Motor Transport 11 February 2019

Sharp ■ Informed ■ Challenging

11.2.19

NEWS INSIDE Gig economy

Hermes addresses selfemployed concerns p3

Driving standards

UPS’s Integrad training ensures drivers deliver p4

Future proofing

Clipper goes for IVECO Stralis NPs to cut CO2

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NEW CHAPTER: Currie European Transport MD Stephen Turner has led a management buy-out (MBO) at the Dumfries firm. Turner, now the majority shareholder, has been with the business most of his working life and leading it as MD since 2010. Currie European rebranded as Currie Solutions in 2017 to better reflect the diversity of the services, but its registered name remains Currie European Transport. Its ultimate holding company, Currie International Holdings, has been acquired as part of the deal. Under the MBO Turner acquires 80% of the business and Robert Stewart from Generis Advisory, which advised on the deal, and Jim Rafferty, take 10% each. It represents an exit for owner Tom Barrie. Turner said: “I am delighted. As someone who’s lived in Dumfriesshire man and boy, it’s been a huge part of my life working with Currie, and to finally be in the position to acquire the company is a real privilege.”

New generation from Malcolm Malcolm Logistics has introduced a new generation of its award-winning extendable skeletal trailer.

The original 15.6m trailer, which is used with 50ft containers, was a double winner at the MT Awards in 2015, taking the Low Carbon and Innovation trophies.

Malcolm Logistics has now added eight of the latest versions.

While the original version used a manual winding mechanism, the new design features a pneumatically powered rear section for easy operation and robustness. The trailer weight has been reduced by 300kg compared with the 2014 model.

■ There’s still time to enter this year’s MT Awards. For more information, go to mtawards.co.uk.

Wincanton to take on Concrete Products division work from ESL from March

Eddie Stobart Logistics loses Aggregate work

EXCLUSIVE By Chris Druce

Eddie Stobart Logistics (ESL) is to be replaced by Wincanton as logistics partner for Aggregate Industries’ Concrete Products division just over two years into a fiveyear contract, MT has learnt.

The contract went live in October 2016, having been publicised in June of that year.

ESL replaced XPO Logistics, which had been the incumbent since 2008, after the deal was retendered.

However, sources close to the situation confirmed that relationship had now broken down and Wincanton would be taking over the contract from the start of March.

As part of the deal ESL drivers will be transferred under TUPE to Wincanton and all associated equipment is expected to be transferred.

MT understands that ESL and Aggregate Industries are locked in mediation over

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whether the move constitutes a breach of contract – something that could carry a multimillion pound implication. A spokesman for the aggregates company said it was unable to comment at this time.

Marketplace

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In 2016 ESL CEO Alex Laffey said the operator’s multimodal capability – it has a rail hub at DIRFT – had proved decisive in securing the contract as it would support Aggregate Industries’ Tyres

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efforts “in reducing the amount of product moved by road” and help cut its carbon footprint.

The operator had been moving finished products from the Bradstone, Charcon and Masterblock product ranges for Aggregate Industries from 14 UK sites since that date.

ESL staffed a new traffic office specifically for the contract and, in a move deemed innovative for the sector, used a significant number of curtainsiders rather than flat-bed trailers to move the product.

The partnership also provided Aggregate Industries with real-time tracking of its products while in transit.

A Wincanton spokesman declined to comment. Eddie Stobart was approached for comment but had not responded as MT went to press.

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07/02/2019 09:29:35

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NEWS IN BRIEF Europa Worldwide Group has purchased Menzies Response’s contact centre in Ashford, Kent and its warehouse in Rushden, Northamptonshire. The acquisitions will be integrated into Europa’s warehouse division, which already has facilities in Dartford, Birmingham and Northampton. It is the group’s second purchase after Continental Cargo Carriers last year.

United Pallet Network (UPN) is to relocate next year to a new facility in Fradley Distribution Park, close to its current central hub. A long-term lease will commence from January 2020 and UPN will be spending more than £2m on the facility, which is approximately 250,000sq ft. The new hub will be able to handle 11,500 pallets a night, compared with 8,500 at the current location.

Veolia ES (UK) has been fined £1m after one of its employees was killed by a reversing lorry. John Head suffered fatal injuries when he was run over by a refuse vehicle at the waste and recycling arm’s Ross Depot Waste Transfer Station in Folkestone in October 2013. An investigation by the HSE found that Veolia had failed to adequately assess the risks involved with multiple vehicles manoeuvring around the yard, and did not implement control measures.

Sir Mike Penning MP, chairman of the newly established Road Freight and Logistics All-Party Parliamentary Group, will outline the group’s aims and objectives when he addresses delegates at the Microlise Transport Conference in May. Having served as a minister in the DfT, he is an outspoken supporter of the road transport industry and has an objective for parliament and the public to understand how important it is. For more see microliseconference.com 11.2.19

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Parcel firm says it has listened to and addressed self-employed couriers’ concerns

Hermes UK wraps up ‘gig economy’ deal

By Chris Druce

The boss of Hermes UK has said he is proud and excited about a ground-breaking deal with the GMB union, which will give self-employed couriers access to holiday pay as well as guaranteed minimum earnings.

Martin de Lange, CEO of Hermes UK, told MT that it was personally important to him that the operator supported its self-employed couriers.

“I care about doing the right thing. The couriers have been at the heart of this, they have helped design it, but it is fully backed by a union too,” he said.

Developed in concert with the GMB, which was locked in a legal battle with Hermes regarding employment rights within the so-called ‘gig economy’ throughout last year, the agreement means that selfemployed couriers at the firm will from the third quarter be able to opt in to become ‘selfemployed plus’.

This status provides a number of benefits like holiday pay (pro-rata up to 28 days), and individually negotiated pay rates that allow couriers to earn at least £8.55 per hour over the year.

In addition, self-employed plus couriers will benefit from full GMB representation.

This model will be opt-in, and will not affect those couriers who wish to retain their current self-employed status.

Hermes has close to 15,000 self-employed couriers working for it off-peak and as many as 20,000 at peak. The company believes around 20% to 30% of these couriers will sign up to the self-employed plus offer.

The move will be paid for partly out of revenue generated through growth at the expand-

ing business and also by trimming the bottom line.

De Lange sees the investment as vital. “We were at risk of being seen as something bad, which was totally not the case. Some people working for Hermes simply wouldn’t have a job otherwise [due to other commitments],” he said.

“The self-employed model creates opportunity. What we have done with this is address the criticism that it doesn’t provide security. We now have the best of both worlds.”

Hermes is investing in its customer service, its infra-

structure and its IT, so this commitment to its selfemployed couriers is a continuation of that trend that saw the operator grow 15% last year, de Lange added.

“We are popular as we are good to work for and I want to make sure we retain people,” he said.

GMB general secretary Tim Roache said of the deal: “Hermes is leading the way.

Looking after the people who work for you on the ground day in, day out, is not only good for business but the right thing to do.”

AMBITIOUS DEVELOPMENT: Renault Trucks has plans for a new 122,000sq ft R&D centre in St Priest, Lyon, France. The €33m (£29m) development, designed to use 25% less energy than the French building standard, is scheduled to open in the first half of 2021. According to Renault, the new centre, one of the top 10 R&D facilities in France, is “part of an ambitious five-year building programme” launched by Renault Trucks and its parent the Volvo Group to drive innovation. The centre will be home to more than 1,000 engineering and other R&D staff.

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07/02/2019 16:44:43

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UPS’s Integrad training facility in Staffordshire is about ensuring drivers deliver the goods. By Chris Druce

Driving standards higher at UPS Burton upon Trent was once a global brewing superpower and although that heyday is behind it, the town has successfully reinvented itself, retaining its international flavour and attracting the likes of UPS. The global operator opened its only UK Integrad training facility in the Staffordshire town in May 2017, in a move echoing the same pursuit of excellence that saw the brewers of Burton take the town to international prominence in the 19th century.

