Motor Transport 14 January 2019

Sharp ■ Informed ■ Challenging

14.1.19

INNOVATION. EFFICIENCY. RELIABILITY.

MAKE A SPLASH IN YOUR INDUSTRY

EV Cargo delivers its new operating division leaders EmergeVest, the private-equity firm that created EV Cargo from some of road transport’s best-known names last autumn (MT 26 November), has revealed who will head each of its four divisions.

EV Cargo’s operating divisions and the companies that make them up are: Express ( Pa l l e t f o r c e ) ; G l o b a l Forwarding (Allport Cargo

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Services); Logistics (CM Downton, NfT and Jigsaw) and Technology (software firm Adjuno).

The new senior management structure includes Palletforce CEO Michael Conroy taking on the same role at EV Cargo’s Express division.

Clyde Buntrock, vice president at Allport Cargo Services,

becomes chief executive of Global Forwarding.

Adjuno chief executive Craig Sears-Black is also now chief executive of the Technology division at EV Cargo, and EV Cargo boss Heath Zarin doubles up as chief executive of the Logistics division.

EV Cargo has 9 million sq ft warehousing space, and

approximately 5,000 employees including 2,200 drivers.

Despite a group turnover that would have catapulted it into 11th place in 2018’s MT Top 100 list of the largest companies in UK logistics, MT understands that the individual companies making up the EV Cargo division will retain their identities and will not be rebranded.

Haulier escalates battle with pallet network Palletways, citing its delivery drivers’ safety as paramount

Rase refuses 750kg pallets

By Carol Millet

Palletways member Rase Distribution has hardened its stance on pallet weights and is now refusing to deliver anything over 750kg in weight to residential addresses.

In November last year the Lincolnshire haulier informed Palletways and its members it would no longer deliver any pallets over 750kg on tail-lift deliveries to residential addresses unless Rase could divide them into lighter loads.

The ban followed a risk assessment by the haulier, which concluded tail-lift deliveries to domestic addresses of pallet loads of more than 750kg posed an unacceptable risk to drivers.

However, last week the company, which is owned by HW Coates, took the restriction further to include even those loads over 750kg that are divisible.

Rase Distribution MD Geoff Hill told MT: “We have Focus:

Freight

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in

the

decided to make a stand now on this issue as it is too important to ignore. We will no longer split those 750kg-plus pallets that are divisible – as of this week all pallets over 750kg will be returned to the [Palletways] Fradley depot.”

Hill added: “If the weight of City

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the pallet is outside of the scope of our Safe System of Work policy, which has established there is a risk to our drivers delivering anything over 750kg, then we won’t pay the cost of hiring a courier for those pallets we return,” he said.

In correspondence seen by

Earned

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MT Palletways stated that Rase has a contractual obligation “to deliver all manifested freight including tail-lift deliveries to residential addresses up to 1,000kg.

“If there is a situation when Rase is unable to provide this service, then a courier should be arranged and the costs passed to Rase”.

However, HW Coates MD Tom Coates said: “The question is, can a contract that requires a firm to deliver a pallet that that company’s risk assessment has shown to be an unsafe weight, be enforced?”

He pointed to the death of HGV driver Petru Pop in November 2016. Pop was crushed to death by a 1,400kg pallet of tiles he was delivering to a domestic address in High Wycombe, Bucks, for Reason Transport, which was a Palletways member at the time.

Coates said: “Our argument is clear. When Petru Pop died

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making that delivery it made home deliveries a known risk.

Known risks have to be assessed under law. We assessed that known risk and found it posed an unacceptable risk to our drivers. So we set the limit at 750kg.

We cannot ignore that risk under law,” he said.

Pallet ways had not responded to a request for comment as MT went to press.

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10/01/2019 12:19:31

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Cleaner air halts proposed Clean Air Zone Southampton City Council has abandoned plans to charge vehicles to enter its proposed Clean Air Zone (CAZ).

It said £15m-worth of air quality projects already in action over the past three years have slashed nitrogen dioxide (NOx) levels by 24% in the most polluted areas.

These include cleaner city buses, freight consolidation, cleaner fuels used at the port and the introduction of lowemission taxis.

The council has also proposed a series of measures it said will reduce NOx to within legal limits by 2020.

For freight operators these include: offering opportunities for businesses to assess and trial freight consolidation; and an accreditation scheme for HGV operators so businesses can identify those operators that are least polluting.

Councillor Steve Leggett, cabinet member for green city, said: “Over the past few years we’ve led on a range of projects that have made a noticeable difference and made our air cleaner from pollution.”

Emslie lands new role at Swain Group The Swain Group has announced the appointment of David Emslie as its strategic development director.

Emslie was most recently sales director at Canute Group, having served 11 years at the firm that was placed into administration before Christmas (see page 6).

His employer said that in his new role Emslie will be responsible for developing the company’s range of services as well as increasing its scope where appropriate. Emslie will work alongside Swain Group commercial director Matthew Sweet, based at the business’s headquarters in Rochester, Kent.

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Hazchem Network swaps Rugby hub for a larger site in Hinckley, Leicestershire

New home for Hazchem

By Carol Millett

The Hazchem Network is looking to boost volumes this year after opening a new 10-acre hub in Hinckley, Leicestershire last week.

The move follows the arrival of MD Rob Symes, the replacement for co-founder Ali Karim, who left the network in November of last year.

Karim launched the network with Jim Scanlan in 2004, increasing volumes from 43 pallets a night at launch to current levels in the thousands.

Symes, a qualified chemist, joined Hazchem from HW Coates, where he was HSEQ director. HW Coates is a Hazchem founder member and the network’s major shareholder.

Speaking to MT, Symes said the new site, which replaces the Rugby hub, opened on 2 January.

“The new hub is a statement of confidence in the future,” he said. “It’s 10 acres and 200,000sq ft and it’s all ours – no landlords, debt to service

or restrictions. It’s bang in the middle of the country and gives our 50 members confidence for our growth.”

The network’s previous home was 58,000sq ft in size.

While the hub could also see membership numbers increase, Symes cautioned that new members must be able to meet Hazchem’s strict safety criteria.

“Before we take on a new member we audit the company to make sure it can transport chemicals safely and we train it and give it advice on what it needs at its depots, and its vehicle and driver training requirements to ensure it is capable of being a safe operator.”

Symes said the new hub will allow the network to boost

volumes, which have been expanding at around 10% year on year.

To input into Hazchem you have to be a member: the network does not take direct input or have hub accounts.

“Nor do we, or will we, do home deliveries,” said Symes, “pallets to residential addresses are unsafe and unprofitable for our members.”

Fortec to learn if it faces HSE sanction shortly Fortec is expected to learn shortly if it will need to spend any of a £500,000 contingency fund put in place after a site incident in 2016 that triggered an HSE investigation.

Fortec MD Adrian Bradley, confirmed to MT that the inci-

dent occurred in October 2016, but added: “There has since been no further contact with the HSE and no further action has as yet been taken.

