engine’s size. Running costs also promise to be significantly lower, says Nadler, particularly in the 40-tonne range, as diesel costs increase and the price of hydrogen falls as demand increases. He adds: “We are in close exchange with the OEMs as potential partners and are already working closely with them. Since OEMs are only interested in the market for new vehicles and our business model is based on existing vehicles, there is no competitive situation here. At the same time, the OEMs are glad that we are preparing the market and making it H2 ready, thus doing important groundwork.” With these developments emerging, it is not surprising that interest is mounting among OEMs. Several manufacturers have announced investments in H2 ICE, including DAF, Cummins, Scania in joint venture with Westport Fuel Systems, MAN, Volvo, Daimler, Toyota, and Chinese OEMs Weichai, Yuchai and FAW. Westport launched its H2 HPDI combustion engine at the IAA show in Hanover last September, causing a stir among OEMs and fleet operators. Westport’s former chief executive David Johnson summed up its attractions at the launch, saying: “We like to think of it as a game changer without the change.” David Mumford, Westport senior director of HPDI product and strategy, told MT that there are a number of OEMs interested in the product, including Scania. “We have several current OEM testing programmes, with collaborations on a number of additional proprietary programmes,” he said. The company also recently conducted a road test of its H2 HPDI engine in Madrid, Spain, where it was fitted into a prototype truck and used to haul a refrigerated trailer delivering fresh food to Mercado supermarkets. German engineering giant Bosch is making headway too, preparing to launch its H2 ICE next year alongside hydrogen fuel cell vehicles. The company says it has four orders for production products so far, from all the major economic regions, and is boldly predicting six figure volumes by 2030.

In the mix

Chris Ashley, RHA head of policy for environment and vehicles, believes hydrogen combustion must play a part in the zero-emission fleets of the future and is hopeful the government is for turning on this issue. 6.11.23

SUCCESS RESTS ON THE RACE TO GREEN PRODUCTION One major challenge facing hydrogen-powered trucks is the cost and low availability of green hydrogen made from renewable energy. Making hydrogen from green electricity is currently expensive and far less energy efficient than charging vehicle batteries. The Centre for Sustainable Road Freight (CSRF) estimates that switching all diesel trucks to batteries would need 10.6GW of electricity – roughly the output of 900 large offshore wind turbines. But it argues that switching all diesel trucks to HFCVs would require 35.6GW of electricity to make the hydrogen and switching to H2 ICE trucks would require more than four times as much green electricity, because so much is lost in the process of making hydrogen from electricity. CSRF director Prof David Cebon tells MT that producing green hydrogen is neither economical or sustainable. He says: “A fuel cell vehicle costs three times more than a battery electric vehicle to run because it requires three times more electricity to generate green hydrogen. And if you run an H2 ICE vehicle, that number goes up to 4.3. So the cost of running the H2 ICE truck is multiplied by almost four and a half times. It doesn’t make sense.” Cebon’s advice to operators is to plump for BEVs and use them on their urban and regional routes, while waiting for battery technology to develop lighter, denser and more powerful units for long haul. “This is a transition that is going to take 20 years. We need to build the technology. But in the meantime using BEVs will help build the supply chains, bring down the cost of batteries, add charging stations to the network, and speed up the transition.” However, advocates of hydrogen argue that the cost will continue to fall as the technology improves. Tim Harper, co-founder and chief executive of Element 2, which is building a national network of hydrogen refuelling stations across the UK and Ireland, says: “The cost of hydrogen depends on how you produce it. So, if you hooked up an electrolyser to the grid, without any sort of power purchase agreement in place, that would be quite an expensive way of producing hydrogen. But that is not how it works. “There are many other ways of creating green hydrogen more cheaply, such as using offshore wind, which produces curtailed electrons that cannot be put into the grid as there is no demand for it, making it incredibly cheap. “There are also economical ways of producing it from water treatment, from waste and plastics recycling. “Let’s face it, there wouldn’t be all of these people around the country trying to make green hydrogen if there wasn’t a market for it.” He concludes: “You also have to remember that in the transport sector we are competing with the price of diesel and the cost of that is going up and will continue to go up, whereas the price of green hydrogen is going in the opposite direction.” DIG THIS: Plant manufacturer JCB is at the forefront of H2 ICE innovation, recently swapping its power unit into a Mercedes 7.5-tonner “in a matter of days”

