Motor Transport

Sharp ■ Informed ■ Challenging

11.3.19

INNOVATION. EFFICIENCY. RELIABILITY. Disorderly EU exit will adversely affect logistics sector, with recruitment major concern BOOK NOW

No-deal will cost billions

MTAWARDS.CO.UK

By Carol Millett

MAKE A SPLASH IN YOUR INDUSTRY

OPERATORS IN THIS ISSUE Bibby Distribution .................................p8 CM Downton .......................................p14 Canute Haulage Group ........................p16 DX Group ..............................................p6 Eddie Stobart Logistics ..........................p3 Gregory Distribution ..............................p8 Howard Tenens......................................p4 Knowles Transport ..............................p12 Tesco .................................................p12 Wincanton .......................................p3, 8 Yodel ..................................................p16

A disorderly Brexit could result in the UK logistics sector suffering losses of £6.7bn a year by 2024, according to a report from workforce management consultancy Quinyx.

The report compared the predicted growth and economic output of the UK’s logistics sector blue-collar workforce under a disorderly and an orderly Brexit scenario.

The study defined a disorderly Brexit as one in which the UK leaves the EU without an agreement or delays its departure in an attempt to arrive at an agreement. An orderly Brexit is one in which the UK and EU sign a with-

drawal agreement and seal new trade agreements within two to three years.

It is also assumed that new trade agreements between the UK and other major trading partners are established before 2024.

The research found that under an orderly Brexit the increase in economic output generated by the UK’s logistics workers in manual roles would be £9.8bn a year by 2024. This compares with just £3.1bn under a disorderly Brexit – a 68% reduction equating to a loss of £6.7bn a year.

These losses would largely be generated by a lack of access

to manual workers from the EU, the report said. It added that 62% of UK logistics businesses predict that leaving the EU will negatively effect their ability to hire drivers, packers and warehouse workers.

It warned that some regions will be hit harder than others with London, the east and the south-east seeing the greatest fall in available workers and economic output under a disorderly Brexit.

The research, which looked at the Office of National Statistics’ labour force data and included interviews with

senior decision makers in more than 100 logistics firms, also found that under any Brexit scenario employers in the sector expect to lose approximately 21% of their blue-collar workforce. Despite this, 16% of logistics businesses have no post-Brexit plan for recruitment, the research found.

With 38% of employers in the logistics sector already struggling to recruit and 44% reporting retention problems, the report warned that logistics firms need to address issues such as unsociable hours, low pay and a lack of progression to attract and retain these workers.

Bad week for Palletways as Duncan Adams and TAS close doors Palletways has lost two longserving members within days after Grangemouth-based Duncan Adams and TAS Transport, near Heathrow, were both placed into administration last week.

Deloitte was appointed administrator of Duncan Adams last week, and confirmed to MT that 132 of the haulier’s 144 staff were made redundant. According to Deloitte, it had a fleet of about 100 trucks and an annual turnover of around £16m.

Michael Magnay and Clare Boardman of Deloitte said in a statement that because of certain client contracts, the company had been incurring significant losses.

“Together with difficult trading conditions in the industry over the past couple of years, these factors created cash pressure in the business.

“Potential sale opportunities were explored by the business before the administrator’s

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appointment. However, in the limited time available, this did not lead to any serious expressions of interest. Accordingly, the administrator is implementing an organised winddown of the business,” they said.

Viewpoint p20

Caledonian, Pollock (Scotrans) and Palletways Glasgow are now delivering into the territory formerly covered by Duncan Adams.

TAS Transport offered air freight and international cargo services from its base at Bilton Way, Hayes, Middlesex.

The haulier was accorded a Palletways Platinum award in 2018, a status reserved for the best-performing members in the network.

However, in a letter to depot principals seen by MT, Barry Byers, network development manager at Palletways, confirmed that TAS Transport had ceased trading on 1 March and entered administration.

“Both Surrey Pallets and

Alternative fuels p22

Palletways London are now servicing the area formerly covered by TAS Transport,” he said.

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07/03/2019 09:30:37

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Wincanton takes over bulk of Aggregate Industries work but regional hauliers take a healthy share

ESL expresses concrete regrets Eddie Stobart Logistics (ESL) has labelled the premature end of its Concrete Products Division contract with Aggregate Industries (AI) as “regrettable” in a letter to affected staff.

Last month MT revealed that Aggregate Industries had ended its partnership with the haulier just over two years into a five-year deal and appointed Wincanton in its place (MT 11 February).

ESL had been moving finished products from the Bradstone, Charcon and Masterblock product ranges for AI from 14 UK sites, having replaced previous incumbent XPO Logistics in October 2016.

ESL and AI have yet to comment officially on why the relationship between the two broke down.

However, in the letter sent to ESL staff and seen by MT, the operator expands on a

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previous briefing about the end of the contract, stating “regretfully we advised that it [AI] has decided to partner with seven alternative hauliers”.

The letter is signed by the firm’s HR business partner Dawn Webster and addresses the process of transfer and terms and conditions for staff.

Last week, to mark the start of its deal, Wincanton revealed it had signed a five-year contract to transport more than 40,000 loads per year from 10 factories to customers across the country from “a majority of [AI’s] UK manufacturing sites”.

Wincanton CEO Adrian Colman said: “Our record for delivering an efficient and sustainable specialist vehicle network, and our best-in-class health and safety record, were all factors in securing this contract.”

According to the ESL letter,

staff involved in the planning function for the contract were due to relocate to Wincanton’s operating sites at Hulland Ward, Derby and Leighton Buzzard for the start of the new deal under TUPE regulations.

Admin staff were expected to relocate to Wincanton’s Hulland Ward and Derby operating centres.

While a spokesman for Wincanton confirmed the 3PL had the bulk of the work, as

highlighted in the letter, it appears regional hauliers are playing their part in delivering AI’s total requirement for its Concrete Products Division too.

JF Pearce & Sons is running services from the Torr Works in Shepton Mallett, and is also handling the majority of work – much of it crane-based – at Callow Rock Quarry, Cheddar (where Wincanton is also operating).

Family firm SJ Messenger Haulage is handling distribution from Croft Quarry 1+2, Leicestershire.

Other hauliers working for AI after the switch include Larbert-based Ian Craig Haulage and Collett Brothers Ha u l a g e i n W i t n e y, Oxfordshire.

Eddie Stobart Logistics was approached for comment but did not respond. Aggregate Industries declined to comment.

MotorTransport 3

07/03/2019 17:13:21

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Councils say bridge tolls are best way to improve air quality without hurting business

Tyneside warns of CAZ fears Shutterstock

By Carol Millett

A “nonsensical” charging clean air zone (CAZ) could wreak economic damage on Tyneside and should be ditched in favour of a toll system on three bridges over the River Tyne, council leaders have warned.

As a public consultation on proposals to improve the region’s air quality began this week, Newcastle, Gateshead

and North Tyneside council chiefs warned that a charging CAZ could have a “significant negative impact”.

Modelling by the three councils has shown that a charging CAZ could cost the region £140m over five years, due to vehicle upgrading costs, its effect on small businesses and the time lost by drivers taking longer routes to avoid the charging area.

Northern Irish firm SDC Truck and Trailer Parts has opened its first branch in England in response to growing demand. The parts firm, which is a subsidiary of SDC Trailers, has chosen Warrington as the location. The launch of the parts store follows the opening of three new branches in Omagh, Cork and New Ross last year.

The three councils argue that their preferred option to impose tolls on the Tyne, Redheugh, and Swing bridges would help the region improve air quality without penalising local businesses and lowincome citizens.

Under the proposed toll system, charges would apply to all lorries, vans and cars regardless of their emissions, with lorries charged around

Bath plan is ‘stealth tax’ on hauliers, blasts FTA A plan to introduce a clean air zone in Bath, which will cost non-Euro-6 HGVs £100 a day to enter but exempt all cars, has been slammed by the FTA. Under the revised plan, non-Euro-6 buses, coaches and HGVs will be charged £100 to enter the CAZ. Non-Euro-6 HGVs, vans, private hire vehicles and taxis will pay a £9 charge.