“The reserve in the accounts was merely incorporated as a contingency.” No further

details about the incident were supplied.

The pallet network’s most recent accounts for the year to 30 December 2017, show a £500,000 provision carried over from the previous reporting period in 2016.

The notes to the accounts of the Watford Village, Northamptonshire-based pallet network, explain that “the company expects with reasonable certainty to receive a fine from the HSE in relation to a site incident, which occurred during 2016 and has provided accordingly”.

MT approached the HSE for comment and a spokeswoman for the executive said: “The HSE investigation is in its latter stages with expert opinion being sought on compliance with health and safety standards. A decision on enforcement will be taken at the conclusion of the investigation. Unfortunately it would not be appropriate for us to provide further details at this stage,” she added.

Bradley rejoined Fortec, where he was previously operations director, late last year as its first official MD since 2014 and the departure of Neil Hodgson (MT 10 December).

MotorTransport 3 10/01/2019 16:28:37

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Competition Appeal Tribunal earmarks date in June to decide if claims can go ahead

Hearing date set for big six cartel case

By Chris Tindall

The hearing to decide whether compensation claims can go ahead against the big six European truck manufacturers over historic price fixing will be heard in June.

At an initial review meeting in December before the Competition Appeal Tribunal (CAT), an order was issued to set aside 3-7 June when the tribunal will decide on the applications to bring collective claims.

Weightmans is one of the law firms seeking to act for the class representative and its client, UK Truck Claims (UKTC), filed an application at the CAT seeking appointment as the class representative on behalf of truck purchasers and lessees.

Weightmans partner Phil

James said: “If the tribunal is satisfied that the application should proceed, the opt-out class claim will be authorised.

“The substantive compensation claim will then go ahead.

It is not expected that a decision will be reached on how much compensation will be available to purchasers and lessees of new trucks from MAN, IVECO, Daimler (Mercedes-Benz), Volvo/Renault, DAF and potentially Scania until 2020 at the earliest.”

The RHA is also seeking to act as a class representative.

Chief executive Richard Burnett, said: “We already have well over 7,000 truck operators registered and signed up to the RHA’s claim who, based on current fleet sizes, account for more than 100,000 trucks.

“We believe the RHA, as the

only trade association dedicated to haulage in the UK, is best placed to lead the claim for compensation against the EU truck cartel on behalf of the UK haulage industry and we are ready to take on this important role.”

The tribunal has indicated that both the RHA and the

UKTC schemes could in theory be approved.

It is also possible that both schemes fail to win approval.

A third group action, headed by law firm Edwin Coe, has also been registered, but litigation lawyer Zahira Hussain told MT it had not yet served proceedings.

NEW ARRIVALS: Hoyer has bolstered its UK Petrolog fleet with 26 new Scania P-series trucks, a mix of additional vehicles and replacements. The 450hp HGVs are operating from Purfleet and Grangemouth, with the last of the order set to arrive and enter service in May. The order includes eight Hydrapak oil cooler specced trucks. All vehicles will be on a fixed-price maintenance package, giving Hoyer certainty over its vehicle costs for the next five years. All the trailers connected to the tractor units will be maintained at Scania’s workshops.

Liquidation of Principle Pallet Network under way with Menzies The liquidation of the aborted Principle Pallet Network has begun with Menzies appointed to handle the process.

According to papers filed at Companies House, Freddy Khalastchi, based at Menzies’ Cardiff office, has been appointed as liquidator.

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Principle Pallet Network’s bid to become the UK’s ninth pallet network ended in failure late last year, despite last-ditch efforts to revive it.

The network, originally set up by ex-Fortec directors Marcus Fischer and Neil Hodgson, was due to debut

operationally in 2016 but did not deliver within that time frame.

Having remained under the radar since, the network secured a central hub last year, and seemingly renewed momentum, with the former Birds Transport site at

1 Parsonage Street, Oldbury, Birmingham its new home.

However, Principle MD Adam Leonard confirmed in September that “sadly the project is no more” with the business essentially too far gone to get back on track for launch.

NEWS IN BRIEF Microlise is to analyse the telematics data of more than 200,000 drivers to identify its Driver of the Year 2018. The best short-, medium- and longdistance drivers will be decided before an overall winner is announced. Five categories – Young Driver, Most Improved, Lifetime Achievement, HGV Hero and Extra Mile – are also open. Nominations can be made at awards.microlise conference.com before 15 February. The winner will be named at the Microlise Transport Conference on 15 May. Roger Alm has succeeded Claes Nilsson as president of Volvo Trucks and as a member of Volvo Group’s executive board. Alm began his career at Volvo Trucks in 1989 and has worked in areas from product development to service, parts, sales and general management.

Since 2016, he has been senior vice-president for Volvo Trucks Europe.

The DVSA is introducing a payment portal for fixed penalty roadside fines to replace chip and PIN payments. The portal, available from 29 January, allows payment from any location at any time by anyone nominated by the driver, for example an employer. When a driver receives a fixed penalty at an enforcement site, the DVSA will send a text or email with a link to the portal, and onsite enforcement staff will in turn receive a text confirming payment.

Geodis UK’s losses deepened in 2017 largely because of the cost of a new site in the Midlands.

Figures for the year to 30 December 2017 show the operator increased its turnover slightly to £50.1m (2016: £49.3m) but pre-tax losses slipped further into the red, to a loss of £4.5m (2016: loss of £4.2m). It said improved profit in its Distribution & Express business was largely offset by launch costs for the new site.

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10/01/2019 09:40:24

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End of the line for Canute

DfT remains committed to on-road HGV platooning trial despite Daimler’s doubts

Platoon trial still on agenda

By Chris Druce

The DfT is fully committed to conducting a lorry platooning trial this year on UK roads despite Daimler’s announcement last week that the commercial benefits of the technology appear negligible.

Speaking at the Consumer Electronics Show in Las Vegas last week Martin Daum, CEO of Daimler Trucks & Buses, said that while Daimler remains committed to developing autonomous trucks, the company is shelving its platooning R&D programme.

The decision came after thousands of miles of real world testing failed to deliver adequate fuel savings.

Daum said that while the technology “worked in the lab” the on-road trials had revealed that the platoons’ flow was frequently interrupted by surrounding traffic that resulted in more fuel being burnt as the platoon tried to re-engage. He added that platooning may become a viable technology in the future if it could dispense with the need for drivers in the follow-

ing trucks and said that Daimler had learnt a lot about the technology.

The UK’s first on-road HGV platooning trial is due to begin soon with a convoy of three wirelessly connected DAF trucks driven in the first phase by the manufacturer’s engineers, Highways England has said.

If the first phase of the £8.5m government-funded trial is a success, a second phase will be launched in the latter half of this year. This will see the platoon incorporated

into DHL Supply Chain’s dayto-day delivery operations with specially trained company drivers operating the platoon.