He says: “The EU has carefully worded its definition of zero-emission vehicles so as not to rule this technology out and the language behind the government’s approach to hydrogen combustion engines is softening. So we are hopeful it is moving to do something similar. “It is too early to rule this technology out. The market needs to be given the chance to innovate. We would like to see the government send out a clear message that it will allow some flexibility in the zero-emission regulations to make sure logistics continues to work as efficiently as it does now. We must not throw the baby out with the bath water.” Perhaps the industry is about to find out that the zeroemission slipper is a perfect fit for the H2 ICE. n MotorTransport 11

TIP Group

Evolution revolution Multiple owners and a series of acquisitions have kept life interesting at TIP Group. But the rental and leasing giant goes from strength to strength, as Steve Hobson reports

ike Furnival has been MD for the UK and Ireland region of TIP since May 2015, having joined the company as an area sales manager in 1988. Since then the company has been through several changes in ownership, including 20 years as part of GE and five years owned by Chinese conglomerate HNA. In August 2018 it was acquired by private equity asset investor I Squared Capital for €1bn (£860m) which, according to Furnival, has no plans to sell the business. TIP started out in 1968 in the Netherlands as Transport Pool, pioneering the concept of trailer rental. It was renamed Transport International Pool during the 1970s to reflect its growing presence in international markets

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and by the mid-1980s it owned 14,000 trailers across Europe. At one point its global trailer fleet peaked at 135,000 units, but in 2013 GE sold the business to HNA. Ten years on and the company has changed its name to TIP Group, now describing itself as a “market leader in providing transportation and logistics customers with rental, leasing and value-added equipment services, keeping its customer’s freight on the move all over Europe and Canada”. TIP Group covers Europe from Ireland to Ukraine from its headquarters in Amsterdam, and also has a substantial trailer rental business with 30,000 assets in Canada after merging two acquisitions, Train Trailer Rental and Trailer Wizards. TIP’s trailer fleet had been allowed to age under GE’s ownership, but the move to HNA in 2013 saw a significant investment in renewing the fleet and a move into truck contract hire in 2015.

Origin story

When MT spoke to Furnival in 2014, a year after the acquisition by HNA, he predicted a move into truck hire in the UK, saying it was looking to “add a small-scale truck rental offer, probably through a joint venture rather than by acquisition”. A year later TIP acquired Hull-based trailer rental firm Grayrentals, a £20m-a-year business that included refrigerated trailers and a small fleet of trucks. “Our truck business has been something of an evolution to be honest,” Furnival told MT in July 2023. “There wasn’t a grand plan for truck. Our growth has been a mixture of acquisition and organic. Out of the £310m we will do this year, about £80m is due to the business acquisitions made. “When we bought Grayrentals they had a couple of hundred trucks. It was owned by Robin Gray and Terry 6.11.23

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Moody. Terry still works for us, seven days a week and rarely takes a holiday. He said ‘the truck market can be brutal but we have built it slowly, provided decent RVs and largely avoided the short-term rental market’. “During this time Terry and the Grayrentals team have grown the truck business significantly to contribute approximately €85m revenue this year. I started out in trailers with TIP in 1988 so I’m a trailer guy, but I have been educated to understand trucks better over the past five years. More importantly, we have recruited some good guys who really understand trucks and we keep it commercially separate from trailers.” TIP’s other acquisitions include Scottish rental operator D&M Trailer Services in October 2014, Bell Trailers in the North West and South Wales rental firms Aim Hire and PADS Trailers in 2016. Then followed Leedsbased specialist HGV rental business Eurotrail UK in 2021 and the Ryder trailer leasing and maintenance business in 2022, which brought a further 3,550 trailers and a workshop in Lichfield as well as a 60-strong mobile technician workforce. “The best thing is that we retained the key management from those acquisitions. Apart from Terry, D&M’s Dave Henderson still runs our Scottish workshop and Chris Butt of Aim runs our commercial team in the south,” Furnival says. “In 2014 we were a £34m-a-year business and we will generate around £300m this year. “Back in 2014, our fleet was showing signs of age as the investment from GE ground to a standstill. However, the new Chinese owners were very supportive and there was a really simple process to support their strategy. “In the first year they asked us what investment we needed to provide them with a decent return. We strategically invested in the fleet and started buying small- to medium-sized regional companies, whilst building organically on the loyal customer base we already had. The Motor Transport Top 100 list was our bible! That went on for four successful years before they sold us to ISQ in 2018.”