FTA south west policy manager Chris Yarsley said Bath and North East Somerset Council’s decision to exempt private cars would place “a heavy financial burden” on hauliers and said the charges were “tantamount to a stealth tax”. He criticised the size of the zone, which has been extended following public consultation to encompass areas within the east of the city.

NEWS IN BRIEF

Yarsley warned: “This zone will not just affect those delivering into Bath, but any operators using the A36 to go west or south.”

He also questioned whether the zone would improve air quality. “Bath and North East Somerset Council would be better placed concentrating on traffic management and encourage the uptake of ultra-low emission vehicles instead of implementing a scheme that would cost businesses and damage the local economy,” he said.

It came as Greater Manchester revealed proposals to implement a clean air zone spanning the region’s 10 local authorities by 2021.

It will stretch across 500 miles. Non-compliant HGVs, buses/coaches, taxis, minibuses and private hire vehicles face a daily fee of £100.

£3.40 per journey and vans and cars around £1.70 per journey. Buses and taxis would be exempt from charges. In comparison, the proposed CAZ would see all non-Euro-6 lorries, buses and coaches pay around £50 per day with vans, cars and taxis charged around £12.50 per day.

Consultation respondents will also be invited to comment on other potential measures including a low emission zone in Newcastle city centre.

Gateshead Council chief executive Sheena Ramsey warned that a CAZ would hit low-income households, areas of high deprivation, and small businesses.

Newcastle City Council leader Nick Forbes said that a CAZ could have “unforeseen consequences” and was an “utterly nonsensical approach”, arguing that the toll system would offer “a more equitable” solution.

A spokesman for the three councils urged local people and businesses to respond to the consultation at breathecleanair.com.

Cleaner lorries can now receive a 10% reduction in the HGV Road User Levy.

From 1 February, haulage firms operating Euro-6 vehicles can receive a discount following an announcement by the roads minister last year.

The DfT said the newest lorries generate 80% less nitrogen oxide emissions than older vehicles.

However, Euro-5 vehicles and older are required to pay up to 20% more.

Jonathan Keating, a senior adviser at the Government Office for Science will speak at the Microlise Transport Conference, Coventry, on the 15 May. Keating will provide an insight into his work advising government on how science can be used to meet the transport industry’s challenges, the factors likely to affect it until 2040, and the implications for freight highlighted by the Foresight Future of Mobility project.

■ For more details, go to microliseconference.com.

SUSTAINABLE FUTURE: Howard Tenens has made a series of changes to its leadership team after the retirement of Keith Charlton. The company has promoted former joint MD Jamie Hartles to CEO. Hartles has been with the company for more than 12 years, joining as a commercial manager. He was named joint MD in August last year, stepping up from logistics director. Hartles said of Charlton: “Keith made a tremendous contribution to the business over the past five years, adding considerable stability and strength over that period.” Charlton, who was chairman of logistics at the Stroud, Gloucestershirebased operator, will be retained as a consultant. Karl Hodgkinson, who has been with the operator for nearly three years, initially as group commercial director and then joint MD since last year, has become outright MD of the Motor Transport Top 100 company. Hodgkinson was formerly a director at Northampton-based transport and warehousing firm C Butt.

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11.3.19

07/03/2019 13:16:38

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07/03/2019 09:34:40

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New management team says fresh focus on depots is delivering growth – and return to profit will follow

DX empowers local management

By Chris Druce

DX Group has taken another significant step on the road to its rehabilitation, its CFO David Mulligan has claimed.

Speaking to MT after the publication of the embattled group’s interim results for the period ended 31 December 2018, – which showed turnover growth and a smaller loss – Mulligan said its respective businesses had been able to regain their identity and boost service levels

by empowering general and regional managers to make decisions.

Dedicated sales teams for DX Freight and DX Express has delivered top-line growth too, he added.

“It was around a year ago that we were outlining our turnaround plan.

We made structural changes at the back end of last year” he explained.

As a result DX Group expects to be back in profit at an EBITDA level for the full year’s trading, although it will likely still record a pre-tax loss.

Key to the new management team’s approach is the placing of “the depots and service centres at the heart of DX” again, said Mulligan.

Group turnover was up 7% to £157m (2017: £146.6m) while the EBITDA loss was 43% smaller year on year at £2.5m (2017: loss of £4.4m). DX Group made a pre-tax loss of £5.3m in the period (2017: loss of £14.1m).

There were no exceptional costs in the period and after a refinancing exercise last year, net debt was £3.5m compared with £25.6m a year ago.

DX Group will be adding an unspec-

ified number of new 7.5-tonne MANs in the next few months, which will be a mix of replacements and additions to the fleet.

Divisions

DX Freight remained loss making.

While turnover increased by 16% year on year to £78m (£67.4m), the division made an EBITDA loss of £5.5m (2017: loss of £8.1m).

DX Freight is made up of the group’s DX Logistics business, which delivers bespoke services to the likes of IKEA and Avon, as well as its two-man operation.

However, the largest contributor in regards turnover is its one-man operation, which added £5m in revenue to reach £47.8m.

Mulligan said a decision to reduce the division’s B2C dependency – it has almost halved compared to a year ago – and concentrate on “the heart of what we do, which is B2B on our 7.5-tonne fleet going from trading estate to trading estate” was paying off.

DX Group has also opened new,

dedicated sites for its divisions including one in Pucklechurch, Gloucester for DX Freight. This will be joined, imminently, by a new DX Freight depot in Maidstone, Kent.

“It’s helping build out local presence and deliver a better level of service,” he said.

While the DX Express division’s turnover was flat at £79m (2017: £79.2m) its EBITDA fell 18% to £11.6m (2017: £14.2m).

DX Exchange, part of the division, remains under pressure as fewer secure physical documents are moved but the rate of attrition has been slowed to 8% compared with 12% a year ago.

The operator’s play in the area is to reposition DX Exchange as an exclusive members’ network, something that Mulligan said it is taking its time to get right.

April is a big month for DX Express, as it will find out if it has triumphed in a retender for the Passport Office.

Its current contract runs until October 2019 but it has delivered the service for the client since 2004.

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07/03/2019 09:37:40 25/02/2019 10:46

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Wincanton renews contracts with Valero Energy and roofing products firm Marley

Wincanton in historic double

By Chris Druce

Wincanton has had its long-running contract with Valero Energy renewed and secured a contract extension with roofing products firm Marley.

The 3PL has worked with Valero Energy for more than two decades and will continue to provide fuel distribution services for another five years.

As part of the arrangement it will manage transportation from Valero’s UK terminals to more than 700 retail sites across the country, making more than 200 deliveries every day and transporting more than 2 billion litres of ground fuel each year.

Wincanton’s renewal with Marley

will see it distribute the company’s roofing products across the UK until late 2023. Wincanton uses a dedicated fleet of specialist vehicles, which are supported by Wincanton’s wider construction fleet of more than 200 mechanical off-load vehicles.

Wincanton CEO Adrian Colman, said: “We’ve been working with Valero for more than 25 years. We’ve built up a strong partnership and developed an understanding of the needs of its customers. Extending our working relationship with Marley is validation of our expertise in servicing this business up and down the UK with complex transportation requirements.�

Bibby Distribution boxes clever with Jardin contract Bibby Distribution has won a contract with cardboard manufacturer Jardin Corrugated thanks to its high-cube fleet expertise. Liverpool-based Bibby’s high-cube trailers, which provide a 15% volume boost over standard mod-

els, will reduce the number of journeys needed to transport Jardin’s horticultural boxes from its production sites in Ely and St Ives across the UK. The four specialist SDC trailers will also collect paper reels from Jardin’s sup-

pliers in central and eastern England on return trips, maximising fleet usage.

Bibby will support Jardin at peak times with access to a further six 44-tonne tractors and trailers and a 26-tonne rigid truck with a tail-lift.

Jobs under threat at Gregory Distribution Gregory Distribution has placed 50 job roles at risk of redundancy after the collapse of customer Devon-based British Ceramic Tile.