However, a Df T spokeswoman told MT: “We remain committed to trialling HGV platooning and gathering evidence that will enable us to assess whether the technology is viable in the UK. “Advances such as lorry platooning can mean cheaper fuel bills for businesses, and lower emissions and less congestion for other road users.”

TRADING PLACES: Blackburn-based Kenyon Road Haulage has bought some of the assets of fellow Palletways member Gilbraith (TS) from owner Pollock (Scotrans).

Kenyon Road Haulage has taken on 18 trucks, approximately 30 staff and some of Gilbraith’s customer base, but not the business’s Blackburn depot, which Pollock (Scotrans) has retained. Speaking to MT, Kenyon Road Haulage operations manager Paul Bailey said: “This is a good move for us as it expands our presence in the area and keeps the opposition away. As we took on all of Gilbraith’s drivers it also means we don’t have to use any agency drivers.” The purchase boosts Kenyon Road Haulage’s fleet to 80 trucks. Despite the sale of some assets, ownership of Gilbraith remains with Pollock (Scotrans).

Breakfast news

Gefco Group planning to sell 40% stake in the business via IPA French-owned Gefco Group is planning to sell a 40% stake in its business later this year.

Car manufacturer Groupe PSA, which owns Peugeot, holds a 25% stake in the group after selling 75% of the firm to Russian Railways in 2012.

Last month Gefco Group presented 6 MotorTransport MTR_140119_006.indd 6

IPO documents for approval to AMF, France’s financial authority, which revealed that Russian Railways is looking to reduce its stake to less than 50%.

The papers also show that PSA plans to reduce its share to less than 10% on the basis that Gefco’s diversification strategy means the car manufacturer no longer

The reign of Almtone-owned Canute Group came to an end on 21 December, just over seven months after it began with the pre-pack administration sale of its predecessor company.

Close to 600 staff at the firm were told that the business would be moving into administration, with Begbies Traynor handling the process. It is understood that approximately 120 staff transferred to customers Saint-Gobain and Made. com under TUPE regulations.

About 20 staff were retained to assist the administrator with 450 Canute employees losing their jobs.

Begbies Traynor said: “Kirstie Provan, Mark Fry and Gary Shankland from Begbies Traynor (London) have been appointed administrators in respect of Almtone, which trades as the Canute Group, with effect from 21 December 2018. The group has been experiencing cash-flow difficulties and, despite securing an interim funding facility in November, was unable to secure the wider equity and financing needed to enable the turnaround of the group to be finalised and secure the future of the business.”

Canute’s pre-pack sale in May 2018 to Almtone left creditors nursing a shortfall of £5.3m. Since its rebirth, it has accrued more than £168,000 of fresh debt recorded as county court judgments and money owed to its former pallet network Pallet-Track.

needs to maintain such a big stake in the logistics operator.

Gefco chairman Luc Nadal said: “The IPO comes at a time when the company has proven its ability to deliver sustained profitable growth and is well positioned to harvest further growth opportunities in the sector.”

Wincanton has won two five-year contracts with breakfast brand The Weetabix Food Company.

Under the deal, the haulier will provide transport, warehousing and co-packing and will take on the operation of four Northamptonshire warehouses: three in Corby, one in Burton Latimer. It will also provide a nationwide transport operation for the delivery, management and transfer of finished goods and stock.

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Focus: Freight in the City

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Unprecendented number of concerns to city scheme will require time to analyse and act

Bath CAZ likely delayed

By Carol Millett

Councillor Bob Goodman said: “All the responses have been thoughtful and have covered a number of issues.

These include concerns about rat running and parking in residential areas outside the proposed zone, suggestions for a bigger zone, and proposals for mitigations for residents and businesses most affected by the proposal.”

A report to council leaders concludes that more time is needed to analyse the feedback and to look at possible mitigations.

Bath’s Clean Air Zone (CAZ) plans could be delayed after the council received an unprecedented number of responses to its consultation with significant numbers demanding mitigation measures for local businesses and residents.

More than 8,400 people took part in the consultation, which ran for six weeks, with the number of responses on par with the responses from much larger populations in Leeds, Birmingham and Southampton, which are also proposing CAZs.

BIRMINGHAM UPDATE Non-Euro-6 trucks will be charged £50 a day to enter Birmingham’s CAZ after council leaders approved the proposals before Christmas. The council had been considering charging non-compliant HGVs up to £100 to enter the zone, which covers all roads within the A4540 Middleway

ring road, but has settled for the lower charge. The proposals outline CAZ mitigation measures for affected hauliers, including: hauliers registered within the CAZ will be entitled to a one-year exemption for two non-compliant trucks; hauliers registered in Birmingham with finance agreements on their fleet beyond 2020 and who travel into the

CAZ will be allowed an exemption on two trucks for the first year; fleets operating in the West Midlands can apply for an unspecified cash payment towards a retrofit or the cost of a compliant vehicle.

The council is asking government for £68.7m to fund the scheme, of which £50.8m will cover the cost of mitigation measures.

Scots commit to LEZ events Need to find out more about the introduction of the forthcoming low emission zones (LEZs) in Glasgow, Edinburgh, Dundee and Aberdeen? Then put 26 March in your diary.

The Scottish Government has committed to introducing LEZs across four cities by 2020, while further areas will come into scope by 2023.

To explain how the new regulations will affect truck operators, MT is teaming up with Transport News magazine to host a Low Emission Zone Roadshow to be held at Hampden Park, Glasgow, at the end of March.

You’ll hear from policymakers, local authorities and technical experts and vehicle suppliers as the event guides you through the preparation plans for these important new rules. n If you’d like to get involved as a sponsor or exhibitor at the event, contact tim.george@ roadtransport.com.

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Cameras could be alternative to big windows

Final call for say on Direct Vision

By Hayley Pink

TfL has launched the final consultation on its Direct Vision Standard (DVS) and associated Safe System permits.

The scheme, announced by London mayor Sadiq Khan in September 2016, will rate HGVs over 12 tonnes from zero to five stars according to the level of direct vision a driver has from the cab. It has been developed over the past two years using feedback from industry, truck manufacturers and academic research.

Star ratings for Euro-6 HGVs are available directly from manufacturers, with a sample of Euro-5 and Euro-4 trucks also now rated in the same way. From 26 October 2020, HGVs with a zero star rating will be banned from entering London unless they

have obtained a Safe System permit. The Safe System allows operators of zero-rated lorries to enter the capital by retrofitting approved safety equipment to boost their vision of vulnerable road users.

It has been designed to continually evolve to keep pace with emerging technology.

From 26 October 2024, rules will tighten to only allow threestar rated trucks and above to enter London without a Safe System permit.

Through this final consultation, industry is urged to have its say on the latest DVS proposals, with an emphasis on the permit process, including: applying for a permit, scheme requirements and the enforcement and appeals process. Subject to final consultation, permits will be

issued from October this year via TfL’s website. The permits will be free.

TfL added that the EC has followed London’s lead by including direct vision in the revised General Safety Regulation, which it said is a major step towards safer HGVs across Europe.