ALL CHANGE: TIP recently began used truck and trailer sales at a new Warrington site (above), giving it the ability to refresh its fleet in the most cost-effective way

Forward planning

Furnival is equally glowing in his praise for I Squared. “These guys have pretty much left us alone and continued where HNA left off,” he says. “They understand infrastructure businesses and as long as we give them a robust plan – and deliver it – they are great.” Globally TIP turns over €1.1bn (£940m), so the UK represents a third of group revenue. “We are a significant player in the group,” says Furnival. “We have 22,000 trailers on fleet in the UK and Ireland and around 3,000 trucks. Those are assets we own but we also look after 17,000 trailers owned by other operators, including some of the biggest names in the industry.” While the bulk of the TIP trailer fleet is dry freight, it remains strong in tankers and is growing its refrigerated capacity.

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WARM WORDS: UK and Ireland MD Mike Furnival says past and present owners HSE and I Squared have been a driving force in TIP’s recent progress

“Out of the 22,000 trailers we still have 5,000 reefers so we have a lot of fridges out there,” says Furnival. “But approximately 40% of the fleet is curtainsiders and we have always been strong in the parcels sector with box vans. The chassis fleet is the most challenging currently, driven by tough market conditions in the container world. “Lead times on curtainsiders and box vans have stretched out again to 16 to 20 weeks, which is OK. However, niche products like double-decks are still on extended lead times from the specialist manufacturers.” When it comes to reefers, TIP is trying out a range of alternatives to traditional diesel-powered fridge units including diesel/electric hybrid units and kinetic axles. “I don’t think any of them are completely proven just yet,” Furnival says. “We are also working closely with solar panel developers and that space is certainly gathering technical momentum. “We will certainly buy some electric fridges in Q4, put a residual value on them and take a risk. We are in the risk business and have to be at the forefront of the technological developments taking place.” TIP still buys most of its trailers from local manufacturers in the UK and Ireland, whilst also having global agreements with some larger European partners. “Our customers drive much of our procurement strategy, meaning we deal with just about all manufacturers,” says Furnival. “SDC is an important partner but we have a healthy relationship with many others. Indeed, we have just bought some tippers from Wilcox after a gap of many years. TIP will probably buy in excess of 2,000 trailers this year and more than 820 trucks.”

Light green

While Furnival is keeping a close eye on electric vehicles, which he says are taking off faster in Germany where the subsidies are higher than the UK, “very few” of the new trucks TIP is buying this year will be electric. “They are really trial units and no one is yet saying ‘we will have 40 of them’. Everyone is saying ‘we need to keep going with diesel for the time being’. There is no government support and there is nothing on the horizon.” Furnival has followed Moody’s advice and steered clear of short-term truck rental. “Ideally the minimum term is three years,” he says. “But when these things come off long-term contracts you sometimes have to support people with rental and that is where we are different. “When trucks come off contract we wouldn’t automatically send them to the auctions. We look at what is coming up for our other customers and where they have gaps and roll them in to make sure we can service customers before we dispose of them. It’s a healthy business.” Furnival says that TIP remains different from its competitors “in a couple of ways”. “We still carry a huge short-term trailer fleet and nobody else does that,” he says. “They just want contract hire ➜ 14 and that’s fair enough. MotorTransport 13

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Photo: Nigel G Waller

TIP Group

“However, because of the customer base we have we can’t walk away from their requirements, and because we’ve been in business 55 years we have built up a substantial land bank that enables us to cope with peak volatility. “There remains a variety of rental spikes throughout the year and we will be putting more than 1,000 extra units out over the next couple of weeks to satisfy those customer needs. The other difference is that we still employ our own technicians. That is a massive advantage for us and helps to win business because we are in control of our own destiny.”