Gregory MD Angela Butler said: “We will redeploy people wherever possible and give staff every assistance in finding new jobs. We regret the need for any redundancies as we value our loyal and committed people, but it has been necessary to consolidate the position of the company and its remaining 2,700 employees.�

The tile company is claimed to be the largest manufacturer of ceramic and glass tiles in the UK, and operated from three sites. It was placed into administration at the end of January.

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11.3.19

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07/03/2019 09:40:51 27/02/2019 11:28

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French and German pledges to invest in EV cell production should cut costs for European manufacturers

Positive move for electric vehicles

By Chris Tindall

Decisions by France and Germany to build domestic battery plants for electric vehicles (EVs) will reduce the costs of the technology in HGVs, according to industry analysts.

The announcement that the countries will invest in battery cell production plants in their own countries to protect the

industry from Asian rivals comes as Volvo Trucks handed over its first two full-electric trucks at a ceremony in Germany.

A refuse truck was delivered to waste and recycling company Renova and a distribution vehicle was handed over to DB Schenker. Both will be operated in Gothenburg.

The two FL Electric models are part of a pre-series developed in collaboration with selected customers by the truck maker.

France has pledged to invest up to €700m (£600m) to build a domestic battery plant for EVs. The announcement follows Germany’s promise in November 2018 that it would

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do something similar to help supply the European automotive industry.

A spokeswoman at analysts Fitch Solutions said Volvo would be assembling its electric trucks at Renault’s factory in France, “so the battery technology will most likely be the same in Renault trucks”.

She said: “As such, the production cost of an electric truck should benefit from the economies of scale.

“In the case of Volvo, the Volvo Group stated that it wants to share the costs of expensive technologies across

the group to take advantages of wider cost distribution.”

The Fitch Solutions spokeswoman added: “We believe the introduction of more EV battery production plants in the EU will create more competitive pricing for batteries as vehicle manufacturers will be able to source EV batteries from a number of players.

“While electric buses and trucks use slightly different battery cells – which are larger and heavier – than passenger vehicles, we expect the overall cost of the battery technology to decrease.”

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London’s Ultra Low Emission Zone (ULEZ) is now less than a month away, going live on 8 April. After this date, non-compliant Euro-6 HGVs will have to pay £100 per day to enter the zone, while non-Euro-6 vans and smaller vehicles will pay £12.50.

The ULEZ is the first step in London mayor Sadiq Khan’s transport strategy, which aims to make the capital’s transport system zero-emission by 2050.

To support operators in understanding London’s future air quality aims and future-proof fleets, TfL’s LoCITY programme is hosting a roadshow: Fuels in Action: Beyond ULEZ. Taking place on 20 March at Kempton Park Racecourse, Sunbury-on-Thames, the event will guide the industry in how to create a cleaner capital, from low-emission neighbourhoods through to zero-emission zones in poor air quality hotspots.

Fuels in Action is a free-to-attend full-day event packed with seminars, alternative fuel commercial HGVs and vans, ride and drives, cargo bikes and essential LoCITY advice clinics.

Speakers will be drawn from across industry and feature first-hand knowledge sharing of new technology from your fleet manager peers, manufacturers, refuelling experts and policy-makers.

Key speakers include: DPD, sharing its all-electric micro hub concept; Clipper Logistics, talking about liquefied natural gas for HGVs; and Wincanton on its alternative fuels exploration, including eCanter operation.

■ Fuels in Action is free to attend and the largest LoCITY roadshows to date. To register, go to locityroadshows. co.uk/locityroadshows2018.

11.3.19

07/03/2019 13:03:04

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07/03/2019 09:46:53

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NEWS IN BRIEF Tesco is trialling doubledeck trailers, designed by manufacturer Lawrence David, which weigh 22% less than standard double-deck units. The supermarket chain is testing eight demonstrators in a year-long trial as part a project funded by Innovate UK. The London Assembly has backed the FTA’s call to reinstate a dedicated freight chief at TfL. In a set of proposals sent to TfL on how to tackle the challenges of delivering freight in London, the assembly’s transport committee recommends a dedicated freight team is created, led by a senior officer. It said the team should work across TfL and with external stakeholders to deliver a “holistic freight strategy”.

Temporary challenges with opening hit 2017 results, but business bounces back

Knowles off the rack as DC issues resolved

By Carol Millett

Knowles Transport has returned to profit after securing two major deals, undertaking a management restructure, and introducing tighter financial controls while resolving operational problems at its Wisbech DC. In its latest annual results to 31 December 2018, filed at Companies House, the Cambridgeshire operator

revealed a major turnaround, with turnover up 6% year-onyear to £32.1m (2017: £30.4m) and a pre-tax profit of £1.5m compared with a £4.4m loss the previous year.

MD Alex Knowles said the firm had decided to report its 2018 accounts early, filing them just a month after the 2017 results were posted at Companies House, to show the loss in 2017 “was purely

temporary”. Knowles said operational issues at the opening of the firm’s Wisbech DC had a significant impact on the firm’s profit in 2017 but were now resolved.

The DC, which opened in January 2017, suffered serious problems after a major racking company failed to deliver product in time for its launch.

“It missed its deadline, which meant we were bringing

in pallets with no location to put them in, and that caused all sorts of unexpected problems,” he said.

He added that this, combined with the £7.5m cost of opening the DC, the expansion of its fleet from 70 to 105 trucks in 2016/17, and the additional resources needed to bed in two major new contracts, were all key factors contributing to 2017’s poor performance.

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The RHA’s proposed collective claim for compensation over price-fixing by a cartel of truck manufacturers is well placed to get the green light to proceed from the Competition Appeal Tribunal, according to Steven Meyerhoff, a director at legal firm Backhouse Jones which is working with the RHA on its claim.

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07/03/2019 09:49:54 05/03/2019 12:30

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Gloucester business hit record turnover in year it was bought by EmergeVest

Downton flying when sold

By Chris Druce

CM Downton achieved a record turnover in the year it was acquired by EmergeVest for £75m, although costs associated with the deal weighed on the firm’s annual profit.

In the year to 30 June 2018, turnover increased 9% to £127.3m (2017: £116.8m), according to accounts filed at Companies House. Despite this, an increase in administrative costs connected to March 2018’s sale to EmergeVest resulted in pre-tax profit for the period standing 45% lower at £2.8m (2017: £5.1m).

Recently installed MD Duncan Eyre told MT: “I’m pleased to report CM Downton delivered record revenues during the financial year to June 2018, driven by contract wins and business growth from our existing customer portfolio.

“Underlying profit remained strong and in line with previous years.

However, the fall in pre-tax profit reflects the one-off costs related to the sale of the business during that financial year.”

He added that with the backing of EV Cargo – which was recently incorporated and is ultimately owned by EmergeVest – “we are confident of further growth and delivering added value to customers”.

CM Downton is also adding 60 new DAF XF 480 FTG tractor units (above) supplied by Imperial Commercials, Gloucester, to its fleet in the coming

months as part of a £5m investment.

Twenty units started operations earlier this month, with an additional 40 trucks set for delivery later this month and in April.

The operator is also refreshing its trailer fleet with 100 new Tiger Trailers curtainsiders emblazoned with the firm’s traditional colours. They will also feature EV Cargo dual branding.

14 MotorTransport

Pall-Ex has hailed new member Austin Wilkinson & Sons as “a top quality organisation” after it parted ways with rival Palletline.

Kevin Buchanan, group MD at Pall-Ex, said: “I know James [Wilkinson] and his team from my time at Palletline; it is a topquality organisation whose addition will strengthen the network and we are thrilled to have it on board.”

The Atherton haulier, a member of Palletline for more than 20 years, was replaced by Bowker Transport, which was already a Palletline member but has expanded its coverage.

Austin Wilkinson will cover the WN and parts of the BL postcodes for Pall-Ex. Palletline group MD Graham Leitch said Austin Wilkinson had been a great asset and that its departure was “as a result of ensuring the future goals of the network and member businesses are aligned” when the departure was announced last month.