Christina Calderato, head of delivery planning at TfL, said: “London is leading the way with truck safety and we invite views on our final proposals. Our Direct Vision Standard will improve the safety of HGVs in London. We

hope the EC’s backing will help us make HGVs safer across the continent.”

Industry reaction

Natalie Chapman, FTA head of urban policy, said: “The FTA has been working with TfL throughout the development of DVS and it is good to see that many of our concerns have been taken on board. However, the future of road safety will be delivered through technological development and vehicle design standards, which the FTA believes will be best set at an international level.”

Mineral Produc ts Association (MPA) chief executive Nigel Jackson said: “We believe action taken by our members and colleagues in the construction industry to improve HGV safety has, and is, helping to protect vulnerable road users. TfL’s planned DVS expands this voluntary action into a scheme, which will improve the safety of all HGVs operating in London, and we will be contributing constructively to the consultation process to help support the successful implementation of the standard in 2020.”

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MotorTransport 9 10/01/2019 10:48:35

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Brexit is training for a new landscape

I David Crawford Director System Group

n wake of Britain’s imminent EU departure there will be new opportunity to develop more homegrown driving talent.

An estimated 3 million of the commercial vehicle driving jobs in the UK are tied to trading with the EU. So, clearly in the face of a changing legislative and employment landscape, the transport sector has to deal with some really important issues – and sooner rather than later.

Significant changes in the industry are likely to manifest themselves in the shape of recruitment shortages. Following Brexit, the end of free movement of labour between the UK and EU will be a big concern for the industry. We have a chronic shortage of skilled drivers in this country and it’s only going to get worse unless more is done to attract young people to driving careers. It is a challenge but not necessarily an impossible obstacle to overcome.

Changes to the law from March 2019 provide a

possible platform to adapt or even dispense with some aspects of transport and employment law. It also offers an opportunity to modernise through proposing better terms to attract more recruits and boost training opportunities to build a new force of highly trained and qualified homegrown drivers.

Trailblazing apprenticeships, which training providers such as System Group are looking at delivering, are welcome as a blueprint to move forward. These schemes promise to be big drivers of employment post-March 2019 as they offer apprentices the chance to earn while they learn to be commercial vehicle drivers.

Standing on the threshold of Brexit, it seems appropriate for those involved in securing future skills need to prepare for change and be adaptable in the face of an uncertain next few years. After all, change can sometimes be a potent force for good, working in the sector’s favour.

We need more than robots to sort this mess out

W Steve Hobson Editor Motor Transport

elcome to 2019 and the return of wall to wall Brexit coverage. By tomorrow (15 January) we should know the outcome of the MPs’ “meaningful” vote on the PM’s withdrawal agreement and the shambles that is the government’s process for leaving the EU will stagger on to the next stage.

Last week we saw this shambles in action, as 89 trucks practised driving from Manston Airport to Dover in case there are any hold-ups at Dover if we leave the EU without a deal on 29 March. The RHA rightly branded this exercise a “farce”, bearing in mind up to 10,000 lorries pass through the Port of Dover every day. Even if just a fraction of these are delayed for a few minutes for checks on Customs paperwork – never mind physical inspections of their loads – the result will be chaos for Kent.

Meanwhile, hapless transport secretary Chris Grayling tells the logistics industry it has been wrong to rely on cheap foreign labour to drive its trucks and run its warehouses and it should be investing more in robots to replace them after Brexit. Automation may well have its place but we are not going to see driverless trucks on UK roads anytime soon and replacing humans with robots

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in warehouses is neither cheap nor quick. John Lewis has spent £250m on its highly automated e-fulfilment warehouses at Magna Park, but how many 3PLs have this kind of cash? And where are the long-term dedicated contracts needed to ensure a return on investment?

Just wishing that UK workers will form orderly queues to take the jobs previously done by EU migrants won’t make it true. Wages for drivers and warehouse staff will have to rise significantly to make these jobs attractive to native workers, and that means higher rates for transport and logistics services. Again do not expect a queue of customers eager to sign up to paying more as we head into a Brexit-induced economic slowdown.

However you voted in June 2016, how the UK has come to this position just 10 weeks before its biggest upheaval for more than 40 years is totally unbelievable. The Northern Ireland conundrum was never going to make Brexit easy but the whole thing has been nothing short of a disaster.

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

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Earned Recognition

Setting an example

Freightlink Europe is piloting the DVSA’s Earned Recognition scheme for O-licence compliance. Steve Hobson reports

F

reightlink Europe, the Bradfordbased haulier run by husband and wife team Kevin and Lesley O’Brien, is one of the first participants in the pilot of the DVSA’s Earned Recognition scheme, which collects regular data from operators to show they are compliant with O-licence standards. This self-certification process is intended to shift scarce enforcement resources from the compliant to focus on seriously non-compliant operators.

The other big benefit is that Earned Recognition operators are much less likely to be pulled over for a random roadside check than those with a green operator compliance risk score (OCRS), though a vehicle with a visible serious defect will get stopped whether or not the operator has Earned Recognition.

The pilot scheme was launched in January 2018 with 26 operators – 18 in the freight sector – with the aim of expanding Earned Recognition to cover up to 10% of the UK HGV fleet of 340,000 trucks. Operators within the scheme must submit two emails every four weeks, reporting on their drivers’ hours and maintenance compliance status, something that has put off many operators reluctant to voluntarily reveal compliance issues to the regulator.

What’s the appeal?

How have Lesley O’Brien, partner at Freightlink and a board member of the RHA, and her transport manager Tom Peterson found Earned Recognition, and what was the appeal of joining the pilot?

“At first there was no appeal,” O’Brien admits.

“My initial reaction was it was just another hurdle operators have to jump over so I was very much against it. Then I thought that if we are really focused on compliance we have to lead by example and set the standard. It was also attractive when they said that operators taking part in the pilot would be helped.

“I am really keen on getting rid of the cowboys in our industry and if Earned Recognition is going to give DVSA more time to focus on them I am all for that.”

Freightlink Europe operates 25 vehicles based at two operating centres and was already green on all its OCRS based on a handful of encounters with DVSA. But achieving Earned Recognition means putting in place approved data-gathering systems to report regularly whether or not an operator is hitting five key performance indicators (KPIs) for vehicle main12 MotorTransport MTR_140119_012-013.indd 12

tenance and nine for driving activities (although two – repeat offenders and unaccounted mileage – are not being used in the pilot). Operators have a 2% tolerance on most KPIs before the DVSA is alerted that something has gone amiss.

“On the maintenance side we are delighted that we have been able to maintain 100% compliance because we have real control over that,” says O’Brien. “On the drivers’ infringements side it is more difficult. When we first sent the data to the DVSA our infringements were around 11% and they asked if we could get it down to 3%.

“We had lots of conversations with our drivers. Driver support and collaboration is essential. We explained that their information would be going to the DVSA. They have really pulled their socks up, which proves that it is possible,” says O’Brien.