CLASS APART: TIP Group has created its own Mechanic Academy to meet an increased need for technicians, operating out of a purpose-built facility in Nuneaton (above right)

Tooled up

Out of TIP’s 26 UK sites, 17 have full workshop facilities including ATFs and it also runs workshops for customers on their sites. Nearly half of TIP’s 640 staff are technicians, and 40% of those are van-based mobile workers. “We have a significant technician population who are really important to our success,” says Furnival. “They look after our own and our customer’s trailers. At times they even look after some of our competitors’ trailers.” Around 40% of TIP’s technicians are trained to work on trucks and while they can do minor repair and maintenance jobs, more complicated work is done by dealers.

To overcome the HGV driver shortage, transport operators had to significantly increase wages – and TIP has had to do the same for its technicians. “We have had to respond to intense inflationary pressure,” says Furnival. “It’s been unavoidable. What we’ve also done – without any governmental financial assistance – is start our own mechanic academy. “We are bringing in people with limited experience but who do have an aptitude and an interest in the industry, and we will fast track them in nine months to Irtec accreditation. We have built a site in Nuneaton and started on 4 September with the first pilot intake of 12. We are looking at opening further sites in Manchester and the south of England to replicate the initiative. “We simply have to do it because the amount of people with the required skills just aren’t there and we have to get more people interested in what we are doing and the industry as a whole.” In June 2023, TIP’s latest acquisition, CEM Scotland in Coatbridge, added another trailer maintenance unit to group capacity and Furnival says he is happy with his R&M capacity “until the next project comes along”. As well as rising staff costs, TIP has been affected by rising interest rates, higher energy prices and the substantial hikes in the cost of new trucks and trailers, and it has been in discussions with customers about the need to pass at least some of these on. “Most have been pretty understanding,” says Furnival. “Our customer base has been pretty successful at passing on its own inflationary costs so they get where we are. But having a conversation about passing on our 40% increase in costs is obviously challenging. “However, we have strong enough relationships to explain our own issues and find a solution we are all happy with. We have passed some increases on but we have also had to absorb some within our margins.” n

ROLLER BRAKE TESTING FOR TRAILERS ‘A NIGHTMARE’ FOR ATFS The DVSA’s ‘Guide to maintaining roadworthiness’, updated in April 2023, says that from April 2025, “laden roller brake tests or electronic brake performance monitoring systems (EBPMS) will, with some exceptions, be the only accepted methods for brake testing”. The DVSA also says: “To prepare for this change, we strongly advise that a laden roller brake test is carried out at every safety inspection.” With 39,000 trailers under management in the UK, this requirement is going to cause TIP serious problems. “We are getting lots of questions from transport companies asking what we are doing about these changes,” says Furnival. “The big question is where is the infrastructure to facilitate such frequent roller brake tests coming from? While TIP has a large network of workshops, supported by our authorised service providers, we would struggle to accommodate multiple roller brake tests for every trailer that belongs to all our customers. “Regardless, the majority of inspections are completed by mobile service units on customers’ sites and it doesn’t make sense to have trailers visiting workshops solely for the purpose of carrying out a roller brake test. It’s just not feasible and, if nothing else, extremely unkind to the environment to have thousands of trailers on the move to get tests. We have written to the powers-that-be to express our thoughts. As the largest provider of trailers in the country, it’s a pity we were not consulted beforehand.” Fortunately for TIP it has its own EBPMS, which offers an 14 MotorTransport

accepted alternative to carrying out multiple roller brake tests. BrakePlus, launched in early 2021 and developed in collaboration with braking and suspension electronics specialist ZF (formerly Wabco), is now fitted to around 10,000 trailers in the UK for the purpose of continually monitoring braking performance. “We see having EBPMS fitted to trailers as a viable way of addressing the forthcoming changes, as its users only need to have the one roller brake test per annum and that can be done at the time of the annual test,” says Furnival. “BrakePlus is now established in the marketplace and many of our customers are benefitting from having it fitted, including on their owned trailers.”