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Pall-Ex celebrates its latest addition

04/03/2019 08:56 07/03/2019 11:47:49

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AD_110319__P15.indd 2

07/03/2019 09:55:55

News

motortransport.co.uk

Revived business was unable to turn back tide of losses – leaving more than 400 creditors out of pocket

Canute creditors’ £11m bill

By Chris Druce

Unsecured creditors of Canute Haulage Group and its successor are estimated to have been left almost £11m out of pocket after 2018’s doubleheader of collapses.

Following the operator’s pre-pack administration in May last year, unsecured creditors of the original business were left facing a £5.3m shortfall. However, a recently published Statement of Proposals covering the resurrected business – Almtone, trading as Canute Group – reveals that it racked up its own sizeable debts in the months before it succumbed days before Christmas.

According to Begbies Traynor, which is handling Almtone’s administration, unsecured creditors of this successor business are estimated to be owed approximately £5.6m. “We consider that the company will have

insufficient property to enable a distribution to be made to unsecured creditors,” the Statement of Proposals said.

In the period leading up to the business’s demise, numer-

ous creditors – including its former pallet network PalletTrack – chased Almtone/ Canute for payment.

The list of creditors of Almtone trading as Canute

Group runs to 17 pages and consists of more than 400 individuals and businesses.

Among these Pollock (Scotrans) has lodged a claim for £13,470; W Humphrey’s

Transport £37,545; TNT (part of FedEx) £14,046; Coventry Chemicals (now Mirius) £271,740; builders merchant Jewson £40,501; and Lovery Transport £16,038. This included multiple county court judgments taken out against the business and a winding-up petition launched by HMRC. Almtone, trading as Canute Group, was placed into administration on 21 December 2018 with the loss of 450 jobs.

Begbies Traynor confirmed to MT that unsecured creditors looked set to lose out. In January motortransport.co.uk revealed that FRP Advisory, the administrator of the original Canute business, remains in dispute with former client Wilko over a £600,000 contingency fund.

Depending on the outcome of the legal tussle, unsecured creditors of the original business may face an even larger shortfall than £5.3m.

Loss of trust hastened struggling Canute’s passage to second collapse The Statement of Proposals reveals that Almtone trading as Canute Group faced an uphill struggle right from the start, with a number of business withdrawing their support following May’s pre-pack sale.

Begbies Traynor notes “significantly higher levels of ransom payments” from former suppliers immediately curtailed cash flow and forced it to adopt a rationalisation plan.

By August 2018, financial backer Nucleus Property Finance, which was providing an invoice discounting facility, notified Almtone it would be reducing its exposure. At this point, £2m was injected into Almtone by “a party connected to the business”.

Nucleus rejected a funding request at the end of August, leading Canute to fall into arrears

regarding PAYE and NIC. The directors of the business filed a notice of intention (NOI) to appoint administrators as protection on 27 September 2018, prompting the taxman to respond with a petition to wind up the business.

The report states that, despite the NOI, Almtone’s directors believed that following a review they would be able to refinance the Nucleus facility and raise funds to repay HMRC. The NOI lapsed and by 8 November 2018, the operator refinanced – with a £6m credit line from GQS – and paid back Nucleus’s principal debt, save for £500,000 that remains outstanding.

Secured creditor GQS will see a return on the £5.9m extended to Almtone-owned Canute, but will likely “suffer a shortfall on its lending”.

While HMRC was paid, efforts to secure

long-term funding fell away and a second NOI was filed on 26 November.

On 3 December 2018 a wind-down plan was implemented. A site in Ipswich was divested and 30 staff moved over to a client as part of this. Other customers arranged for the transfer of services to alternative logistics providers – for example, retailer Lakeland contracted XPO Logistics – and a further 145 staff transferred under TUPE. In December, MT revealed that the Office of the Traffic Commissioner had rejected Almtone’s request for an O-licence as it was unable to demonstrate financial standing.

Another NOI was filed on 7 December and further efforts to find a buyer failed, leading to administration .

DELIVERY STRATEGY: Yodel network operations director Carl Moore has replaced chief operating officer Adrian Harris, who resigned in January, two years after joining the firm.

Moore, who started his career as a van driver at 18, has been promoted to chief operating officer, just five months after arriving at Yodel. In his new role Moore, whose former posts include executive advisor for network strategy at FedEx/TNT and group operations director at UK Mail, will be tasked with continuing the firm’s strategy to streamline its delivery process and improve service levels. In his previous role as Yodel’s network operations director, Moore reported to Harris, who quit his job as Marks and Spencer’s clothing and home logistics director to join Yodel in March 2017. The shake up comes as Yodel, which has an 11% share of the B2C parcels market and operates a fleet of 285 truck and 1,200 trailers, struggles to improve its performance. The firm’s latest annual results to June 2017 revealed a pre-tax loss of £82.5m – its highest since 2013.

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07/03/2019 09:57:22

Focus: Business barometer

motortransport.co.uk

On the cliff edge…

GDP

The UK economy rose 1.4% in 2018, the weakest annual figure since the recession of 2009. This was not due entirely to Brexit; GDP growth across the EU as a whole slipped from 2.4% in 2017 to 1.9% last year. It is all part of wider picture of faltering growth, caused by a slowdown in China’s expansion and concern about US-China trade tensions. This trend is likely to continue this year.

Last month’s forecast from the European Commission suggests 2019 growth will subside to 1.5% in the EU and to 1.3% in the UK. That is broadly similar to another forecast last month, in the Bank of England’s latest Inflation Report, which anticipates UK GDP growth of 1.2% this year.

The EC believes only two European economies are likely to have even weaker growth than the UK in 2019.

One is Italy, struggling under a large debt burden; the EC believes its GDP will expand by just 0.2%. The other is 18 MotorTransport MTR_110319_018.indd 18

Among all the Brexit headlines it was easy to miss the news that Consumer Prices Index (CPI) inflation in January dropped to 1.8%, the lowest for two years. The outlook is relatively stable, too. The Bank of England’s February inflation report believes CPI inflation will continue to hover just below the government’s 2% target for the next few months before rising to 2.3% by Q1 2020 and then dropping to 2.1% thereafter. The consensus opinion of independent forecasters quoted in the report is also favourable, suggesting the CPI will track close to the 2% target for the next three years.

Last year was notable for the way average pay settlements first caught up with and then outstripped inflation, giving employees a real increase in their earnings. Despite Brexit gloom, this trend will continue, opines the Bank of England. It forecasts average weekly earnings will rise 3.25% this year. Earnings growth naturally feeds most strongly into service industries, explaining why service sector inflation in January was running at 2.5%, almost twice the rate of goods inflation (1.3%).

Sterling

The pound made modest progress last year in terms of its value against a basket of other currencies, measured by the Effective Exchange Rate Index (EERI). Its 2018 average index value of 78.5 was 1.5% up on 2017’s average of 77.3. Although sterling’s weakness helps UK exporters, it is nevertheless sobering to observe that 20% of the pound’s value has evaporated since the EERI was rebased at 100 in January 2005. Sterling’s EERI value ticked up to a 10-month high of 80.5 at the end of February as currency traders saw the prospect of a hard, no-deal Brexit receding.

More dramatic movements in the pound’s value seem certain as financial markets react to imminent Brexit developments.

120 100 80 60 40 20 0 2012

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more surprising: Germany. Struggling with slackening demand from China, the German economy is tipped to rise by just 1.1%. Looking at a range of forecasts further afield, most analysts believe the Japanese economy will remain sluggish, increasing by approximately 1% this year. Expectations for US growth centre on 2.5%; China’s GDP is tipped to rise at just over 6% this year.

Annual GDP growth %

Brent crude oil averaged $71 (£54)/ barrel last year, 31% more than in 2017.

This rise, which confounded the majority of long-range forecasts, stemmed mostly from US sanctions on Iranian oil exports. Brent fell sharply in November and December on news that oil stocks were high, ending 2018 at just over $50/barrel. OPEC and some non-member countries agreed in December to cut production, hoping to firm up prices. Sure enough, Brent rose to an average of $63 in February.

Most analysts expect Brent to remain relatively soft this year, dampened by forecasts of slowing global economic growth. The US government’s Energy Information Administration’s latest outlook (February) anticipates Brent will average $61/barrel in 2019. The Bank of England also uses $61/barrel as the basis for its latest projections.