Peterson says most infringements have been through delays due to congestion or accidents out on the road and drivers being unable to find safe parking and, on occasion, even being turned away from motorway services.

DVSA alert

Freightlink Europe has twice breached the threshold for its drivers’ hours KPI and triggered an alert to DVSA. “When we analysed these it was mainly due to drivers being unable to find parking,” says O’Brien. “This might be a good thing because it is highlighting a problem across the industry.

“Analysis has also highlighted the vast difference between our own and agency drivers.

Why should an agency driver care about compliance if they are only doing a day or two with us? We don’t want to use agency drivers, but often we don’t have any choice if we want to ensure customer service. Now is the worst time ever – we have three drivers off ill and it is the holiday period so 30% of our shifts are covered by agency. That is the reality and we hope that DVSA will understand and work with us on this. Of course, raising the standards of agency drivers is a whole other story!”

Peterson says many infringements arise simply because drivers forget to switch the tacho from driving to break mode. “If the driver points this out, Tom can go into the system and manually change the records,” says O’Brien.

“But then the system triggers that we have changed the record. We only do this if the driver tells us on the day and makes a printout, not after we have done the infringement report.”

Before being eligible for Earned Recognition, Freightlink Europe’s TMS had to be audited by an approved independent assessor to make sure systems were in place and operator licence undertakings were being adhered to. That process, too, can be arduous.

“We had three people here for a full day pulling everything apart,” says O’Brien. “They were looking at how we report missing mileage, the drivers’ daily walk-around checks and vehicle inspection reports going back 15 months – everything. One thing they found was that we weren’t doing roller brake tests on our trailers four times a year. That is another issue a lot of people brought up at a recent meeting held by DVSA for Earned Recognition operators.” As a result, Freightlink Europe is now sending its trailers away for quarterly brake testing as recommended by the DVSA.

Fortunate to have resources

O’Brien says Freightlink Europe is fortunate in that it has the resources to devote to dotting every i and crossing every t on compliance, but worries that for smaller operators the cost of all the admin will be a burden.

“Most transport companies have fewer than 10 vehicles, with one guy running around trying to do everything,” she says. “That is one obstacle. Earned Recognition is great but we have to get the customers wanting it. Companies are insisting on FORS, believing it to be the mark of a compliant operator, but all it proves is that you have procedures in place, not that you are following them or adhering to operator’s licence undertakings – a legal requirement.

“With Earned Recognition you have to show you have continuous, effective management, so it’s far more in-depth. We have to get our customers saying ‘we want Earned Recognition’.

We have to shout about the benefits. Regrettably, unlike FORS, DVSA is not allowing us to put the kitemark on our trucks.”

The initial audit costs around £1,000 and is repeated every two years. FleetCheck costs £100 a month, a not insignificant investment that does not include the time spent by O’Brien and Peterson. “We have to balance that with ‘is it bringing us any more business and is it making us more compliant and safer on the roads?’,” says O’Brien. “Until DVSA gets the message 14.1.19 09/01/2019 10:37:50

motortransport.co.uk

want to do business with have no knowledge or understanding of Earned Recognition. It means nothing to them so there is no commercial benefit to having it. If it was imposed on all hauliers as part of having an operator’s licence there might be some validity in it. We want to be 100% compliant but there are lots of operators out there who are not bothered.

“Why can’t everyone download their drivers’ cards to a national database for checking? Why can’t everyone submit maintenance reports?

Don’t call it Earned Recognition – it is just the standard. That would kick out the non-compliant and then we could earn more, pay our drivers more and address the driver shortage.”

Committed to the scheme

out to more transport buyers I don’t think anyone will use us just because we have Earned Recognition. If we are the same on price as another haulier then they might go with us but many businesses are not interested in our compliance, they just want the lowest price.”

In theory, of course, having a valid O-licence should be enough to prove an operator is compliant with the minimum standards required to run commercial vehicles. However, DVSA and traffic commissioners rely on operators to effec-

tively self-regulate because the resources are not there to proactively monitor all 85,000 commercial vehicle O-licence holders.

Not compliant

“I can take you to half-a-dozen operators round here who have O-licences but are not compliant,” says O’Brien. “Just having an O-licence clearly isn’t enough otherwise we wouldn’t have all the rogues out there.”

Partner Kevin O’Brien adds: “The people we

“People ask why we are in Earned Recognition or members of the RHA and I say ‘don’t complain about a situation, if you are not taking any action to make a difference’. It is a bit like paying membership for a gym, not going and then complaining that you are not getting fit!” she says. “We ve committed to this. I will not hesitate to pick up the phone and talk to the DVSA. It’s about creating that relationship. The recent meeting at the DVSA in Bedford with all the Earned Recognition operators was a real twoway conversation. There was a lot of discussion about vehicle maintenance and DVSA listened.

“The people at DVSA on the Earned Recognition team realise that we have to collaborate and work together. Whether that message is getting down to the guys on the roadside stopping vehicles I don’t know, but we have to start somewhere.” ■

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MotorTransport 13 09/01/2019 12:20 10/01/2019 10:27:54

Insurance

Risky business

C

hanges last year to the Ogden discount tables, which determine the cost of personal injury claims, rocked the fleet insurance industry and put the emphasis more firmly than ever on fleet risk reduction.

There is some evidence that fleet insurers, which have recently made little to no profit, are now coming out of the shock and awe phase that saw them retreat from the market entirely or become more selective in their choice of risks.

But that doesn’t mean fleets are off the hook, either in terms of price increases or the high level of risk management they will have to deliver.

The Towergate Insurance team says that fleet insurance has gone through a typical cycle since the Ogden rate change. Premiums were found to be insufficient to cover risk, the market contracted, prices rose – and now that higher pricing is luring more insurers back to the sector, bringing some return to competitiveness.

Towergate Insurance Motor Division MD Alistair Warden says that fleets are now seeing an easing of the market with better pricing and more players and he is confident that improvement will continue through 2019.

However, it would seem “competitive” is unlikely to mean ever cheaper.

Roger Gaunt, MD of insurance broker Gauntlet, says the average price increase on renewal is 10% to 20%, and he expects no less next year. “The main issue is actually uncertainty about Brexit,” he says. “The insurance market is underpinned by foreign capital investment and that’s likely to drop if our markets are uncertain, reducing capacity in the insurance sector.”

The Civil Liability Bill, which should become law next year, is intended to help level spiralling insurance costs by addressing high-volume whiplash claim costs with a tariff; and catastrophic claim costs by resetting the Ogden discount mechanism to between 0% and 1%.

However, there are also two key trends that are propelling the cost of insurance claims

SAFETY VS COSTS: Increasingly sophisticated technology can improve safety, but also leads to increased repair costs

14 MotorTransport MTR_140119_014-15.indd 14

After the disaster of the Ogden discount rate changes in 2017, is the fleet insurance market recovering? Louise Cole reports upwards, even as their frequency falls. The first is advances in medical science that can keep people alive and in need of ongoing care, where previously a higher proportion of road casualties would have died. While fewer fatalities is an excellent outcome in humanitarian and social terms, it leaves a higher bill for insurers.