The facility, located near the Clipper Logistics, Superdry and Palletforce operations in the town, is UPS’s second European site, with Cologne being the other. Worldwide there are 11 Integrad in total. The idea was born in the US in 2005 and UPS describes it as “a best in class driver training programme”.

The UK facility formed part of a $2bn (£1.5bn) investment in UPS’s European network that was spent from 2014 through to 2019.

Images: Andy Doherty, Doherty Photography

So what is Integrad?

Essentially it is real-world training for new drivers and an acknowledgement in UPS that while the driving part of the job is essential, it is only one aspect of the role. Customer service, expressly how drivers interact with customers, is also core, and something the firm believes sets itself apart from its competitors in what is a crowded field.

“The driver role [within UPS] is frontline, bread and butter stuff. It’s what we do,” Bill Murphy, manager, UPS Integrad UK, and a key member in introducing the initiative to the UK, told MT. “The role is not a typical driving job; there’s a lot more customer interaction,” he added, explaining that Integrad is not about teaching drivers how to drive but rather how to perform their role more efficiently, while looking after themselves.

The facility was a brownfield site but UPS is not a stranger to the region with a facility at East Midlands Airport; a sorting centre in nearby Tamworth;

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and a freight and contract logistics facility in Coventry. Located in Burton, it is crucially within four hours’ travel of the majority of UPS’s UK locations too.

The Burton facility is unassuming from the outside, but once inside it resembles something akin to what you might see in a Formula One garage, with a pristine, white floor and several polished UPS delivery vehicles housed in the central part of the building serving as work stations. Classroom and function rooms are at the sides of the 15,000sq ft building, which also features a mini-town test track out the back so that drivers can learn the procedures that keep both them and the public safe – the site is 100,000sq ft in total.

Integrad comprises a series of stations that students complete over the course of a week, typically with an assigned learning partner. It has the potential to train more than 1,000 students a year and Murphy is supported by five full-time instructors and a full-time site administrator.

Although you will find classrooms and conventional teaching conducted within – MT sits at a PC learning how

to work UPS’s iconic handheld device, the DIAD 5 – the idea is very much about keeping people moving.

MT gets to experience this on its visit. There is a sit-down hazard perception test at a PC that we try – and do poorly at – but many other stations are physical and have you on your feet.

One station measures the force you are putting through your knees simply by stepping out of the car (as UPS calls its distinctive vans) without the assistance of the handrail. For the average employee, based on the typical amount of delivery stops, that’s 6,491kg or three pick-up trucks a day. Multiply that by a career of years and that’s a lot of excess force that your joints and UPS as an employer would rather you avoid by simply using the vehicle’s handrail.

Walk like a penguin

While you’ll learn how to pack parcels in the specially designed vehicle racking, another station that leaves an impression, and provides a few laughs for the watching instructors, is a low friction walkway. Students – and MT on this visit – are strapped into a harness and taught how to walk along the surface, which, with a few modifications, becomes the equivalent of ice (walk like a penguin is the key to staying upright). After all, just because the weather might take a turn for the worse, UPS drivers are still expected to deliver people’s parcels.

Wellbeing is taught with warm-up stretches demonstrated and each student given their own water bottle to take between stations. There is even a shoe-shinning station because appearance is part of the professional image UPS sells as its attention to detail.

A cohort of students will typically

number 24 for the week, and they are expected to rotate around the 13 stations within the facility, which comprise a variety of learning styles and promote teamwork, self-directed learning and problem solving.

Time management

For a business focused on time-sensitive deliveries where students will have a large amount of autonomy out on the road, time management is baked into the process. There is no bell that sounds between allocated time for each station, so if a trainee runs over they’ll be delaying colleagues. Everyone needs to be in the right place at the right time.

“In the real world something might happen and you’ll need to loop around to complete a delivery later,” Murphy explained.

“We cannot teach them everything.

We are boosting their confidence and preparing them for day one, when they will be given specific driver training,” said Murphy.

While the training programme takes up most of the facility’s calendar every year, three other curriculums that focus on management training and company car users take place.

So far 700 students have graduated from Integrad in the UK – 600 of whom are drivers – and while it can be initially overwhelming with plenty of information to filter, Murphy said that he, and the drivers who go through the process, ultimately get “a big sense of achievement”.

For an industry looking to retain its best employees and showcase its professionalism, Integrad is a powerful tool to ensure that those “integral to our success” as Murphy puts it, receive the best start in their UPS journey.

11.2.19

06/02/2019 14:57:15

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07/02/2019 09:33:10

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DUTY OF CARE: (from left) Clipper transport operations director Mick Doe; Dave George, TIP; Steve Lucas, Northern Commercials; and Rory Turner, Don-Bur

IVECO Stralis NPs and longer semi-trailers could cut trunking movements by 30%

Clipper’s future fleet

By Hayley Pink

Leeds-based Clipper Logistics’ decision to align its business model to capitalise on the buoyant e-commerce market has resulted in strong organic growth and a surge of contract wins.

To complement this increase, Clipper is keen to ensure its fleet is modern, sustainable in operation and can drive further efficiencies for the business.

Transport operations director Mick Doe said: “We’re committed to doing what we can on fleet, as we are highmileage road users and have a duty of care to other road users.”

The company has introduced 11 liquid natural gaspowered (LNG) IVECO Stralis NPs to its fleet, as well as 16 uniquely designed longer semi-trailers able to carry 60 pallets. Each truck, with a range of 1,500km, is estimated to save approximately 47 tonnes of CO2 per year, or collectively more than 500 tonnes. Combined with new longer trailers, they have the capacity to reduce trunking movements by 30%.

The trucks were picked following a successful trial of a 4x2 LNG Stralis NP trunking 6 MotorTransport MTR_110219_006.indd 6

between Northampton and Glasgow on Clipper’s ClickLink operation in November last year.

“We did this to get a feel for how it worked and to get some feedback from the driver and about the refuelling process to see if it worked for us,” said Doe. “The result of the trial was encouraging. We saw a real running cost benefit from using gas against diesel.”

He added: “We also got feedback from the driver who said the vehicle was significantly quieter, smoother and he wasn’t as fatigued at the end of his shift.”

Following the successful road trial, IVECO dealership Northern Commercials was asked to provide costs for the switch to LNG. Whereas the basic lease price per gas truck was more expensive, when running costs and whole-life costs were calculated, a more positive picture emerged.

“The point where it resonates and you break even is somewhere in the region of about 75,000 miles, based on diesel price versus gas price,” said Doe. “So if you are doing mileage above this when you are trunk-

ing, then it becomes a benefit to run gas, and you can add to this the positives for the driver.”

Refuelling is a major factor in choosing which trunking routes the LNG trucks can operate on, as Clipper relies on public access infrastructure.

“We’re working closely with four or five gas suppliers to tell them what our plans are and find out what they are doing. One has got to overlay the other to make sure we can refuel the vehicle,” he said.

Coupled to the LNG trucks is an innovative double-deck 15.65m longer semi-trailer.

“We were running standard step-frame double-deck trailers with around a 42-pallet capacity,” said Doe. “We wanted to find a way to increase the capacity on the trailer that meant doing fewer miles, but that those miles would also be cleaner.”

Clipper partnered with TIP Trailer Services, Don-Bur and Northern Commercials to work on a new trailer design to boost capacity.

“The big restriction on this was the kingpin height of the vehicle,” said Doe. “UK stand-

ard is about 1.25m to the ground from the kingpin, which inhibits the deck height at the front of the double deck.