Translating $61/barrel into a forecast for an average bulk diesel price for 2019 is fraught with danger. Much depends on the volatile pound to dollar exchange rate, itself plagued by the twin uncertainties of Brexit and US trade policies.

Nevertheless, a best-case scenario would probably produce an average bulk diesel price (full loads) of around 95ppl. We believe the worst-case scenario could push diesel as high as 115ppl. But our central projection puts diesel’s 2019 average at 102ppl to 106ppl.

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11.3.19

07/03/2019 12:18:38

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07/03/2019 09:59:08

Viewpoint

motortransport.co.uk

Let operators make sensible choices

W

Steve Hobson Editor Motor Transport

ith clean air zone proposals coming thick and fast it is hard for operators to keep up. Here at MT Towers we are doing our best to keep you updated, but with more than 30 local authorities tasked by the government to come up with local plans to clean up urban air quality, the situation is going to get very confusing.

One theme that is emerging is that Euro-6 diesel trucks and buses seem to have acquired sainthood status, with everything built before 2014 now demonised as dirty diesel to be fined out of city centres.

It is of course true that Euro-6 vehicles do produce very low NOx and particulate emissions, but blanket bans on anything other than Euro-6 is a sledgehammer to crack a nut. Such simplistic policies are in danger of missing the point of a clean air zone, which is to ensure that the air we breathe meets EU health standards.

What causes most pollution at the periods of poorest air quality, ie commuter rush hours? Cars and buses. Not Euro-5 or even Euro-4 trucks. But if councils want to ban non-Euro-6 trucks from entering city centres between say 6am and 9am and 4pm and 6pm then that might make some sense. It would allow operators and, more importantly, their customers to make sensible choices about the vehicles they use and when they make deliveries.

What happened to the idea of getting freight delivered on quiet vehicles out of hours? It was mainly opposition from customers who did not want to pay someone to be at the back door of their shop, pub or restaurant at night.

Maybe local authorities should give these firms more of an incentive to take deliveries out of peak hours and that would improve both air quality and the efficiency of essential freight deliveries.

Use technology to boost driver performance A Mike Hemming UK director, Catalytix, Masternaut

s Brexit looms and driver shortages are at an all-time high, careful use of driver technology can retain confidence and support recruitment in the industry. Happy drivers are long-standing members of a team and operators should ensure they are doing everything they can to ensure their personal wellbeing and job satisfaction. People are more likely to change their behaviour in a positive way when they receive immediate rather than delayed feedback.

In-cab coaching devices provide drivers with instant feedback on driving performance, detecting wasteful and dangerous driving.

Masternaut’s technology enables drivers to improve their skills through constant positive feedback. Drivers’ behaviour can be monitored through in-cab coaching devices, which alerts them when harsh driving events are detected, including rapid acceleration, braking and cornering, idling of the engine and speeding. The light bar notifies the driver the extent of the offence in real-time, allowing for an instant rectification.

Daily walk-around checks are a paper-heavy process, involving filling in a form to assess its condition or highlight damage. To reduce administration and improve efficiency for drivers, our Smarter Driver app has been upgraded to allow drivers to carry out vehicle checks electronically.

Drivers run through a 20-point checklist on a

20 MotorTransport MTR_110319_020.indd 20

smartphone, swiping right if the item is in good order, left if there is an issue to report.

Recruiting is also a challenge at a time of uncertainty for any company but trialling new drivers with the support of Masternaut can be a less stressful than recruiting blindly. Companies can place new recruits on probation and monitor driving behaviour before making a decision to employ them permanently.

Our non-intrusive CAN vehicle tracking device reads data straight from the vehicle’s computer, which managers can access immediately, including fuel consumption, mileage, speed, acceleration and braking, so over-revving and idling can be identified.

Logistics companies are the same as any business in that they need to watch the bottom line and someone is accountable for managing budget versus resource. Masternaut offers a combination of industry-leading fleet management systems that allow companies to gain an unparalleled level of insight into their business, thus empowering them to make strategic decisions about when and where to recruit.

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 Head of content Chris Druce 2158 Deputy head of content 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 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

11.3.19

07/03/2019 12:34:10

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07/03/2019 10:02:44

The big cell Hydrogen is increasingly looking like the HGV fuel of the future. Hayley Pink reports

L

ast month’s agreement by EU law-makers set a binding target for reducing HGV carbon emissions: a hefty 15% cut by 2025 and 30% by 2030.

Criticised by the European Truck Manufacturers’ Association (ACEA) as expecting too much, too soon from manufacturers, the regulations are coming nevertheless.

Truck makers must reduce CO2 output from their HGVs by 3% each year to achieve the aims.

At the same time, domestic air quality strategy continues to drive the agenda towards full zero tailpipe emissions to make towns and cities healthier for their residents.

Combined, truck makers have a huge task ahead of them in the next 10-15 years to move to low-carbon, zero tailpipe emission technology across their product ranges.

“The EU coming out with their directive is a real watershed moment I think. I don’t think anyone really knows yet [what the next decade will hold in terms of technology],” says global commercial vehicle expert Tim Campbell, MD of Vahana Automotive. “All the OEMs have different opinions. It’s a really great time to be involved in automotive.”

While the route for cars and LCVs may seem on track for electric to take centre stage, the journey is less clear when it comes to heavier commercial vehicles.

Speaking at last year’s Freight in the City Expo about the government’s Road to Zero Strategy, Bob Moran, deputy director, head of environment strategy at the DfT, said: “Clean freight strategy is difficult… but we’ve got to solve it.”

Both natural gas and battery-electric have started to gain real momentum as an alternative to diesel, with OEM models available commercially or in advanced stages of trials.

The low-carbon benefits of biomethane have proved a good fit for trunking operations, while the zero tail pipe benefits of electric are a clear alternative for shorter, urban duty cycles.

But what of hydrogen? To date, the technology has gained traction in the passenger car sector, as well as with buses.

However in the past 18 months a flurry of headlines has raised its profile as a potential key HGV fuel for the future, both in long-range and urban applications. This has included US start-up Nikola promising a European spec long-haul tractor unit with a network of refuelling stations, through to OEMs Toyota and Hyundai announcing a move into road haulage applications after success with cars.

22 MotorTransport MTR_110319_022-025.indd 22

Hydrogen is used to power vehicles in two ways: most commonly through the use of a fuel cell to power an electric motor, or by burning it in an internal combustion engine (ICE).

A fuel cell uses the chemical reaction of hydrogen with oxygen to generate electricity to drive a motor.

They are extremely clean, emitting only water, and operate near silently as they do not have any moving parts.

A fuel cell does not need to be recharged like a battery, but continues to produce electricity until the hydrogen is used up.

Refuelling times are very similar to current diesels, compared with lengthier periods needed by batteries to recharge.

Fuel cells can boost the range of an electric vehicle far beyond that possible with existing battery technology.

Dual fuel

The second way to use hydrogen in vehicles is to burn it in an ICE. Commercially available dual-fuel systems using this method combine compressed hydrogen stored in tanks on the vehicle with either petrol or diesel to power the engine (see box, page 25).

Conversion systems can be fitted to a variety of commercial vehicles, from large vans and ambulances up to RCVs and specialist models. Using an engine control system, a percentage of diesel is displaced by hydrogen. Once the hydrogen is used up, the vehicle can still be operated on conventional fuel.

While not a zero tailpipe emissions option like fuel cell hydrogen vehicles, the dual-fuel system can still significantly reduce both NOx and carbon emissions compared with a diesel counterpart.

The Low Carbon Vehicle Partnership reports that during trials using a ULEMCo dual-fuel Ford Transit, the converted vehicle produced 40% less NOx than a standard diesel van.

However, when it comes to CO2 reduction, no matter which technology is used, it is essential to use a sustainable source of hydrogen to gain any benefits.

Indeed, hydrogen produced in an industrial process using standard grid electricity or converted from natural gas can potentially have a very high carbon footprint.

This is of course exacerbated when tanked to an operator’s site by diesel-powered lorries.