The second is, ironically, the many safety enhancements in vehicles, which mean they are increasingly costly to repair following even minor accidents.

Umpteen sensors

That rear shunt once damaged a piece of painted metal. Today it smashes umpteen sensors – and the specialisation of technology has made it increasingly hard for fleets to rely on local independent mechanics as opposed to the manufacturer’s dealership, which has all the right diagnostic equipment.

Gauntlet is offering a two-year fixed premium, “backed by Aviva”, for “the right kind of risk” ie, well-managed, safe fleets of between three and 12 vehicles. The fleets need to take Smart Witness cameras, for which they only pay the reclaimable VAT, or they can use an equivalent system of their own. Gauntlet says the insurer can hold the price because of the savings the cameras will give on rapid first notification of loss, and control of subsequent costs; the rapid dismissal of fraudulent claims; and hopefully more insightful management control of drivers.

Insurers are, however, being much more selective about the risks they are choosing to cover. “Insurers are becoming smarter and more inquisitive,” says Warden. “Installing telematics or camera systems is not enough – they now want to know how you will use that

data to reduce risk. Insurers are saying: ‘Don’t tell us, show us’.”

Chris North, technical manager at Towergate, agrees. “Telematics is by no means a silver bullet. Equally, camera systems can help but insurers will ask: ‘Is this camera helping the driver to be safer or simply reacting?’ In-cab cameras that produce coaching insights can be excellent systems if management acts upon them.”

However, Paul Johnson, MD of Transervice Express Transport, says insurers still aren’t discerning enough. “We specialise in local pallet deliveries, and we have our own training academy so drivers are constantly coached and their skills refreshed. Yet when we tried to volunteer more information through our broker, the insurer said it wouldn’t make much difference – even though it must make us a lower risk. We manage our drivers well, yet pay much the same premium as an operation in higherrisk general haulage.”

Claims history

Insurance still relies for the most part on claims history to calculate premiums, although some now feel they have sufficient data from camera systems to risk upfront premiums. At its heart it is a simple formula – insurers work out what the fleet’s liabilities will likely be over the year, minus excesses, add in their (diminishing) margin and taxes, and add it up.

A decent claims ratio is 25% or less – that’s one in four vehicles making a claim during the year. If the claims ratio sinks lower, then the fleet can start to really exercise some control over the premium rises they will be facing otherwise – or alternatively choose to raise their self-insurance level with higher excesses.

Paul Trafford, associate director at broker Griffiths & Armour, says the break-even point on claims against a £100,000 premium is £55,000. Anything above a 30% at-fault claims ratio is problematic. The good news in this case is any serious investment in fleet safety will likely pay back very quickly, through savings on uninsured loss, repairs, downtime and, ultimately, premiums.

Much higher than 30% and insurers term the fleet a ‘distressed risk’. Some hauliers will term distressed risks uninsurable, although Trafford says in reality no fleet is uninsurable – but they may end up classing themselves as such because they cannot afford to pay the premium.

Young drivers

Some hauliers tell MT it has never been harder to insure young drivers, and putting a driver under 25 on their policy mid-term has proved virtually impossible.

Transervice has worked with its broker for four years trying to persuade insurers to cover 14.1.19 09/01/2019 10:34:07

motortransport.co.uk

COST CONTROLS Top tips for controlling insurance costs ■ Choose a good broker or be prepared to do a lot of meetings and homework.

■ List all your safety protocols and policies in detail – even which DCPC courses you choose – and insist the insurer takes notice.

■ List all the ‘outliers’ you intend to use during the year – young drivers, agency drivers etc – and how you will mitigate their risk.

■ Make sure you enforce policies and operational protocols.

■ Start your renewals conversations months in advance.

■ For many fleets it’s probably cheaper to hire a safety champion than to fail to manage risk.

their apprentices once they qualify as drivers.

“We could insure them as trainees, but as soon as they passed their tests, insurers weren’t interested, as they had no experience – which they couldn’t get without insurance,” says Johnson.

Warden suggests demonstrating a management plan and then introducing young drivers on a scaled basis to demonstrate that their risk remains well controlled. After extensive efforts, Johnson has found a new insurer that will accept this. Once qualified, the drivers start on 3.5-tonne vehicles, with a £750 excess and, after six claim-free months, they can progress to Class 2 and finally to Class 1.

Brokers say operators should check policy restrictions at the outset. Many insurers have standard terms that preclude anyone under 25; others are not deterred by young drivers, provided the fleet demonstrates careful management and safety training. In theory, shadowing, telematics, regular training all help, although Johnson says some fleet insurers are too disengaged to want to listen.

If the fleet is likely to recruit or graduate young drivers during the year, fleets should make sure the broker and insurer know this upfront. Insurers profile their own risks very specifically – those with no appetite for the higher-risk profile of male drivers under 25, are unlikely to change their policy mid-term.

Fleets can also invest in flexibility, says Gaunt.

“Hauliers negotiate hard at renewal, but it’s worth considering loyalty to an insurer because that’s likely to pay off later when you want particular consideration.”

Using a broker

The best brokers will work with a fleet as their advocate and consultant. They will help fleets determine their risks, advise on how to reduce risk and demonstrate this reduction and present a case to insurers as to how the fleet is managed. It is very important therefore to be both transparent and receptive in the fleet managerbroker relationship.

There are typically two ways to pay for a broker. Some will take a commission of 10% to 15% on the insurance premium, but others, such as Griffiths & Armour, will work for large fleets for a flat fee. It’s worth enquiring about payment structures because it can be counterintuitive to ask a broker to work to reduce a premium on which he is paid commission.

Trafford says his company’s fee structure “allows fleets to measure more clearly the value they receive from the broker”.

Brokers are experts in the market and tend to know different insurers’ attitudes and appetites for risk, so they can save fleets a lot of time and frustration by pairing them with the right underwriter for their needs. ■ 14.1.19 MTR_140119_014-015.indd 15

MotorTransport 15 10/01/2019 10:29:10

Interview: David Hunt

Destination unknown Uncertain times should favour rental companies such as Ryder, but as vice-president and MD David Hunt tells Steve Hobson, Brexit has put the brakes on its rental fleet renewal

H

owever hard or soft Brexit turns out to be come March, the uncertainty created by the government’s handling of the process is already damaging the UK truck market.

Commercial vehicle rental and contract hire firm Ryder manages almost 20,000 assets in the UK and in the first nine months of 2018 it bought more than 550 new rental vehicles.

“Are we buying any more rental trucks before Brexit?” asks David Hunt (pictured, right), vice-president and MD of Ryder Europe when MT went to see him in September. “No. So with six month lead times we will add no more rental trucks to the UK fleet until October 2019 at the earliest.

“The last 400 Euro-5s will wash through in the normal cycle, but we would be mad to buy any more trucks before Brexit.”