“So we said to Northern Commercials, if we reduce the kingpin height, could we get the deck height we need to increase capacity?”

The result was a kingpin height of 950mm, which allowed for an extra 300mm at the front of the trailer. This created a 1.83m top and bottom deck height at the front. Capacity was increased from 42 pallets to 60 pallets – a boost of more than 40%.

The trailers do not cost any more than standard doubledeck longer semi-trailers as less material is used in the build process because they are straight-framed rather than step-framed.

Clipper leases 16 such longer semi-trailers from TIP and is hoping to increase this allocation to 50 units. “It’s the right thing for Clipper to do as a business,” said Doe “We are at the forefront of everything – from e-commerce fulfilment to returns processing – and we need to align our fleet strategy to this. It’s a logical step for us.”

Smaller operators look to gas trucks An increasing number of smaller operators are turning to dedicated gas-powered trucks, according to CNG Fuels chief executive Philip Fjeld. The company, which owns and operates three biomethane gas refuelling stations at Leyland, Crewe and Northampton, is planning to open 18 stations in the UK by the end of next year.

Fjeld said that while his typical customers are large corporate firms that operate fleets of between 300 to 600 trucks, he has seen an increase in the number of smaller operations looking to add gas-powered trucks to their fleets. “A number of smaller companies have ordered this year. These are not your MT Top 100 companies with huge fleets; they are operators running fleets of between 20 and 50 trucks,” he said.

Fjeld predicted that by the end of the year smaller operators running gas-powered trucks will be in the double-digit range thanks to the rising number of leasing schemes. “We estimate there are approximately 300 dedicated gas trucks on UK roads this year. Next year we estimate that will rise to well over 1,000.”

Want a Bath CAZ? MT is holding a free half-day roadshow on 6 March to enable operators to engage with Bath & North East Somerset Council about plans for a proposed charging clean air zone (CAZ) in central Bath. Under the plans, operators would need to ensure their vehicles are Euro-6-compliant for diesel and Euro-4 for petrol to avoid being charged.

The roadshow is a must for anyone operating or servicing CV fleets, providing invaluable advice via a series of workshops.

■ For details, go to: motortransport.co.uk/clean-air-zoneroadshow-bath.

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06/02/2019 16:53:45

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07/02/2019 09:36:58

Focus: Warehousing An imbalance between supply and demand has pushed up rents across London and the south-east

Rents reach record levels The shortage of available buildings in London and the south-east is making it difficult for those searching for space and is having a dampening effect on the market.

Knight Frank partner Gus Haslam said internet retailers and parcels firms, those involved in food and drink distribution and the clothing sector are driving the market.

“There is demand across all sizes and types of occupier, despite Brexit and political turmoil, and there is an acute shortage of space, particularly of good-quality, second-hand buildings,” he commented.

The lack of availability in the region appears to be restricting take-up which, for buildings above 100,000sq ft, was 3.9 million sq ft in 2018, according to figures from JLL – below the five-year average of 4.4 million sq ft.

LIVING TOGETHER: Segro and Barratt Homes have started a joint sheds-and-beds development in Hayes, west London

JLL director Ed Cole said: “London and the south-east is constrained by a shortage of land and strong competition from other uses, especially residential.”

Where sites do become available, developers are keen to bring them forward and are confident of successfully

letting them. “There is incredible competition among developers with deep pockets for any sites that come up for sale, especially within the M25,” Cole commented.

For example, at the start of this year Prologis announced it had bought 11.5 acres of land next to its existing Prologis Park

Hemel Hempstead development. Once complete, the entire park will provide 750,000sq ft of space (see page 9).

Tritax Big Box, in conjunction with Bericote Properties, gained planning consent for a 450,000sq ft warehouse at the site of the former Littlebrook Power Station in Dartford at the end of last year. The building is available on a buildto-suit basis.

Many of the largest warehouses in the region are being developed towards its outer edges. Goodman is due to complete a 405,000sq ft speculative warehouse in Bedford this summer, while Gazeley completed its 574,000sq ft Altitude building in Milton Keynes last year.

According to Savills’ Big Shed Briefing there are eight speculative units above 100,000sq ft being developed

in the south-east totalling 1.52 million sq ft, but none are within the M25.

Further in towards London, developers are becoming creative to make the best use of land. Gazeley, for example, is building a 426,000sq ft threest ore y warehouse in Silvertown, east London. In Hayes, west London, Segro and Barratt Homes have started a joint sheds-and-beds development that will include 230,000sq ft of warehousing/ industrial units alongside housing.

The imbalance between supply and demand has put upwards pressure on rents.

Knight Frank’s Haslam said that they increased 11% last year in Enfield alone, and at Park Royal some properties have reached a record £20/sq ft – more than at Heathrow.

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11.2.19

07/02/2019 10:59:41

motortransport.co.uk

PRINCE OF VITAMINS: Vitabiotics, the vitamins and supplements company run by BBC’s Dragons’ Den investor Tej Lalvani, has taken a 171,000sq ft warehouse at Prologis Park Hemel Hempstead. The speculatively built unit will be used as a national DC for the Wellman, Wellwoman and Pregnacare brands and will support the company’s expansion plans. Lalvani said: “This will more than double our operating capacity, creating efficient logistics and employment in the area to enable growth. We were also attracted by the environmentally sustainable benefits that the premises offered.” The company has signed a 12-year lease on the building, which is 20 minutes’ drive from its headquarters at Staples Corner. Prologis’ leasing and development officer Tom Price said: “Prologis Park is attracting interest from both local and national companies thanks to its proximity to London.”

Speculative warehouse projects rise by a record 55 announcements alter further in favour of grade A units in 2019,” the report said. However, any new space will have to meet demand for large warehousing.

The report found that total UK take-up in 2018 rose 32% to 34.1 million sq ft and is expected to remain strong as retailers restructure supply chains to cope with increasing online sales. Retailers of all types accounted for 53% of demand in 2018.

SPECULATIVE DEVELOPMENT ■ area (million sq ft)

2017 and 24 in 2016, which when combined, provided 8.4 million sq ft. When the new projects complete they are likely to magnify a trend towards greater availability of top-quality grade A buildings.

The report found that 51% of the total supply of large buildings, which amounts to 31.4 million sq ft, can be classified as grade A. This compared with just 35% in Q1 2015.

“We expect this balance to

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There was a sharp rise in the number of speculative warehouse projects announced by developers across the UK last year, raising hopes of an increase in warehousing supply.

Savills’ Big Shed Briefing reported a record 55 announcements of large speculative buildings over 100,000sq ft in 2018 amounting to 11.3 million sq ft of space. This compared with 21 announcements in

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MotorTransport 9

07/02/2019 11:00:11

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Use the levy to keep UK moving...

T Sally Gilson Head of skills FTA

he Treasury has to act quickly to release some of the £83m the logistics industry paid into the Apprentice Levy between April 2017 and March 2018 to help fill the skills gap as the UK heads for Brexit on 29 March.

The levy requires all UK employers with annual salary bills in excess of £3m to pay 0.5% of their wage bill as an additional tax to the Treasury. Employers can then claim back the cost of employing eligible apprentices from the pot. But the problem for the logistics sector has been finding suitable apprenticeships that meet the needs of businesses. As a result, the logistics sector has claimed back less than 10% of the money it has paid in since the levy was created.

The FTA has been meeting with the Treasury to find ways of releasing this much-needed money to fund the training the industry needs to address its chronic skills shortages, especially in warehouse staff and HGV drivers.

Because the standard 12-month apprenticeship is not suited to training these two vital groups of

workers, the FTA is proposing that the rules be relaxed to allow employers to claim money to fund shorter training courses that would not qualify as apprenticeships, and to help smaller employers cover the wages of apprentices while they are undertaking the off-the-job training that must make up 20% of their scheme.