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MT Awards 2023 winner profile Innovation Award Using radar as the basis for its aftermarket Progressive Safe System was a stroke of genius from Brigade Electronics, and will go a long way in helping operators meet TfL’s new Direct Vision Standard

Safe and sound B

rigade Electronics secured the 2023 Innovation Award for its ground-breaking Radar Predict collision warning system designed to minimise the risk of incidents involving vulnerable road users (VRUs) – such as cyclists and pedestrians – and HGVs. Our panel of expert judges said: “This is a great product and a solid entry. Radar Predict has the potential to greatly reduce all risks around the vehicle. It provides more confidence to drivers and ensures legislation like DVS is met.” Brigade’s mission statement is ‘We are in the business of saving lives’ but, as the judges pointed out, a key driver for developing Radar Predict was also the impending tightening of TfL’s Direct Vision Standard in October 2024. This will require trucks over 12 tonnes GVW to either have a three-star rating or be fitted with an aftermarket Progressive Safe System (PSS) as part of the mayor’s ‘Vision Zero’ of eliminating deaths and serious injuries from road collisions on London’s streets by 2041. A key requirement of the PSS will be that it must detect VRUs on the nearside (left-hand-drive vehicles must have the system fitted to the offside) and actively warn the driver if a collision is likely. It must be intelligent enough to differentiate between street furniture and people to avoid so many false alarms that drivers are tempted to disable the system (the DVS does not permit an ‘off’ switch but drivers will always find a way if warnings become too distracting). The other big challenge was that the system must cover the full length of trailers on artic and drawbar rigs as well as the truck. It must also

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work even if the driver does not use the left indicator, as previous side scan systems only activated when the driver indicated left – sometimes meaning drivers would turn without indicating to reduce the number of alarms.

Vision on

Thierry Bourgeay, Brigade’s passionate senior product manager, explains how he and his “amazing” product development team solved this tricky problem. “When TfL released the PSS proposals, it included articulated lorries and that was impossible to achieve with the technology we had,” he says. “We looked at the VRU collision data for London and replicated them in 3D to see if we could develop a system to avoid most of these types of accidents. “An artic is clearly a bigger and so more dangerous vehicle in London than a rigid truck and this was the gap they wanted to address.” It quickly became apparent that, because tractor units can swap trailers frequently, sensors could not be mounted on the trailer and the whole system must be on the cab. An added complication was that the second version of the EU General Safety Regulations (GSR 2) is coming into effect in 2024 and Regulation 151 specifies that a side-scan system must be fitted to every new truck by the vehicle manufacturer – but with slightly different parameters from the DVS (see box). Because both the GSR and PSS are intended to warn drivers of impending collisions rather than automatically apply the brakes (as in automatic emergency braking systems), the areas covered have been calculated to give the driver enough time to react to an alert – generally considered 1.4 seconds. 6.11.23

Partnered with

The system must also be intelligent enough to calculate the relative velocities of an approaching cyclist and the truck and only alarm if a collision is likely. That means the Brigade Radar Predict system is scanning 30m behind the cab and 7m in front to detect VRUs in enough time to calculate the likelihood of a collision. Brigade’s previous generation of side-scan systems used ultrasonic detection, but it was obvious to Bourgeay that this technology would not be able to meet the requirements of the PSS. “How could we scan 30m behind the truck and 7m in front?” he asks. “Lidar [light detection and ranging] is too expensive and ultrasonics’ maximum range is 2.5m. So you are left with cameras and radar. “Cameras using artificial intelligence are great but they need so much processing power that the processing unit would be too big and costly. With radar you don’t need this advanced technology. If it looks like a human and walks like a human, it must be a human.”