However, sustainable production of hydrogen using renewable energy can offer a solution. ➜ 24 11.3.19

07/03/2019 13:01:22

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07/03/2019 10:08:56

Alternative fuels Sheffield-based ITM Power is a clean energy company that has been rolling out a series of renewable hydrogen filling stations across the UK. These produce hydrogen via on-site electrolysers that split water into oxygen and hydrogen using electricity, all powered by surplus renewable energy supply.

“The electricity can come directly from renewables. When this is done, it has the added benefit to the electricity grid operator to offer a service which balances the grid,” says Rebecca Markillie, ITM Power communications manager. “This enables more renewable energy to be used, in a predicted and scheduled manner.

“When this process is used, you generate the hydrogen gas on-site, which eliminates the requirement for fuel deliveries, thus further reducing the carbon footprint of the fuel.”

There are seven ITM public access refuelling sites across the UK, predominantly around London, but also in South Yorkshire and Scotland. Two more are set to open in Birmingham and Gatwick in the next few months, with more planned.

ITM is working with fuels giant Shell to establish a network of renewable hydrogen refuelling facilities at petrol stations nationally. There are also additional hydrogen refuelling stations in operation in the UK through different fuel providers, with the total around the 15 to 20 mark today.

Public infrastructure

To help boost public infrastructure, the government has provided £23m in funding towards deployment of hydrogen stations and vehicles nationally.

Back-to-base solutions also exist for operators, which for early adopters may seem a logical move if they have the funds to invest. These range from compressed (ideally low-carbon) hydrogen being brought in on tankers, to installation of an electrolyser, ideally powered by renewable energy.

We have yet to see a commercially available hydrogen fuel cell-powered HGV hit the market, although a breakthrough on this front appears imminent.

South Korean manufacturer Hyundai Motor announced at IAA Hannover last year its plans to sell 1,000 heavy duty hydrogen fuel cell trucks into Europe over the next five years, with roll-out starting in late 2019.

Hyundai’s futuristic-looking truck (pictured) will be brought to market in Switzerland to begin with in partnership with Swiss hydrogen company H2 Energy (H2E), which will ensure a “robust supply chain” for renewable hydrogen is in place.

The 4x2 configuration 18-tonne truck (34 tonne including trailer) has a range of around 250 miles and can be refuelled in as little as seven minutes.

Shortly after Hyundai’s announcement last September, Nikola Motor Company revealed plans to develop a European version of its highly publicised hydrogen-electric truck in response to “widespread interest” from industry.

The Nikola Tre has 500 to 1,000hp, 6x4 or 6x2 configurations and a range of 300 to 745 miles depending on options.

“This truck is a real stunner and long overdue for Europe,” says Nikola Motor Company founder and CEO Trevor Milton.

“It will be the first European zero-emission commercial truck to be delivered with redundant braking, redundant steering, redundant 800V DC batteries and a redundant 120kW hydrogen

motortransport.co.uk

fuel cell, all necessary for true level 5 autonomy. Expect our production to begin around the same time as our US version in 2022-2023.”

In the US, Nikola is to work with Nel Hydrogen on the accompanying national refuelling infrastructure to support its trucks.

It says it will also do the same for European countries.

By 2028, Nikola is planning on having more than 700 hydrogen stations across the US and Canada, with its European stations online around 2022 and projected to cover most of the European market by 2030.

Meanwhile, Dutch manufacturer VDL is testing a prototype 27-tonne fuel cell range extended rigid truck, alongside its own mobile refuelling system in six locations across Germany, the Netherlands, Belgium and France.

Renault Trucks has also trialled a 4.5-tonne Maxity, developed with Symbio FCell, with the French post office. Renault and Symbio are also gaining traction with their fuel cell rangeextended Kangoo ZE H2 van. Deployed in the UK with a full support package from Arcola Energy, it is on the roads with operators like Commercial Group, BAM Construction and City Sprint and offers a zero-emission range of up to 250 miles. Arcola is also working on larger models, including a 3.5-tonne fuel cell Transit with a target range of 200 miles and payload of 1,000kg.

In Los Angeles, Toyota and Kenworth have been collaborating on a couple of heavy-duty fuel cell programmes.

HGVs create a significant percentage of the annual emissions output at the Los Angeles ports, and the trials form part of a number of measures in the city’s Clean Air Action Plan to reduce harmful pollutants.

Toyota’s Project Portal saw the first generation of its Mirai fuel-cell-powered hydrogen HGV hit the roads in summer 2017 on drayage work between Long Beach and Los Angeles ports.

Following 10,000 miles in operation, a second-generation truck now has an extended range of 300 miles.

A second project led by PACCAR-owned US truck-maker Kenworth, featuring Toyota technology, sees 10 of its heavy duty fuel cell trucks destined for drayage work at California’s ports.

The 565hp zero-emission T680 day cab has a range of around 150 miles and has been tested in Seattle before heading to LA.

Lot of promise

Stephan Olsen, Kenworth director of product planning, said: “There is a lot of promise, and we see the day where Kenworth’s zero and near-zero emission trucks could be a common sight in regional operations.”

Also in the US, parcels firm UPS has been trialling its own medium-duty fuel cell delivery trucks with an extended range of 125 miles as part of its Rolling Laboratory of alternative fuels.

Announcing the project, UPS said it was “an important step toward demonstrating the commercial viability of zero tailpipe emissions trucks to fleet operators and the developing FCEV supply chain”.

Although none of the European OEMs have yet to revealed concrete plans for developing a hydrogen fuel cell electric truck 24 MotorTransport MTR_110319_022-025.indd 24

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range, the technology is most definitely on the radar for their R&D teams.

Scania, for example, in December announced a project to develop a fuel cell refuse truck with Swedish waste operator Renova, expected to be delivered later this year. Project manager Marita Nilsson, Electric Powertrain Technology at Scania, says: “Fuel cells constitute a promising technology in the needed decarbonisation of transports.”

Scania is also developing four fuel cell distribution trucks with a range of 300 miles for Norwegian food wholesaler Asko, which has opened its own production plant for sustainable hydrogen.

So while hydrogen may be a little late to the HGV party compared with gas and electric, it is certainly making up steady ground on the R&D front. ■

DUAL FUEL Liverpool-based ULEMCo specialises in converting large vans (3.5 tonnes and upwards) and lorries to run on dual-fuel hydrogen and diesel. To date, the company has put more than 40 vehicles into operation.

ULEMCo is working on the government’s £20m Low Emission Freight Trial (LEFT), which launched in April 2017, alongside operator test partners including Ocado and Veolia.

The HyTime project aims to demonstrate the carbon reduction and air quality benefits of dual-fuel hydrogen technology.

“The approach we have proven in the LEFT is that we use an engine control system that enables us to adapt any vehicle,” says ULEMCo CEO Amanda Lyne. “This would give around a 25% to 30% displacement of diesel on an energy basis [on an average RCV duty cycle]. On the Transit vans it is even better than this, as we’ve done a bit more work with the OEMs’ database. In the future, we’d like to do this with the larger ones too.”

Vehicles can either be operated in diesel-only or dual fuel mode with hydrogen blended in. “From an operator point of view, it’s an easy, low-risk way of reducing carbon energy,” says Lyne.

When ordering a new truck, ULEMCo says the additional cap-ex to convert the vehicle to dual fuel would be around 25% to 30% for a one-off unit. However, if a fleet were to convert between 20 to 30 trucks, the price would reduce significantly.

ULEMCo’s technology is aimed at fleet operators looking to go beyond clean air zone requirements, set at Euro-6, in an effort to decarbonise their fleets.

“We’re targeting Euro-6 at the moment, because we are providing the next step,” says Lyne. “You have to want to decarbonise your fleet and be addressing air quality.”

Looking to a zero tailpipe emissions future, ULEMCo is also working on an Innovate UK project that enables an internal combustion engine to run entirely on hydrogen.