Another mechanism the Treasury could use to free up some of the levy pot would be emergency Brexit funding to assist employers overcome the skills shortages that will/could?? be created as a result of the UK leaving the EU. With no clarity on which categories of EU migrants will be allowed to continue working in the UK post-Brexit, this uncertainty is leading to an exodus of seasonal eastern European workers.

It is unacceptable that at a time when an industry that is critical to the success of the UK post-Brexit is facing a crippling skills shortage, it is unable to access money that has been paid in the Apprenticeship Levy.

We have to find a way to break the log jam and free this pot of money to keep Britain moving.

...or the Treasury will get £10m a month H Steve Hobson Editor Motor Transport

ands up if you have ever heard of the Institute for Apprenticeships and Technical Education (IFATE). I’m betting there aren’t many readers sitting there with their hands in the air. Which is a shame, especially if your firms is paying the Apprenticeship Levy, as the institute was set up more than a year ago to approve apprenticeships that qualify for funding from the £130m pot that the logistics industry has paid in levy contributions.

Technically it is an ‘employer-led crown non-departmental public body’ that has already approved 400 apprenticeship standards and is in the process of approving another 300 across all industries. Of those, only half a dozen are relevant to the logistics and transport sector, making it very difficult for employers to claw back their levy money.

The levy became payable in April 2017 and from May 2019 this money will be drawn down by the Treasury on a rolling monthly basis if it is not claimed back to fund approved apprenticeships.

So an industry with a desperate shortage of HGV drivers, warehouse staff and management at all levels will soon be in the crazy position of losing £10m a month from a pot of money specifically created to fund training.

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As Sally Gilson of the FTA writes above, the trade associations have been working hard behind the scenes to find a way to release this money urgently, but operators need to get more involved and act quickly to ensure apprenticeship schemes that are of real value to them are approved by the IFATE. Too many employers in the logistics and transport industry seem to have given up on the Apprenticeship Levy and just accept it as another tax on business.

But at a time when we are facing the uncertainty of Brexit, and growing competition for the available UK talent pool, the industry cannot afford to sit back and watch that money go down the drain into Treasury coffers. Funding of £5,000 per person is available now to train HGV drivers on a one-year level 2 apprenticeship approved by the IFATE, so don’t let that money go to waste.

David Coombes, MD of Skills for Logistics, is a member of the IFATE Transport and Logistics panel setting these standards, so to find out more email him now on david.coombes@skillsforlogistics.co.uk.

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 Senior compliance editor Roger Brown 2168 Urban editor Hayley Pink 2165 Group production editor Clare Goldie 2174 Deputy production editor Jo Saunders 2173 Key account manager Andrew Smith 07771 885874 Display telesales Barnaby Goodman-Smith 2128 Event sales Richard Bennett 07889 823060 Tim George 0755 7677758 Classified and recruitment advertising Head of sales operations Julie McInally 2122 rtmclassified@roadtransport.com Head of sales Emma Tyrer 07900 691137 Divisional 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 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 © 2019 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 11.2.19

07/02/2019 12:11:18

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07/02/2019 09:39:08

Marketplace

motortransport.co.uk

Prohire cooks a deal with Abbey Prohire has won the contract to supply Abbey logistics its latest fleet additions for use on the operator’s contract with British baker Hovis.

The Mercedes-Benz Actros 244LS units will be used to transport bulk flour from the Ho v i s f l o u r m i l l i n Wellingborough to bakeries across the UK. They have been supplied on a 60-month contract and are FORS silvercompliant with Gardner Denver high-capacity blowers suitable for dry and wet products. The StreamSpace cabs are fitted with fridges and microwaves.

Prohire group sales director Andrew Morley said: “Prohire is delighted to secure its first order from Abbey Logistics.

Sourcing bespoke commercial vehicles to meet particular customer requirements is our area of expertise and it is excellent to have that recognised by one of the leading brands in the bulk transport sector.”

Abbey Group head of finance Paul Jamieson said: “Bulk road tanker logistics is a specialist area, and Prohire proved able not only to source the most appropriate vehicles, but also to understand our usage requirements and meet our specification in terms of features and benefits.”

New offering is first ready-bodied truck to be offered on latest P-series chassis

Scania and Hyva launch P-series Skiploader

Scania has launched a skiploader, based on its latest P-series chassis.

The 18-tonner, which has been developed in conjunction with Hyva, can be specified with either the 7- or 9-litre engine, with five power ratings ranging from 220hp to 360hp.

It comes with Scania’s 8-speed Opticruise transmission and R660 rear-axle with diff lock,

and can be specified in XT trim. The Hyva NG2012XL bodywork can lift 12 tonnes, or 8 tonnes when extended.

Scania (GB) sales director Andrew Jamieson said: “The new generation P-series 4x2 rigid chassis is ruggedly constructed, durable, reliable and safe.

“In addition to its highly fuel efficient on-road performance,

the P-series truck provides a stable and sure-footed platform when working on site.

As such, it provides an ideal base for skip-loader operation.

“By combining with Hyva we have a vehicle that is not only tailor-made for its application, but also offers the convenience of a one-stop, cost-effective product that can be acquired and maintained with Scania.”

The Scania Skiploader, which can be ordered through the Scania (GB) dealer network, is the first readybodied truck offered on the latest P-series chassis.

The previous generation truck came in skip-loader, hook-loader and box body guises. The first Skiploader was purchased by recycling specialist Remondis.

Evans Halshaw says decision to stock only Euro-6 vehicles driven by operator demand RAPID DELIVERY: Kel-Berg has delivered nine new T100 alloy tipping trailers to Northern Ireland operator Encirc. Kel-Berg won the order as it needed a quick delivery of units.The trailers were built, painted and delivered within four weeks of the order. Encirc transport manager Martin McGoldrick said: “Encirc decided to go with the Kel-Berg T100 tippers as its half-pipe tippers have been operating with hauliers for many years and are a tried and tested product. “After looking at many manufacturers we went with the T100 Alloy Tipper as it was lightweight and helped increase our payload by an average of 1 tonne per trailer, which, in turn, will reduce our carbon impact by almost 18,000 tonnes per year. “Kel-Berg delivered in a short lead time to meet our schedule.”

11.2.19

MTR_110219_013-014.indd 13

Operators are becoming more knowledgeable and better informed about upcoming industry changes according to Evans Halshaw, national franchise director Wayne Edwards.

“People are actually asking for a Euro-6 vehicles, rather than just asking for used trucks like they used to,” said Edwards.

“I think the change is very much driven by the press and all their talk of low emission zones as well as the RHA which has been banging on its drum about LEZs. “From January 2020, we’re talking about as much as £50 a day to get into the Leeds area.

We have a site there and I think

there’s now a fair bit of knowledge in the local area about what is potentially going to be required.”

Within the past eight months, Evans Halshaw has switched to stocking only Euro-6 standard used trucks, and with the exception of specific customer orders requiring Euro-5 now sells only the higher emission standard vehicles.

Across its four sites, Evans Halshaw now stocks up to 60 used Euro-6 trucks, a change which has come about entirely through customer demand.

“Customers are pretty aware of the LEZs. We’ve had a lot of interest in used Euro-6s, and

are taking a lot of Euro-5 in as part-exchanges.

“Because we are now only stocking Euro-6 we do use that as a sales hook, customers can be sure they are getting the latest specification and it can go into LEZs. “It’s very difficult in our industry, we do burn a lot of fossil fuels, but we always will until we get hybrids or electric trucks.

“When you talk to business people, the switch to Euro-6 is all about that £50 a day. We all want to improve our emissions, but that cost is something that they are going to struggle to pass on,” Edwards added.