Although the UK is not (yet) officially in recession, the temptation to wait and see what Brexit will bring later this year – plus added uncertainty over the effect of clean air zones – is making many truck buyers postpone orders for the foreseeable future.

COST AND AGE OF TRUCKS BOTH ON THE INCREASE The rising cost of Euro-6 trucks has meant the average age of Ryder’s rental fleet has also increased to compensate.

“On the rental fleet we’ve allowed the rigid equipment to age, particularly the 7.5-tonners,” says David Hunt. “It costs £10,000 to £12,000 more for a 7.5-tonner today than it did five or six years ago. You can’t rent a tractor for more than £400, you can’t do an 18-tonner for more than £350 and nobody wants to rent a 7.5-tonner for more than £250.

Those numbers haven’t changed for the 25 years I’ve been in Ryder, so we explicitly didn’t continue to reinvest heavily in 7.5-tonners because we can’t get anybody to pay for one.

“It’s ridiculous, so we’ve let them age out, but we face the same issues as our customers in replenishing that fleet and we’ve got to make some calls.”

When it comes to contract hire, Ryder has also allowed customers to run their trucks on at the end of their contracts. “A lot of people think that’s good for leasing companies, and in markets with high interest rates and flat or improving residual values, that is absolutely the case,” says Hunt. “That’s why the banks never ring you up to say ‘do you want to give your equipment back’ because when they’ve got a fat interest rate and peppercorn rent then it’s happy days until you ring up and cancel it. But in this environment, with very low interest rates, deteriorating residual values and complex equipment, then extending contracts isn’t so attractive for us. But if we go and see a customer, they think they deserve a 10% discount for extending it.”

One thing Ryder won’t do is run unprofitable contracts and then try to claw the money back with high termination charges. “Everybody thinks they’re going to get mugged at the end,” says Hunt. “People are so used to all these promises at the beginning when they sign a lease with these fly-by-night companies. When the banks step in they want to charge you for taking it back to a perfect condition. Suddenly the whole reason of why they outsourced it falls apart. We believe in the long haul and we put the customer first. We don’t just pull a truck because it happens to be worth a lot of money in the marketplace and say, ‘sorry, you have to get a new one’.

“We own our assets and don’t have somebody sitting behind us saying, ‘excuse me, that truck is actually mine’. We can do whatever we like with it. Over time we hope customers appreciate the flexibility we offer them. On our leases, we’re way over what we’d like to run the trucks for because everybody’s holding on to them due to all this uncertainty.”

16 MotorTransport MTR_140119_016-018.indd 16

“In a recession you know what you need to be doing,” says Hunt. “I’m not a natural ‘sit on your hands and wait’ type of person. But really all we can do is sit and wait.

“Right now we have no idea what the effect of Brexit will be. It might turn out to be a masterstroke in 20 years, but in the short term everybody is planning for a bad 2019. So we will have a bad 2019 because we won’t be able to adjust quickly enough.”

Uncertainty is usually good for rental and contract hire as fewer operators want to commit to purchases or long leases.

“The main thing next year for purchase of trucks is confidence,” argues Hunt. “On tractors, people will buy if they’re confident about their contracts and their volumes. On rigids, there’s a huge replacement bubble out there where people haven’t refreshed their rigid fleets.

“That’s for a number of reasons, but those 2014, 2013 and 2012 trucks are now getting to the point where they are just not economically viable to keep running.”

Placing orders

Ryder however cannot afford to wait too long before placing orders for new vehicles and ultimately Hunt has to decide what to buy when.

“We have to make the calls. We don’t use the asset as an end-user – we have to sell the asset.

14.1.19 09/01/2019 15:36:05

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“So this situation disproportionately affects us because we have to take positions and no position is a position in its own right. Being passive is a position.

“Logisticians are there to drive out waste from a supply chain. You either see that waste as stock holding, the number of people undertaking the task or the assets and working capital tied up in it,” says Hunt. “I said in 2008/09, logisticians make changes that you sometimes can only make when you’re in difficult times, and that will continue to happen.

“On the one hand, you’ve got higher or the same volumes and on the other you’ve got people coming up with smart ideas every year to reduce resources while maintaining or improving service.

“The name of the game is to maintain the same cost for an improved service or reduce cost and deliver a better service. My argument is that there will be a continued overall net reduction in the number of trucks as logisticians do their job, re-engineering their supply chains. That’s why it’s so complicated for us to sit here and say what’s happening. You’ve got that continued drive for cost reduction and then you’ve got big changes in regulation and consumer spending patterns affecting the market.”

Ryder’s customers are suffering from the 14.1.19 MTR_140119_016-018.indd 17

driver shortage, something that has got worse since the devaluation of the pound following the Brexit vote that led many eastern European drivers to return home.

Adding value

“Operators are working trucks harder,” says Hunt. “Everybody wants their driver in a truck, delivering and adding value for their company. They don’t want them doing any ancillary things like collecting vehicles from us.

“We have a service delivery model and relationships with customers. It’s not that customers have got more awkward, it’s the fact they haven’t got any drivers. It’s as simple as that. It’s a self-imposed increase in efficiency because they haven’t got any slack.”

One result could be that operators will replace the bread and butter 7.5-tonne delivery truck with two 3.5-tonne vans that don’t need HGV drivers, or one 12-tonner that can carry more freight per shift.

“If you ask me that in a year or two’s time, I will have a clearer picture,” says Hunt. “The 7.5-tonner is being affected because there are fewer drivers of our age who can theoretically just jump in one and drive.

“If you’re going through all the tachograph compliance, you want to be moving as much stuff as you can.

Then you’ve got the option of the Daily and other equipment.

Probably less than 50% of 7.5-tonners run full and if it’s half full you can put it in a large Sprinter van.

“There’s nothing in the 7.5-tonner’s favour at all, other than it being the only thing that can drive down certain roads. If the government said an electric X-tonner can go down these roads you’d see 7.5-tonne demand fall off a cliff.

“The 7.5-tonner was the workhorse of the UK, but it’s going to be like any other truck in two or three years’ time, where it’s just a specialist asset bought for a specialist requirement.

MotorTransport 17 09/01/2019 15:41:23

Interview: David Hunt The workhorse asset of the UK today is white van man.”

The proliferation of unregulated vans could lead to O-licensing for light commercials, but that is some way off.

“We’re looking at whether that will change and it’s five, maybe 10 years away,” Hunt predicts.

“Obviously, the regulators’ first priority was to sort out the trucks, and vans have just been the Wild West. Anybody can buy a van in the UK, because there are no controls. Just get as many as you like and do what you like.

“I think it will continue for the foreseeable future because politicians wouldn’t want to upset white van man. But at some point society is going to be just as frustrated with the number of vans that are parked everywhere. So yes, it will change, but it’s a while away.”

White elephant?

The impending implementation of clean air zones around the UK and the Ultra Low Emissions Zone in London has many urban HGV operators questioning whether a diesel vehicle bought today will prove to be a white elephant.