In lab tests, the Mega Low Emissions technology has already proven successful and ULEMCo is keen to work with an OEM to move it to the next level. “With this MLE demonstrator, we are showing that 100% hydrogen fuel in combustion engines is a practical and cost effective option. It sits well alongside the hydrogen dual-fuel conversions that we have already implemented commercially,” says Lyne.

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Fuel cards

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House of cards Fuel cards could play a major role in the adoption of alternative fuels, but will operators be tempted to try their hand?

Simon Jack reports

26 MotorTransport MTR_110319_026-030.indd 26

D

iscounted fuel prices, vital management information, the ability to pay for extra services such as tolls and overnight accommodation – fuel cards already play an important part in many operators’ businesses. But there are also now hopes that the cards could be instrumental in expanding the use of alternative fuels as the pressure to decarbonise mounts.

Some believe that as the infrastructure grows for supplying liquefied natural gas (LNG), compressed natural gas (CNG), biofuels and electric charging, so too will the use of cards.

In turn, as the use of cards grows so could the appeal of using alternative fuels.

However, it is early days, and chief operating officer of fuel card supplier Fleetcor Paul Holland says vehicle operators need a solid commercial reason to migrate. “There will

certainly be a tipping point at some stage, but in the truck market in the medium term diesel will be the predominant fuel,” he says.

“The key thing is that fuel cards will play an important role in any kind of alternative fuel solution. Drivers will need a method to refuel and companies will need a way to manage information.”

Trump card

Fleetcor supplies the Keyfuels card for commercial vehicle operators, the Allstar card for a wider range of companies and drivers and, under the Fuelcard Company brand, it also acts as reseller for a number of cards including those from Shell, Esso, Texaco, the RHA and FTA. The company is already in discussions with LNG and CNG suppliers about their plans for developing their networks in the future.

“There is no technical or commercial ➜ 28 11.3.19

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Fuel cards

reason why fuel cards cannot be used to purchase alternative fuels,” Holland says.

As the market changes, some operators may end up running fleets with vehicles powered in different ways. In this situation, fuel cards could help with efficiency. “It is clear that the world is becoming a more complicated place.

Fuel cards could help bring things together in a more standardised way,” he believes.

However, some are more sceptical about using cards for buying alternative fuels at present. Radius Payment Solutions UK regional director Jonathan Haseler says there is little demand to use them for this purpose.

Challenges

The company supplies own-brand cards including those under the UK Fuels brand, and acts as a reseller of company cards including Shell, BP and Esso. These can be used to purchase diesel, petrol, liquefied petroleum gas (LPG), gas oil and exhaust additives such as AdBlue.

“Currently, biofuels don’t offer the same mileage as diesel, LNG tends to be expensive, and there is not an adequate network of CNG fuelling stations or even availability of vehicles.

Similarly, the range of electric vehicles and speed of charging has yet to be perfected to inspire widespread adoption for commercial use,” Haseler says.

RHA technical director Paul Allera believes there are particular challenges for smaller hauliers moving to alternative fuels. Many would not want to lose the discounts they receive on fuel prices by using cards to buy diesel. They also might find it difficult to adjust their fleet.

“The take-up will be greater among larger 28 MotorTransport MTR_110319_026-030.indd 28

motortransport.co.uk

firms that can keep fuel on-site. Smaller operators may not be able to afford the capital investment. Even if they are converting an existing truck for dual fuel they are not going to spend £20,000 on a vehicle whose value may have already been written down,” he says.

There is some progress being made towards adding alternative fuels to cards used in Europe.

The AS24 card, owned by the Total group, can be used to buy CNG in France and LNG in Italy as well as more traditional fuels and additives like diesel and AdBlue.

A spokeswoman for the company says: “We are working to extend this offer to other European markets, including the UK.” Shell says it aims to provide one card and one invoice for customers no matter what fuel they use. Electric vehicles can use its 75,000 public charge points across Europe using its subsidiary NewMotion’s roaming network which includes some Shell forecourts.

Alternative-fuel duty

Gas suppliers could play a crucial part in enabling fuel cards to be used. Gasrec chief executive officer Rob Wood believes that cards will inevitably be introduced in the future. There are discussions with other parties, but so far nothing has transpired.

“We haven’t seen it take shape yet, but it will happen in the future that we accept third-party cards,” he predicts.

Wood believes that the use of gas – and the likelihood of fuel cards being used to purchase it – will be stimulated by OEMs, likeVolvo, IVECO, Scania and Mercedes-Benz, developing more gas models and by the government’s ➜ 30 11.3.19

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Fuel cards

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CALLING CARDS Larger operators who have made a commitment to using gas power expect fuel cards to become available in the next few years.

John Lewis Partnership plans to replace all of its 500 diesel-powered heavy delivery vehicles with those using biomethane by 2028. They will run on fuel derived from food waste and waste materials – more than 60 trucks, each of which can run up to 500 miles, are in use across its Waitrose & Partners and John Lewis & Partners brands.

General manager of central transport for the John Lewis Partnership Justin Laney says: “We have individual arrangements with the companies we use to supply compressed biomethane and I would not expect that to change in the near future.

“However, over time and as the networks expand, I would expect arrangements to be similar to conventional diesel. That would entail providers working together to provide a range of options including the ability to purchase alternative fuels from multiple suppliers using a single fuel card.”

Clipper Logistics transport operations director Mick Doe also believes that fuel cards for gas will come. The company took on 11 new IVECO trucks powered by LNG with a range of 930 miles in

decision to set alternative-fuel duty at half of that for diesel until 2032.

“As soon as customers say fuel cards will make their lives easier and that not using one is reducing their appetite for gas, it will happen,” he adds.

At present most LNG and CNG users operate using a key fob that records how much fuel is being put into a vehicle. For health and safety reasons these are only given to drivers after training.

Some customers primarily use gas for trunking movements where the vehicles return to base each night and fill up from refuelling facilities at their distribution centres – the company recently built a refuelling station for Ocado at its Hatfield distribution centre.

However, there are some open access sites, open to all Gasrec customers, including one

30 MotorTransport MTR_110319_026-030.indd 30

October. Currently, Clipper has two main suppliers for gas, each of which supplies a fob for drivers.

“The drivers draw fuel as and when required, and the supplier produces an invoice weekly with backing information to show how much fuel each vehicle has drawn,” he explains.

Doe believes the next logical step would be to offer a card that could be used for both diesel and gas purchases and, ultimately, to be followed by one that also offered the ability to recharge electric vehicles.

Much depends on how quickly the alternative fuels market grows. “The industry is in a chicken and egg situation. The gas suppliers are reluctant to invest in their infrastructure until there is a demand, and the operators are reluctant to invest in the equipment unless the infrastructure exists,” Doe states.

at DIRFT distribution park in Daventry and one in Bridgwater. In addition, some dedicated sites will already provide gas for other hauliers.

BOC uses key fobs in a similar way, as business manager for clean fuels Geraint Bruton explains. “The majority of our customers have refuelling facilities on their own sites. We therefore charge for the LNG as it is delivered to them in bulk,” he says.

Tipping point

However, he believes that fuel cards will be used in future, as does Calor sales manager for transportation Mark Gilks. In France, Calor’s sister company Prima Gas already allows customers to buy fuel using an Avia fuel card.

“Use of fuel cards could be a good way of moving the industry forward. The tipping point will be an increase in the number of vehicles

looking to refuel en route, but that could be a couple of years away,” Gilks says.

In the UK, Calor customers, like others, at present use key fobs to draw off fuel at their own facilities or at one of six public sites.

Calor, which provides dual-fuel retrofits for existing fleets, LNG and bioLPG made from feedstocks, is looking to increase the number of public sites and, already, some dedicated sites can be used by other customers if the operator agrees.

“It depends on the location. If there are a number of hauliers nearby we will certainly have a conversation about a third-party agreement,” Gilks explains.

There are challenges to be overcome before alternative fuels grow enough to justify fuel cards but it is something that most believe the transport industry is moving towards. ■

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Apprenticeships

motortransport.co.uk

We’ll take three The Apprentice Levy may have drawn plenty of criticism, but Mark Thompson Transport has scored a significant success with the scheme. Steve Hobson reports

T

he transport and logistics industry has paid an estimated £130m in Apprentice Levy taxation since its introduction in April 2017, but has reclaimed only a fraction of this sum to fund the training of new or existing staff. With Brexit expected to lead to a further exodus of EU drivers and warehouse staff, the levy was supposed to help industry plug the gap by recruiting and training more UK workers.