MotorTransport 13

06/02/2019 14:51:53

Marketplace

motortransport.co.uk

Manufacturer designs bespoke 50ft container trailer to increase maximum freight transportation by 15%

SDC designs Malcolm trailers

Malcolm Logistics has added to its fleet with a bespoke trailer designed and built in collaboration with SDC. The 15.6m extended skeletal trailer is for use with 50ft big box containers that allow 15% more freight to be moved per journey.

Malcom acquired 20 SDC skeletal trailers at first, but has now taken a further eight units which are adaptable to fit two 20ft containters as well as 40ft, 45ft and the 50ft boxes.

The new design features a

pneumatically powered rear, with a lever switch to power it in/out on a twin beam for easy operation and robustness.

The trailer weight has been reduced by 300kg in comparison to the 2014 model, providing a higher payload and greater eff iciency for Malcolm’s operations.

A rear self-steering axle provides maximum manoeuvrability, while a Haldex soft docking system fitted to the rear will help prevent damage on loading bays. The trailer

has also undergone stringent testing for both road and rail use, and has a total unladen weight of just 5,500kg.

SDC CEO Enda Cushnahan said: “SDC was the first manufacturer to develop a 15.6m extended length skeletal trailer under the UK’s 2012 longer semi-trailer trial and we have worked closely with Malcolm Logistics to understand their transport requirements. I am very pleased that they have chosen SDC again and their latest order is testament to our

ongoing partnership, to develop practical solutions for cost effective road transport, while minimising the environmental impact of transport operations.”

Malcolm Group chief executive Andrew Malcolm said: “SDC’s 15.6m extended skeletal trailers allow our customers to move 15% more freight per journey over the largest available conventional container and by using a combination of our ecofriendly road and rail services,

we are able to achieve a 13% reduction in CO2 emissions per pallet. Following significant savings achieved with the first 20 15.6m SDC skeletal trailers, we decided to increase our fleet operation while also re-visiting the design to see if we could further increase efficiency.

“I am pleased to say we have achieved this, working closely with SDC to develop a pneumatically powered extended skeletal trailer with enhanced operation, safety and reliability.”

MV launches finance division Enterprise expands truck offering MV Commercial has launched an asset finance division to provide flexible funding packages for companies looking to invest in new trucks.

MV Asset Finance will underwrite sales of commercial vehicles supplied by MV Commercial through options, including variable rate, fixed rate and operating lease.

The new division will enable operators to maximise the benefits from changes to the Annual Investment Allowance announced in the last Budget, which increased in January from £200,000 to £1m a year.

14 MotorTransport MTR_110219_013-014.indd 14

Businesses investing in equipment are now able to claim 100% tax relief on their purchases to enable investment in new fleet equipment.

Steven Cairns, managing director of MV Commercial, said: “MV Asset Finance will make it easier for businesses to fund purchases of premium vehicles which offer the highest level of specification, providing for maximum driver satisfaction.

“The fact we’re prepared to underwrite and back the assets we build and supply is proof of our confidence in our product offering.”

Finance will be available on the complete range of equipment supplied by MV Commercial, ranging from crane trucks and tippers to recovery transporters and dropside trailers.

MV Commercial last year opened a new ‘super site’ in Airdrie, which includes a full design and body building facility.

Growth in the construction sector for specialist vehicles has led Enterprise Flex-E-Rent to add three new types of truck to its hire fleet.

The rental provider will now have 32-tonne tippers, hook loaders and tipper grabs available for hire at its sites across the country. It is the first time vehicles of this size have been on Enterprise’s hire fleet, and will be available on flexible and short-term daily rentals, The specification of the units has been carefully matched to suit companies working in building, infrastructure and highways.

Danny Glynn, managing director of Enterprise Flex-ERent, said: “Construction companies want to add vehicles to their fleets with greater flexibility, especially due to the considerable ongoing level of economic uncertainty.

“Flexible and short-term rental enables businesses to access the specialist vehicles they need for specific projects

without having to commit additional capital investment.

“We’ve been providing commercial vehicles to the construction sector for years and have identified that certain van, HGV and equipment specifications are requested by customers over and over again. Adding these three construction-spec truck lines to our standard HGV fleet means businesses can get the core transport they need for a specific length of time, without any penalties.”

The 32-tonne tippers are equipped with a cab-operated

electric sheeting system, Edbro tipper gear and have a 5mm Hardox floor with manual opening tailgates.

The hook loaders also get an electric sheeting system, and have a 22,000kg lifting capacity with a 7m body. The tipper grabs use a Palfinger Epsilon M125 Classic crane with dual controls, 5-litre bucket and Edbro tipper gear.

In addition to the new rental options, Enterprise has also just opened a new location in Luton between the M1 and A6, to serve its commercial vehicle customers.

11.2.19

06/02/2019 14:53:18

Marketplace

Is Euro-5 a good buy?

Euro-5 truck prices are at an all-time low, so should you be running a late-year model as cheap second-hand traction?

George Barrow reports

E

uro-5 trucks are largely on their way out of most major UK fleets. Their natural working lifecycle means that even the youngest models will now be in their fifth year of service.

For those businesses that always buy new and replace their vehicles based on age, there is no alternative but to dive headfirst into Euro-6 emission standard vehicles. However, if profiling vehicles based on mileage rather than age is your thing, the second-hand market may be the place to snap up a bargain.

Decent mileage late-model Euro-5 trucks, particularly tractor units, have been filling the market for the past 18 months and prices have tumbled as a result. While the threat of multiple low emission zones (LEZ) is leading to a shortage of Euro-6 stock in the second-hand market, it is also responsible for a glut of Euro-5s coming back for sale.

Economic and legislative factors regarding the introduction of Euro-6 vehicles in 2013 led to an unprecedented quantity of new Euro-5 stock entering the market. Many businesses were forced to delay their purchasing patterns and keep vehicles for longer following the onset of recession in 2008; the knock-on effect of this was to bring their inevitable replacements closer

to the introduction of Euro-6 regulations in January 2014.

Factor in concerns about fuel efficiency and increased complications of the new technology, not to mention the high upfront purchasing costs of Euro-6 trucks and, all of a sudden, operators were falling over themselves to buy the very last Euro-5 units. The result was an artificially high number of sales as the cut-off for Euro-5 registrations approached and far fewer sales in the early stages of Euro-6.

Back on the market

Five years on, the majority of those Euro-5 vehicles have returned to the second-hand market where, because of pending LEZ legislation, they are no longer as desirable as people might have first predicted. With a shrinking domestic market, and demand for Euro-5 vehicles from respectable fleets remaining high in right-handdrive markets in Africa and Asia, exporting these vehicles becomes the next step. Domestic auction houses are, however, continuing to see a steady number of Euro-5s going under the hammer, and for respectable prices too.

Dan Betts, commercial sales manager at The Fleet Auction Group, says: “We’ve not seen people trying to get rid of Euro-5s with any great

urgency at the moment. We’ve seen some buyers avoiding Euro-5, but there isn’t an abundance of Euro-6 available so they are still selling.

With the weak pound at the minute, these Euro-5s might actually hold their value for longer than expected because they will go for export.

A lot of export markets are now requiring 2009 onwards; that could mean that they might just lap up the demand for Euro-5 and keep those prices where they currently are. There are a few moving targets but, with the weak pound, we’re expecting the demand to increase.”

Exporting Euro-5s

While the UK market for Euro-5 vehicles is certainly static, if not in decline, there is light at the end of the tunnel in the lands of export.

With customers looking for vehicles in the five- to 10-year-old age group that means there is still the potential of resale beyond a second life here. Operators could look to capitalise on lower prices by running a Euro-5 vehicle in the short term – while Euro-6 prices and availability stabilise – and then potentially still resell their seven- to eight-year-old Euro-5 vehicles into export channels.