Solutions made simple

So Radar Predict was born and, while it is intelligent, Brigade doesn’t say it uses AI – its algorithms are preprogrammed so it cannot self-learn from experience and change its own parameters. But Bourgeay and his team had another problem in that radar can only scan 90 degrees whereas the PSS requires 180 degrees so the system looks in front of and behind the cab. The answer was relatively simple – use two radars mounted side by side in a single compact unit. “The next challenge was how does the system know for sure if what it detects is a pedestrian, a cyclist or a scooter? We optimised the algorithm so we could be confident it correctly classified the object being detected – and even if it wasn’t 100% correct it would still alert the driver,” says Bourgeay. In 2020 the automotive market switched from 24Ghz to the higher definition 77GHz radar for its detection systems. “The 77GHz radar can see further away and is super-precise,” says Bourgeay. “New cars probably have 20 of these radars so the price was going down and it started making commercial sense to use it.” The next issue when it came to calculating the probability of a collision between objects detected and the truck was knowing the speed and direction of the truck itself without taking data from the vehicle Canbus. While Controller Area Networks (Can) are supposed to be standardised across the industry, each manufacturer uses them slightly differently, so this was not an option for a system that had to be easily installed in any vehicle. The other option was to rely on GPS, but London’s tall buildings mean the signal is far from reliable. “GPS is pretty good so we went for it,” says Bourgeay. “But sometimes you don’t have a GPS signal so the algorithm can’t detect a collision. The radar is always looking at static objects so we can deduce the speed of the vehicle relative to those. If the GPS dies off we have sufficient information from the radar to calculate vehicle speed. We also installed gyroscopes and accelerometers, and with all this data mashed into the algorithms we can accurately predict collisions. Eureka!” The in-cab display gives drivers three levels of warning – solid amber, which indicates a VRU is in the area covered by the system, a flashing amber if the vehicle begins to turn towards the VRU and a flashing red with an audible alarm if a collision is imminent. “If the driver 6.11.23

hears a noise he knows he is trouble” says Bourgeay. Another benefit of Radar Predict is that it is plug and play, a real advantage when installers are going to be under huge – some say impossible – pressure to meet the October 2024 deadline to fit a PSS to over 200,000 affected vehicles. As well as protecting VRUs, Bourgeay is also concerned about truck drivers and the devastating impact a serious incident can have on them, especially with lots of new recruits being drafted into the industry. “The experienced drivers know what they are doing,” he says. “But I feel for the younger drivers – I would not want to drive an HGV in London. If we can give them a bit more confidence then that is my job done.” Bourgeay says winning the MT Award has been “lifechanging” for his team and has given the Brigade board more confidence to invest in its work. “Having the award has made my job easier,” he says. “That means we can make even better products to keep people safer on the roads. That could save lives.” He is already working on advanced AI systems that could predict what a pedestrian or cyclist may do before they have even started to move. “When a driver looks at a pedestrian at a zebra crossing, how do they know if this person is going to cross or not?” he says. “We sometimes know somewhere in our brains that this person is going to step out. This is the next level.” n

MAIN MAN: Brigade senior product manager Thierry Bourgeay says the MT Award win has given the company even more confidence to invest in innovation

DVS PSS v GSR TfL’s Progressive Safe System specifies the aftermarket equipment that must be fitted to trucks over 12 tonnes GVW that do not achieve a three-star rating for direct vision from the cab. The GSR 2, on the other hand, specifies what truck manufacturers must fit to all their homologated trucks sold in the EU (and by extension the UK as no OEM is going to build a UK-only truck). Regulation 151 of the GSR states that a side-scan system must cover an area between 0.9m and 4.25m from the side of the of truck, leaving a small gap in coverage at the side. The PSS does not allow a gap, simply saying coverage must extend 2.2m away from the side of the truck. Regulation 151 requires the area covered by the system to extend 6m behind the cab, whereas the PSS specifies an area 9m behind the cab – further on a long vehicle such as artic or drawbar. So trucks built to comply just with the GSR 2 will not in theory meet the requirements of the PSS, but TfL has said that vehicles meeting the EU standard – which will be every new truck sold from July 2024 – will be deemed compliant. Brigade has commissioned independent tests on Radar Predict to ensure it complies with the PSS and it wants this to be made compulsory as at present suppliers can self-certify their products.