According to the FTA, EU workers represent more than 12% of the UK’s logistics workforce, including HGV and van drivers, fork lift operators and warehouse personnel.

The levy is payable by employers with an annual wage bill of more than £3m and they must pay 0.5 % of their payroll into a government account. They then have a rolling 24 months to reclaim the funds to meet the cost of approved apprenticeship training – if they fail to meet the deadline the money goes to the Treasury.

Only apprenticeships which last at least 12 months can be funded and the logistics sector has just a handful of approved Trailblazer apprenticeships including: Logistics and supply chain LGV driver Level 2; Logistics and supply chain operator Level 2; and Logistics and supply chain warehouse operative Level 2.

Contribution

THREE’S COMPANY: Transport manager Paul Prior, second right, with Daniel Robb, Caitlin Roberts and Jack Tinsley

32 MotorTransport MTR_110319_032-034.indd 32

Despite the levy drawing a tide of criticism, Mark Thompson Transport (MTT) in Warrington is successfully using the funding and has claimed back all the firm’s contribution by employing three apprentices, Jack Tinsley, Daniel Robb and Caitlin Roberts, on logistics and supply chain operator apprenticeships.

James Scott, operations director of MTT, launched the apprentice initiative in June last year, and initially tasked HR adviser Rachel Threlkeld and transport manager Paul Prior (along with Mantra Learning business improvement consultant Paul Manfredi) with finding one apprentice for the company.

It was three months down the line when the pair reported back to Scott with three outstanding candidates for the position. Scott made the decision to take on all three, and the programme has never looked back.

“There has been quite a negative response to the levy, and a lot of people just see it as a tax,” Prior says. “Most companies try to use it to train drivers but we identified a need for more office staff, especially traffic oper- ➜ 34 11.3.19

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Apprenticeships

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CATCHING THEM YOUNG

ators. We wanted to recruit one apprentice to spend a year in the traffic office, a year doing their international CPC and then a year getting their HGV licence so they would be the full package.”

The recruitment process threw up three candidates with different skills sets so all three were offered apprenticeships.

“These three have carved out roles for themselves already,” Prior says. “They are not here just to make the tea – they are coming up with ideas and have had a massive impact on this business.

“Caitlin has come up with a system for filing driver daily walkaround checks, Jack is looking at the IT we use for managing drivers’ hours, and Dan understands the transport planning side of it. But we switch them around so they get to spend time in every part of the business.”

MTT is based in Warrington and runs 209 trucks hauling a wide range of goods for customers across north-west England. It employs around 160 people and relies on a pool of 60 regular agency drivers to fill shifts, especially in the Christmas peak.

Skilled people

Part of Kinaxia Group since July 2017, the haulier is growing fast and needs skilled people to cope with its ambitious expansion plans.

“There is a driver shortage but it’s not as big as people say because a lot of poor quality hauliers have gone out of business,” says Prior.

“Where we were short was staff to manage the drivers. We have 18 operating centres across the whole country so the management workload is horrendous.”

After completing the traffic office operator Level 2 scheme in year one, the plan is to move the apprentices on to Level 3 in year two.

MTT is working with Manchester-based training provider Mantra Learning, and the firm’s Manfredi says that, while the level 3 scheme has not yet been written and approved, he is confident it will be ready in 2019. In year three, the apprentices will move onto LGV driver apprenticeships.

“Currently this only includes one licence, category C, so hopefully by then it will include both category C and C+E licences,” Manfredi says. “Mark Thompson is looking for the full package, someone who can do and understands everything. They might not be a full-time HGV driver but they need to understand it to be a transport manager.”

34 MotorTransport MTR_110319_032-034.indd 34

Everyone in the MTT traffic office has an HGV licence so if a vehicle needs to be moved or taken for a service anyone can jump in the cab and do it.

Maybe one reason road transport has failed to claw back its Apprenticeship Levy contribution is the difficulties in attracting enough young people to work in the industry. It is not high on most school leavers’ radar when it comes to choosing a career and it is no surprise to hear that two of MTT’s recent intake already had connections with the industry.

Jack Tinsley, 16, says he has “always been into trucks” and already has a family link with MTT. “My mum works in finance here and my dad works in Merseyside Police’s regional commercial vehicle unit,” he says. “I want to get my CPC and understand how the business runs so I can make a difference.”

Caitlin Roberts, also 16, has transport connections too. “My mum works at a different transport firm so I have been around it all my life,” she says.

“I am more interested in compliance and making sure we run legally. I also want my CPC and HGV licence so I can relate to the drivers.”

Tinsley and Roberts will be just 18 when MTT plans to put them behind the wheel, first in vans and smaller rigid trucks, but Prior says there will be no problems with insurance.

“Some insurers won’t touch anyone under 25,” he says. “We are insured with the NFU and they have no stipulation on age. Insurance companies have realised that if they don’t allow younger drivers they are going to fail because we need drivers on the road.”

Daniel Robb is 19 and has come to MTT after working as a van driver’s mate and at an aftermarket car parts retailer. “I wanted to be in the office so it was a big step to get this apprenticeship,” he says.

Apprenticeships used to be highly respected routes into a skilled trade, but have been devalued in the eyes of many school leavers in recent years as less valuable alternatives to degrees.

But Tinsley is happy to be combining studying with practical training in a workplace.

“It is more hands-on than just being at college all the time,” he says. “We don’t get told what to do and we learn in gradual steps. I was quite excited to get out of school and into a work environment.”

Roberts too was actively seeking an apprenticeship when she left school. “I was definitely

Mantra is a supporter of Think Logistics, the initiative to encourage school children in to a career in the logistics sector founded by Abbey Logistics chief executive Steve Granite, but MTT did not find its latest intake of apprentices through Think Logistics.

“We used various internet job sites,” says Threlkeld. “There are very few careers advisers in schools these days.”

Kinaxia is however keen to start working with schools and colleges in future, according to Prior.

In July 2016, Mantra launched the National Logistics Academy to provide training and apprenticeships to levypaying national logistics employers through a network of specialist logistics training providers.

“I’d like to see Mantra, the National Logistics Academy and Think Logistics addressing 11-year-olds and getting them interested in road transport,” says Manfredi. “I’d like to see trucks turn up in school car parks at open days with simulators on the back to get kids enthusiastic so they choose to come into the industry rather than just fall into it.”

ROLE MODEL: “Our apprentices are not just here to make the tea” says transport manager Paul Prior

looking for an apprenticeship,” she says. “I am not academic at all and I am better in a working environment. I wasn’t 100% sure what I wanted to do but when this opportunity came up I had an idea what was involved.”

Robb had already completed a Level 3 apprenticeship in Motorsport Engineering with his previous employer but says he didn’t want to end up in an office job. “It was just talking about it instead of actually doing it,” he says.

“It wasn’t for me.”

Recruitment campaign

MTT HR adviser Rachel Threlkeld says the company has had a very good response to its recruitment campaign.

“We already knew of Mantra so we approached them to help develop the advert that went online,” she says. “We got a lot of interest and we had so many applicants it was difficult to pick.”

Manfredi adds: “Mark Thompson offered a good package including minimum wage of £4.50 rising to £5 through the apprenticeship and a long-term career progression. We got candidates of all ages and backgrounds and it was a difficult process.

“We were looking for people who could think on their feet, be problem-solvers, get up early and work in a team. I’ve learned that you can’t advertise a traffic planner job because no one knows what it is. So you have to advertise a skills set you are looking for and find out at the interview if the person in front of you has that skill set.

“Mark Thompson was looking for one person and took three because each one had a different strength and we couldn’t decide which was the most important, so we took all three.”

Prior was particularly keen to take on a female apprentice as he wants to promote transport as a good career for women. “It has a calming effect on the drivers,” he says. “They won’t rant and rave as much at a woman!” ■ 11.3.19

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