With such a variety of stock returning to market, prices are understandably variable, but the purchase price you pay now could determine what, if any, value you are left with when it comes 16 MotorTransport MTR_110219_016-017.indd 16

11.2.19

07/02/2019 10:17:01

motortransport.co.uk

ARE LOW EURO-5 PRICES BECAUSE OF LOW EMISSION ZONES? In addition to the well-documented and controversial Ultra Low Emission Zone being introduced in London, five cities – Birmingham, Leeds, Derby, Nottingham and Southampton – were instructed by the government to introduce clean air zones by 2020, although the latter three have now ditched plans for charging zones. Each city is free to decide its own emissions policy, and proposals for them were required by March 2018. In addition to the five cities already mentioned, other areas with extreme traffic problems or disproportionately high emissions levels are free to introduce their own clean air zones. Bristol, Cardiff, Coventry, Hull, Leicester, Liverpool, Manchester, Newcastle, Sheffield and Stoke-on-Trent have all expressed an interest or explored the possibility.

With government threatening funding cuts to councils that don’t meet emissions criteria by 2020, changes are not only expected to be rolled out quickly, but to be draconian. It is this fear, as cities including Southampton and Leeds consult over introducing charges to their LEZ schemes, that is driving sales of Euro-6 trucks in the used truck market and hindering sales of Euro-5 units. What was once an issue largely consigned to the south-east is becoming a national concern.

With so much supply forecast to arrive in the second-hand market for Euro-5 trucks, it can also be hard to see where the value is.

Paul Young, regional asset manager for PACCAR Financial, underlines Bett’s point that a good Euro-5 truck could be a wise investment in the short term. “If you’re buying a Euro-5 tractor at five years old and plan to run it for 12 to 18 months until there are clean air zones in most areas, it could be a good buy.

“The depreciation has already been taken, and for 12 months it will probably look like a cheap truck. Providing demand remains in the export market, I don’t think it would represent a bad investment, particularly to get you out of a short-term problem,” Young says.

Consider the variables

to reselling for export. Buyers in export markets are far savvier than they were during the transition from Euro-4 to Euro-5 and, as a result, anything with excessive mileage may not only struggle to achieve good money, it might not sell at all. The safer bet is to opt for low-mileage second-hand vehicles now, with the expectation that, even if you are working them hard, they will arrive in their third life with enough kilometres still left in the bank. That way you still get a return on your investment, and any premium being commanded by Euro-6 vehicles will have subsided.

Betts adds: “Prices have been strong on Euro-6, but I expect they will fall to where Euro-5 was two years ago by the end of this year. During the first half of 2019 there will 11.2.19

MTR_110219_016-017.indd 17

be a lot of medium-sized fleets consciously changing from Euro-5 to Euro-6, but most of the big fleets will be solely Euro-6 already.

They’ll only be defleeting Euro-6s from now onwards, so prices will level.”

Paying a premium now for a Euro-6 unit should be avoided while some Euro-5s are priced very keenly. An MAN TGX 6x2 480hp tractor unit, for example, with average mileage on a 14-plate, is available in the classifieds for around £15,000. As a Euro-6, a similar MAN TGX 480 just one year younger can command in the region of £38,000. Even accounting for the difference in age and mileage the gap is considerable between two trucks that are both out of warranty, and differentiated by little more than their engine’s emissions standard.

There is undeniably great value to be had in buying a Euro-5 truck at the moment, but operators must be mindful of the impending legislation that is likely to affect areas in which they operate. Nevertheless, with five years already under the belt of even the youngest Euro-5 trucks, the supply of good low-mileage trucks will eventually dry up, leaving you with another potential problem.

“If you do go for a Euro-5 in the short term, you’ll eventually have to get into Euro-6. Come April 2020 when a lot of LEZs will be in place, if all of a sudden there is a shortage of trucks for other reasons, like operators holding onto vehicles because of a hard Brexit, you could find it difficult to get back into the market and have to either buy new or pay a lot more,” Young warns.

“There are a lot of variables but, generalising, if you buy a Euro-5 now you’ve probably got 12 months before you have to pay any additional levies to get into cities. And assuming a demand remains in export, Euro-5 looks like great value compared with Euro-6.” n MotorTransport 17

07/02/2019 10:17:25

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07/02/2019 09:41:19

Tyres

More mileage for retread market T

The introduction last year of tariffs on cheap imported rubber from China has renewed the retreader’s traction in the UK truck tyre market. Jack Carfrae reports

he budget end of the truck tyre market has had some ups and downs in recent years, with UK and European sellers hit hard by an influx of cheap rubber imported from China. Fuelled by state subsidies, the products were allegedly poor quality and ineligible for certain forms of recycling.

Things changed in May 2018 when, after lobbying by manufacturers and organisations such as the British Tyre Manufacturers’ Association and European retread body Bipaver, the EU introduced a tariff of between €52.85 (£47.45) and €82.17 on truck and bus tyres with a load index of 121 and above. Brexit or not, the legislation is in place for five years, and although it hasn’t totally vanquished cheap and not-socheerful imports – industry folk have noted an increase in tyres of questionable quality from other parts of Asia – it has had the desired effect on Chinese tyres and fostered local markets.

Major manufacturers have reported an immediate increase in sales of what they describe as second and third-tier products, essentially those at the cheaper end of the spectrum. “From the moment those duties were announced, the number of tyres being imported from China

24 MotorTransport MTR_110219_024-026.indd 24

decreased rapidly,” says Bridgestone truck and bus product manager Terry Salter. “China was importing 4.5 million truck tyres a year into Europe, so it was a massive number – 20% of the entire European market.

“The first big consequence was that sales of the European-manufactured new tyres, particularly the second and third-line brands from the major companies, increased quite dramatically.”

“The natural behaviour is to look for the next-cheapest, similar product to what you were buying,” says Michelin B2B sales director Chris Smith, “so sales of tier-three and other midrange products lifted first.”

Knock-on effect

There has also been a positive knock-on effect for retreads – used tyres refurbished to similar standards as a new one and sold at a lower cost.

“Certainly the remould market is much more buoyant,” says Tim Hercock, MD of remould specialist Vacu-Lug. “The increase is between 8% and 10% in the use of remoulds, which is a good thing and what the tariff was designed to do. One of the big reasons the EU brought in the tariff was that a lot of these cheap imported tyres couldn’t be retreaded, and therefore were

just being disposed of, so the impact on the environment and waste was considerable.”

While retreads have become more popular in the wake of the legislation, they were hit hard by the spate of low-cost imports. According to Salter, 85 European retread factories closed as a result – 25% of the continent’s retread manufacturing sites – and investment wasn’t forthcoming.

Low profit levels

“There hasn’t been a huge amount of investment in the industry because of its low profit levels in recent years but now we are seeing increased investment,” says Salter, “we’ve sold more machinery and equipment to our Bandag franchise [Bridgestone’s retreading arm] since February than we have done in the previous three years. It’s increasing capacity and it’s also taking on additional staff and training them to meet the increased demand.

“But you can’t make 10,000 tyres a year then suddenly turn into a 20,000-tyre factory, because you simply don’t have the people and the machinery to do it. The numbers are increasing and it’s positive, but it’s probably going to take another six to 12 months before all of those

11.2.19

06/02/2019 14:45:06

retreaders are, what I would say, buzzing.”

They might have struggled in recent times, but remoulded tyres have been available to truck operators before and throughout the import war. Depending on the sizes used, they should be as easy to come by as conventional rubber. If you’re not using them already then a conversation with your supplier ought to be sufficient to get the ball rolling.