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MT Awards 2023 winner profile Sustainable Transport Award

Leading from the front

Photo: Alexander Caminada

A radical overhaul of ESG policy is delivering real business benefits for EV Cargo. As well as cutting emissions, the forward-thinking approach has helped boost profitability and made the firm a better place to work for employees

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s a signatory to the UN Global Compact, EV Cargo has made significant progress in its sustainability strategy over the last two years. From setting ESG (environmental, social and governance) targets to measuring its emissions for the first time and producing its inaugural Sustainability Report, EV Cargo is clearly focused on its long-term sustainability goals. In 2022 EV Cargo cut its total greenhouse gas emissions (GHG) for Scope 1 and 2 by 29%, reinforcing its 2030 pledge to attain carbon neutrality across Scope 1 and 2 emissions and to reduce Scope 3 emissions by 25%. Our judges said of EV Cargo’s winning entry: “ESG principles and initiatives are widely embedded into the business – emissions reduction, staff training, health and safety all covered; it is pleasing to see a focus on a diverse management structure, and in a challenging market have a robust recruitment plan.”

Global outlook

EV Cargo can trace its roots back to 1963 and the creation of London freight forwarder Allports, and is now a global logistics and supply chain management business with over 100 locations in 25 countries. In the UK it has assembled a national network of 30 sites with over 2 million sq ft of warehousing with acquisitions including CM Downton, Palletforce, NFT, Jigsaw and Allport. ESG topics and targets relevant to the business are grouped under four focus areas: planet, people, governance and value creation. EV Cargo is a signatory to the UN Global Compact, committing to incorporate

its 10 principles and sustainable development goals into the core business strategy to meet responsibilities in human rights, labour, environment and anti-corruption. Over the past 24 months it has delivered big emissions reductions alongside pioneering people, culture, safety, recruitment, engagement and diversity schemes to deliver its sustainability strategy. This includes initiatives such as partnering with key customers to reduce emissions and introduce HVO fuel as a replacement to traditional diesel, creating an immediate 90% reduction in CO2 emissions from associated vehicles. Dr Virginia Alzina was appointed chief sustainability officer in 2021, bringing leadership on sustainability issues, overseeing performance monitoring, producing the company’s annual Sustainability Reports in accordance to Global Reporting Initiative standards and getting them externally assured. After completing her doctorate in environmental engineering, she worked for 28 years in Myanmar, the US, Europe and Hong Kong– where she met Heath Zarin, CEO of EV Cargo parent EmergeVest. She has worked on the United Nations’ Environment Programme and in the InterAmerican Development Bank, where she made sure that the infrastructure projects it financed did the minimum environmental or social harm. It was while she was working in Barcelona on a UN project to help clean up manufacturing industries that she saw both the environmental and economic benefits of investing in efficient processes that use less resources. “Investing in environmental sustainability was not a cost and in fact made them more profitable,” she says. The company’s executive board has full responsibility for driving sustainability practices. A sustainability committee, pulling together CEOs of all business operations and heads of central departments, ensures sustainability management and performance runs from the top and across all business functions. It has committed to reduce its emissions in line with the Science Based Targets initiative (SBTi), targeting a 4.2% annual reduction in Scope 1 (those made directly due to the company’s activities) and Scope 2 emissions (those made indirectly, by the electricity it buys, for example), and a 2.5% annual reduction in Scope 3 (made by the company’s suppliers and subcontractors). It is focused on becoming carbon neutral across Scope 1 and 2 emissions by 2030, and significantly cutting Scope 3 emissions, by working with suppliers. The company is focusing on the emissions under its direct control first, including its road transport fleet, 6.11.23

Partnered with

rather than sea and air freight where it relies on thirdparty carriers. “We are trying to use rail instead of road and use maritime rather than air transport wherever possible,” Alzina says. She believes that decarbonising the logistics sector will be essential if living standards are to be maintained while heading off catastrophic global warming. “More and more, after Covid, we have realised we want to buy online and we want to have our goods delivered from wherever in the world they are produced,” she says. “We also want them right now and we don’t want to wait for them to be consolidated and to receive them once a week. So transport is predicted to double its emissions by 2050 because of our consumption patterns. “So we really have to make an impact by switching to cleaner fuels, by consolidating our cargo and educating customers that if we collaborate with the same objectives we can make transport greener and less expensive.”