“Euro-6 is good enough for the foreseeable future for the diesel going into the city,” says Hunt. “It’s dramatically better there than anything else. Practically, if everybody was running Euro-6 trucks today the reduction in NO2 and particulates emissions from diesel engines would be astronomical. As to whether people feel that’s good enough, nobody honestly knows.

“In reality, there is no option. There is no silver bullet. So for at least for one more buying cycle, there is no choice. In the end it just comes down to ‘I need to buy a truck today. My Euro-5 is eight years old. What options are there?’

There aren’t any, you need to buy a diesel truck.”

Hunt is not an enthusiast of gas trucks which – while marginally better on CO2 in long-haul

motortransport.co.uk

applications – are usually no better on local pollutants than Euro-6 diesel.

“If you’re talking particulates and NO2 reduction you haven’t got a better option than getting yourself a diesel truck today,” he argues. “They’re all coming up for renewal, and they need to be bought. In six years’ time, is there another cycle?

Maybe, but there is no choice today.”

He does however believe that there might be a role for long-haul trucks running on biofuels as a way of reducing CO2 emissions. “At the heavy end, when you’re outside the cities where you’re not having to think about particulates and NO2 as your number one priority, I think there’s legs in alternative fuels like biogas,” Hunt says. “The OEMs are more open to it because it maintains their control of the drive train. It still needs maintenance and it still needs parts. They’ll be wanting to go down that less disruptive route.”

And while electric may be a viable low carbon alternative in the future, Hunt says it is too soon for most operators. “There are only six eCanters in the whole of the UK at the moment,” he points out. “I’m not saying that it isn’t coming, but I’m saying realistically, how many electric vehicles is anybody going to buy in this refresh period?

“I’m not saying you shouldn’t be trialling these things. If you need to buy 20 trucks, you may well buy a couple of electric trucks to have a play, if you can afford it.”

Urban settings

Leaving aside the sci-fi Tesla Semi, the US is ahead of Europe on the practical application of electric vehicles in urban settings. But Hunt has no plans to buy a gas or electric vehicle this year for his UK fleet.

“We’ve got 200 or 300 Chinese Chanje electric vehicles running in New York and San Francisco on our rental fleet, so we’re taking all the learnings from them,” says Hunt. “But

DON’T READ THIS IF YOU RUN A LOT OF EURO-5 TRACTORS One truck dealer MT spoke to recently said UK operators had been “conned” into buying Euro-5 in 2014 after scare stories that Euro-6 would be more expensive, heavier and less fuel efficient. The result was a bubble of Euro-5 sales four years ago that has now burst as more cities demand Euro-6 for free entry into their clean air zones.

“There is a huge over-supply of tractors in the market,” says David Hunt. “That’s not Brexit, that’s not the economy, that’s just too many Euro-5s. We were nearly at the point where the CAP average price for a five-year-old Sprinter was better than a DAF CF. “We didn’t derogate any Euro-5 tractors and didn’t over-extend ourselves. We still have a tractor fleet and carry about 800 or 900 tractors on rental, which we can take up to 1,200 for the Christmas peak. We’re still in the tractor market, but when you see some of these companies that came out of nowhere with 2,000-tractor fleets, taking a punt on spot procurement and residual values, then a lot of them have had their fingers burnt.”

In the last recession, many operators ran Euro-5 trucks for up to seven years and over one million miles with no major problems, and OEMs often say a truck will do 1.2 million miles with no major component failures, but extended warranties get expensive at these mileages.

“In terms of the mileages, there is a very interesting dilemma. Everybody wants to keep on selling metal and the people who can afford to buy new want to run higher mileage over three years until the warranties run out,” Hunt says. “The trucks then get sold onto the next set of people who want to be out of them within 800,000 miles and nobody really wants them after 900,000 miles. So the people at the front want to run more, the people in the middle don’t want to run any less, and nobody really wants them at the end. The market doesn’t work at the moment.

“Nobody will give you a guarantee that the engine will run for 1.2 million miles. The secondhand market for tractors is going to keep on going down. You can make money if you jump out at three years but really you need to run the truck longer in the UK to make the maths work.

“The rigid market has deteriorated but residual values are now stable at that lower value. You could say it was a hot market a while ago but now it’s a normal market. If you’ve got a decent mileage rigid you can get decent money for it. People shouldn’t get carried away that these clean air zones are going to be the end of the world. There is still a lot of metal out there, but has everything fallen off a cliff on rigids? No it hasn’t.”

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MAINTENANCE GOES MOBILE Since their launch in 2014, Euro-6 trucks have steadily improved to be more reliable as well as being more fuel efficient, resulting in reduced repair and maintenance requirements.

“These latest Euro-6 trucks are running better than any trucks we’ve had before,” David Hunt says. “What you’re buying now is a pretty robust truck. Not only have you got to get all the Euro-5s out, you’ve got to get the first-generation Euro-6s out too, but the overall level of maintenance required is getting lower and lower.

“There is going to be a lot of pressure on inhouse workshops as there will be less to do. We’ve put a massive amount of effort into our mobile maintenance capability through our Bullwell business so now we can do the work in our workshop, in a customer’s workshop or on a mobile vehicle, and we’re ambivalent as to which one it is.”

both those cities have given large grants that make it economically viable to buy an electric vehicle. There’s no economic justification for an electric vehicle in the UK.” So if Hunt is happy with his Euro-6 diesel trucks, what will Ryder’s van fleet look like in five years?

“We are in a nice position overall on the heavy end, through a lot of hard work by the staff and management and support from the US,” he says. “When it comes to 3.5-tonne electric vehicles, how do you enter that space?

Commercially viable

“Everybody is doing trials but is it commercially viable? The answer at the moment is no, but everything else about it fits with Ryder’s model.

These assets are going to be expensive and they’re going to be running for a long period of time. The asset management of them is going to be important. The maintenance is going to be lower but more complex.

“All that makes you say, at some point, Ryder is going to have to get into electric, and it’s going to be that middle ground between the 3.5-tonner and 7.5-tonner. But we’re going to have to think all that through very carefully before we’d be willing to put big cheques in there.”

Ryder is already working with some of its key customers on electric vehicle trials but the big unknown for the ultimate owners of the vehicle is what if anything will be the residual value of the expensive battery packs.

“If one of our key customers came to us and said, ‘we’ve decided to trial 50 or 100 electric vehicles in London, and we want to partner with you on the infrastructure to achieve it’, then yes, we’d be willing to do that,” says Hunt.

“Then it gets to the economics, and who wants to sit there with an eight-year-old battery when nobody knows what you can do with it.

“Ryder doesn’t fear those conversations as much as some, because we’re having the same conversations in the US. The reality is, people aren’t ready to have those conversations yet.

Ryder has been brave over the past four or five years in taking a market position and saying, ‘we want to be in this. What’s the overall economic risk and can we stomach it?’ If we can, then let’s have a good look and give it a go. ■ 14.1.19 09/01/2019 15:44:57

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