Some are sold as standalone products, while others are generated by sourcing spent casings from fleets and subsequently refurbishing them (again, it depends on which company and products you are talking about and your/their set-up)

11.2.19

MTR_110219_024-026.indd 25

but ultimately the selling points are price and a big, environmentally friendly tick.

The latter element is obvious, because you are reusing a tyre and therefore negating the manufacture of a new one. According to Arthur Gregg, MD of Continental’s retread specialist Bandvulc, the refurbishment process saves a lot of materials compared to manufacturing a new tyre.

“A retread reuses 80% of the raw materials of the original tyre. It saves 68 litres of oil every time you reuse a casing, 44kg of natural rubber and stops pumping 182kg of CO2 into the atmosphere,” he says.

As for the cost benefit, figures vary according to the company and the exact nature of the product or refurbishment work, but four specialists Motor Transport spoke to claimed a retread costs between 45% and 75% of an equivalent new tyre. The same people reckon you’ll get 70% to 95% of the life out of it, so however anecdotal, the maths stacks up.

Tyres have to be a certain level of quality in the first place to qualify for retreading so, assuming it’s been done properly, you aren’t talking bargain basement rubber that’s had a bit of s pit and polish; it will generally be an upper-end product.

Michelin, for example, generates and ➜ 26

MotorTransport 25

06/02/2019 14:45:41

Tyres

motortransport.co.uk

fitting competitors’ products to the fleet to start with, so it would be wasteful of us not to use those casings. We can’t use every casing, but if they’re on another premium brand then, in a lot of cases, we can.”

Limit to recycling

sells two types of retread, both of which are based on top-end tyres, as Smith explains. “A Remix is a retreaded tyre made only on a Michelin first-life casing, so the new tyre goes out the door, it gets worn out, comes back and we make a retread. Essentially, we buff it down to the original casing and then rebuild it in exactly the same way we build a new tyre.

“Then we manufacture a tyre called Encore.

That enables us to retread the casing once more – so take the Remix and retread it – but also to take some of our competitors’ premium brand casings and retread those. Operators may be

Inevitably, there is a limit to the amount of times a tyre can be recycled, because the casing eventually wears out. Most proper retreaders have the technology in place to detect this.

“You can’t retread a casing forever, because it will effectively become fatigued after so many hundreds of thousands of kilometres, and that’s a sensible time to replace it,” says Vacu-Lug’s Hercock.

“Good retreaders use technology called shearography [an X-ray-style process that highlights weaknesses in a tyre], which means we can look at the condition of the casing and know whether or not it’s suitable for retreading.”

Hercock adds that it isn’t necessarily the brand that defines whether or not a tyre can be remoulded. Despite talk from big-name manufacturers about the need for a premium product, the name on the sidewall pales in comparison to the quality of the tyre itself, so even if you don’t recognise the logo, that doesn’t mean you can’t retread it.

“We import a tyre from Asia called Westlake that’s made in Thailand, which means it doesn’t have the [Chinese] import duty on it, but we selected it because the casing was suitable for retreading. Just because a tyre is made in Asia it doesn’t mean that it wouldn’t be suitable. The reason we work with Westlake is because it’s

a good casing that can be retreaded, and there are other brands along a similar line. The real issue is not so much where it’s made, but how it’s made.”

Tyre manufacturers and retread specialists still think there’s work to do to promote the market, as dealers and truck operators are said to have veered away from remoulds when cheaper alternatives were available. There’s also a problem with perception, according to Bridgestone’s Salter.

“One of the barriers we have is that, in people’s minds, retreads are not as reliable as new tyres, but with the level of technology there is and the amount of non-destructive testing that now goes on in the retreading process, it’s turning out a high-quality product.”

Mix of new tyres and retreads

As a guideline, those in the know recommend using a mixture of new tyres and retreads on a fleet; the former maintains the supply of the latter, which is where you get your economy.

“There’s an argument to say that, if it’s 60% of the cost of the new tyre and it gives you almost the same performance, why would you not just buy retreads?” says Michelin’s Smith. “Of course, you can’t just buy a retread, because we need something to build the retread on. What we say is, by fitting, for example, new tyres to rear axles and rear axles of trailers, and retreads to drive axles and other axles of trailers, you’re going to get a really good composite price between the new and the retread, and also the maximum environmental benefit by using the casing as much as you can.” ■

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07/02/2019 09:48:24

Profile: ArrowXL

Bringing it all home

ArrowXL CEO Charlie Shiels wants his two-person teams to be as comfortable installing a washing machine as they are behind the wheel. He talks to Steve Hobson

A

fter almost 22 years with DPD, latterly as executive director of central operations, Charlie Shiels (pictured) decided to take a break in 2016. He spent almost a year travelling the world with his wife, then came back to the UK and, after considering a number of offers, took the chief operating officer role at two-person delivery specialist ArrowXL in April 2017. He was CEO just nine months later. “I wanted to do something smaller and I didn’t want to get into competition with DPD,” says Shiels. “But when you’ve played for Barcelona, you don’t play for Brentford.

So I ended up doing something completely different. It is far more challenging than oneman and I’m loving it.”

People person

Shiels’ enthusiasm for ArrowXL’s two-person home delivery niche is obvious as he shows MT around the company’s multi-level Wigan hub. Although still owned by Yodel parent the Barclay brothers, ArrowXL is now run entirely separately from the troubled parcels network.

A former truck mechanic, Shiels is a people person and knows the value of a well-trained and properly motivated workforce. “This is a very working-class business, let’s be honest, and I love that,” he says. “I’m a working-class lad and I can sit with drivers, chat to them, tell them what I think and they’ll disagree with me.

I’m proud of this business and of the industry.”

As a result, he is one of the few operators

28 MotorTransport MTR_110219_028-029.indd 28

that can claim not be struggling for drivers. “I have to ensure we get the right people coming in and we’re not doing badly. We employ 1,500 people and I think we need six drivers across the UK,” he says. “The trick is to keep them by treating our people properly and then making sure we bring the right new people in. We have plans and actions ready to do it.”

Those actions do not include significant wage increases, however. “The first thing is to make sure you’re profitable,” argues Shiels.

“Sales are really good. Our financial year starts on 1 July and we had a very strong start to last year. It was a good summer and when the sun comes out people buy new garden furniture, trampolines, big slides for the kids, paddling pools, hot tubs and all that stuff.

“We won some new contracts with big clients.

One of our strategic objectives is to make sure we’re an employer of choice. I’ve got only 15% of the market, so there are lots of opportunities to win new clients. How do you win clients?

By delivering great service. I can’t do that unless my employees are engaged. You can’t deliver great service with unhappy employees.”

Apart from offering “a fair day’s pay for a fair day’s work”, Shiels believes getting and keeping the best people is about treating them the right way. “It’s about having the right culture, and we are a values-led organisation,” he says. “It’s about recognising great performance and confronting poor performance.”

He argues that the whole transport and logistics sector has to adopt a similar approach to

solve the skills shortage. “People come to work for many reasons. Money’s important I know but it’s not the only thing,” Shiels says. “The culture here is being improved and drivers feel they will be listened to. I want people to go home and say to their partner, ‘How was my day at work? It was all right, actually. My boss said well done and that I did a good job’.

Under-valued drivers

“Drivers have been under-valued historically, there’s no doubt about it. We can only pay what we can afford, we have a profit to make and a shareholder to satisfy and the language I’m using with my drivers is ‘I’ll pay you as much as I can afford to pay you’.”

Shiels has an additional problem in that driving is only a small part of an ArrowXL’s driver’s job. “The big difficulty I have on top is that we are all 7.5-tonne final-mile, two-person deliveries,” he says. “We move the big stuff, not like parcels where they’ve got 100 items – a pair of jeans, a pair of shoes, a mobile phone – that they can just hand over, leave in a safe place or leave with a neighbour.