Greener road

At COP26, held in Glasgow in 2021, EV Cargo endorsed a global memorandum of understanding for zeroemission vehicles, committing to 30% of its new vehicle purchases to be zero emissions by 2030, increasing to 100% by 2040, to decarbonise its road transport operations. Partnering with customers, it has introduced wastederived HVO fuel as a replacement for fossil diesel across a range of accounts, creating an immediate 90% reduction in CO2 emissions. So far it has saved 4,448 tCO2e by switching 5.4 million delivery kilometres to HVO. The company is also looking at hydrogen and biomethane as alternatives to fossil fuels, but Alzina says battery electric trucks are not yet a practical proposition. “I think hydrogen will play a role in decarbonising heavy industry and it may be an option for transport. All of Hong Kong’s buses run on hydrogen and I am proposing that EV Cargo does a pilot with hydrogen trucks. We are considering all the options,” she says. At present, low-emissions fuels like HVO are more expensive than diesel and EV Cargo is working with customers who want to reduce their Scope 3 emissions to find ways to fund the adoption of these greener fuels. But Alzina is disappointed that so few customers are pushing their logistics providers to decarbonise. “We don’t get enough customers who prioritise sustainability,” she says. “Most still want the cheapest option.” Enhanced driver training and telematics has reduced engine idling and improved fuel-efficient driving. Leveraging technology and big data, the use of neural learning-led route planning to analyse real-time congestion and unloading data has significantly reduced miles and emissions during DC and retail deliveries. EV Cargo’s pallet network Palletforce has a sustainable operating model cutting 400 vehicle journeys daily. Along with the twinning of 20ft sea container transport from ports, co-loading LCL freight and the use of rail, EV Cargo avoided over 153,381 tCO2e and saved £8m in 2021. The fact that significant reductions in greenhouse gas, NOx, SOx and PM10 emissions can be delivered alongside savings is a driver of its strategy. The company’s intensity metric reduced from 585 tCO2e per £1m revenue in 2020 to 497 in 2021. EV Cargo’s most recent published results for 2021 saw revenue increase by 70% to £1.13bn and gross profit rise 47% to £144.5m. 6.11.23

BOXING CLEVER: EV Cargo is concentrating initial efforts on reducing its own emissions (Scope 1), and is trying to switch away from higher-polluting third-party suppliers

IN CHARGE: Dr Virginia Alzina (below) heads EV Cargo’s sustainability efforts, having been appointed in 2021

Doing better

But true sustainability is much more than merely saving the planet. Alzina studied social sciences before focusing on the environment, so is well placed to ensure EV Cargo has a robust diversity, equity and inclusion policy. The company undertakes a range of engagement initiatives, including Women Forward Lean in Circle, International Women’s Day activities and events celebrating religious and cultural festivals. The number of females in management positions at the end of 2022 improved to 73, almost 37% of senior management. EV Cargo’s commitment to people is led by culture change programme Delivering Better, creating a fair and rewarding environment for everyone to develop their careers. Over 15,000 training hours were delivered with over 900 hours of diversity training to senior managers. Line managers received structured training as part of the management development programme to deliver succession planning, while an annual employee engagement survey records year-on-year improvements. Safety culture was prioritised with a new SHEQ strategy, introduction of SHEQ training conferences, monthly depot safety reviews, random drug and alcohol testing, guidance on injury avoidance and equipping vehicles with bridge strike avoidance technology. Accidents fell by 25% and incident reporting improved, leading to EV Cargo winning a Merit in the 2023 International Safety Awards. Its Palletforce division received the ROSPA Gold Award for a 14th consecutive year. Increased coverage of mental health first aiders, initiatives like Wellbeing Wednesdays and the adoption of hybrid working practices have improved wellbeing. In line with the UN Global Compact, EV Cargo is committed to upholding the highest standards of ethical business conduct. Training is available to all employees on key compliance topics including anti-bribery and corruption. This was the first time Alzina had attended the MT Awards and collecting the first Sustainable Transport Award made it a memorable occasion. “I was very honoured to see how the judges evaluated all the different entries, and impressed by the amount of work our competitors’ have put in place to become more sustainable.” n MotorTransport 19