“For us it’s moving an American fridgefreezer where the doors have to come off. Or it’s a king-size bed to go in a third-floor flat and the lift’s not working. I want drivers who are also customer service agents, people who can install washing machines.

“Driving is part of the job but they’re also moving 3 tonnes a day. It’s hard physical work, and I want people who will not just come to your doorstep and hand a package over but will come into your home and go into your kitchen or bedroom.

“If you don’t want to do that, it’s not the business for you. If you don’t want to go into people’s houses and you don’t want to take a mattress or bed up to someone’s bedroom, it’s not the job for you.

“The most important thing we want in a frontline colleague is the right attitude. So they’ll come to your house and say hello to you, your partner and your kids, put on the overshoes and make sure they don’t damage the floors.

That’s quite hard to find in our industry.”

Shiels is learning lessons from DPD, which has taken a lead in the parcels market through a customer-focused ethos that drives innovation in its delivery model. “The two-person world is a little behind the parcels guys in terms of the consumer ethos,” Shiels says. “That’s prob11.2.19

06/02/2019 14:46:57

motortransport.co.uk

RISING FROM THE ASHES

ably why I’m here, and we’re changing that.

We’re now getting right into the customer journey. If you’re an Amazon customer and I make you happy, you’ll let Amazon know and then they’re happy. That’s the way it works.

The consumer doesn’t pay me, Amazon does, but I’ve got to keep the recipients happy.”

Shiels also sees a growing market for e-commerce in the larger home furnishings market. “People are more comfortable buying bigger stuff online now,” he says. “That market had lagged but many of our clients are growing on the back of e-commerce. But it’s a different market. When people are buying jeans or a book, they want it tomorrow. This is different.

People want it when they want it. If a sofa is on six weeks’ delivery, five weeks on they get a notification that it’s a week away.

“We then ring and say, ‘we’ve got your sofa, which day of the week do you want it?’ If the consumer says ‘can you do it the week after?’ because they haven’t finished decorating the living room, that’s fine. We bring it in, put it in our warehouse and recontact the customer and say, ‘are you ready now?’ When they are, we deliver it, so it’s more about convenience than speed.

“Don’t get me wrong, if your washing machine is broken, you want it tomorrow, but with lots of big items you want them when you want them because you’ve got to be in.”

The day before delivery, ArrowXL’s planning system means it is able to offer a two-hour delivery window, which is narrowed down to 30 minutes on the day as the drivers work through their deliveries.

To make deliveries more accurate, ArrowXL is using post tags as well as postcodes to locate delivery addresses. “Postcodes can be inexact,” says Shiels. “Post tags take you to the front door.”

Delivery challenges

Although the company does not yet offer weekend or evening deliveries, Shiels is looking at it for London, which comes with a unique set of delivery challenges for heavy items. “London and the south-east are a problem,” says Shiels.

“No one’s in, it’s all flats, you can’t park a 7.5-tonner, so delivery could be half an hour.

“Is it three-person routes? Is it evening deliveries that we’re trialling with one client in Liverpool to see if we have a greater success rate? Or maybe rather than starting at 7am we 11.2.19

MTR_110219_028-029.indd 29

start at midday and go through to 7pm or 8pm to see what that delivery success looks like.

“My new world is something called dwell time, which is how long the drivers will be on a delivery. A washing machine might be 12 minutes, but not if it’s on the third floor of a block of flats and you’ve got to find somewhere to park.

“We’re looking at technology that will tell us it’s the third floor so that our 12 minutes becomes 22 minutes, which then makes planning the rest of the day more accurate.”

While ArrowXL is not short of drivers, like many home delivery operators Shiels is looking at switching from 7.5- to 3.5-tonne vehicles that can be driven on a car licence. “I have looked at a specialist bodybuilder that can give us the cube we need,” he says. “Could we do a morning and an afternoon route because drivers for 3.5-tonne vehicles are easier to find? We’re doing some testing: at the moment, a route could go out with flat-packed furniture, sofas, washing machines, televisions, etc. With the planning capability that we will have very soon, should we have a white goods route? Should we have a furniture route?

“It’s about the ability to plan and our planning system historically has not been good enough.

Early this year we will be planning by product type, product weight, all sorts of things that will enable us to think ‘why don’t we do it this way?’”

Alternative fuels

Shiels remains sceptical about the trend towards alternative fuelled vehicles, especially electric, because of the loss of payload imposed by heavy batteries. “The pragmatic reality of where we are as a business is that they are not right for us at the moment,” he says. “When I was at DPD I got some electric vans, and they were brilliant, but they were full of jeans, T-shirts and technology, so it was easy. When you move an American fridge-freezer around, it’s 180kg, so you’ve got to be very careful what you do.”

After listening to his drivers, Shiels has switched from Isuzu to DAF for his latest batch of 7.5-tonners. “Who better to ask than the lads doing the job?” he says. “So we bought the DAF, arguably the best 7.5-tonner in the UK, and we’ve got 90 due this year. Now, is it automatic, is it manual? What’s best for the job you do?

Again, ask the drivers what they like and you get a load of different answers. Generally speaking, they much prefer the manuals.” ■

Talk about a baptism of fire – on 20 April 2017, just six weeks after Shiels arrived, he saw ArrowXL’s 200,000sq ft warehouse on the Blackpole trading estate in Worcester burn to the ground. The cause of the fire, which was discovered at 8.30am, has never been determined, but many businesses could have been finished by a blow like that. Not ArrowXL. “The fire knocked us sideways,” says Shiels. “I was sitting with the HR director and the alarm went off. I grabbed my stuff and, within an hour, there were 28 fire engines there and that was it. By the end of the day, we had met at a local hotel and within a week we were back up and running in a warehouse in Chepstow. I stood up in front of the drivers two days later said ‘phase one, we get back up and running. Phase two, we move back to Worcester as soon as possible. Phase three, we phoenix from the ashes’. We are in phase two now, still in temporary facilities, although it’s a great warehouse. Phase three, which is August this year, we’re back in Blackpole with a new, state-of-the-art, warehouse facility.”

Soon after the fire, ArrowXL relocated from the temporary site in Chepstow to a more permanent facility 60 miles away in Droitwich. While most products only rest in ArrowXL’s warehouses for a few days while awaiting a delivery slot, the company provides long-term storage for some of its 70 retail customers. “The majority of our business is in home delivery, with product that we call flow-through. It comes in today for delivery tomorrow, so it flows in and out of the building,” says Shiels. “But we also provide warehousing. We spent £2m on this 750,000sq ft facility here [The Fort in Wigan] and our technology enables us to do both, so it’s entirely up to the retailer.”

Shiels is getting enquiries from retailers concerned about a no-deal Brexit causing delays at the borders and wanting to hold more stock in the UK. “I met a fashion retailer recently who is clearly planning to overstock in case of a border problem,” he says. “I can’t get worried about Brexit and it’s only recently come to my attention that people may want warehousing. That’s an opportunity, but if someone wants 50,000sq ft for six months, well, we’re fairly full. We built this new facility and it filled up fairly quickly because warehousing is a problem.”

The shortage of warehousing means ArrowXL may retain its 180,000sq ft Droitwich facility when its new 260,000sq ft warehouse at Blackpole opens.

ArrowXL covers the UK from five depots – Enfield, Worcester, Wigan, Airdrie and Carrickfergus – with a subcontractor serving Ireland.

“We are looking in the south-east for an additional depot,” says Shiels. “The south-east is so busy. Lots of our furniture clients are very south-east-hungry. Half their volume goes to the south-east and we want to be back there with a brilliant service.”

MotorTransport 29

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