Sharp ■ Informed ■ Challenging
16.12.19
NEWS INSIDE On the up
Clipper Logistics reveals 12% revenue increase
JOIN THE PRIDE p3
Feeling the stress
Research shows high stress levels in fleet management p4
Switch to zero emissions
Nikola accuses truck giants of stalling over emissions p6
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BRANCH LINE: Pall-Ex is helping a local Christmas tree wholesaler reduce the miles from forest to front door by transporting products nationwide via its pallet network. The logistics giant has been enlisted by Hinckley-based Cadeby Tree Trust to deliver 180,000 trees, which must travel from farm to customer within five days and be kept cool to maintain freshness and minimise needle loss. Cadeby Tree Trust’s tree production operates over 600 acres, growing Nordmann fir, Norway spruce, Fraser fir and blue spruce, with the varying size and shape of the trees providing additional challenges. Christian Bonshor, general manager at Cadeby Tree Trust, said: “Speed is a major consideration for us; trees must be left to rest for 24 hours after cutting, before they are netted, palletised and loaded. Pall-Ex enables us to scale up as the season gets under way, make smaller drops to multiple destinations and ensures vehicles are available when we need them.”
Haulier looks forward to a brighter future with a £55m cash injection
Eddie Stobart Logistics rescued in £55m deal By Carol Millett
As William Stobart (pictured) returns to Eddie Stobart Logistics (ESL) this week as executive chairman, Unite has warned against any move to cut jobs or put undue pressure on its workers in a drive for greater profits. The move comes as the deal with DBAY Advisors was formally completed after being voted in by 81% of shareholders on 6 December. It sees DBAY inject £55m of capital into the company in return for 51% of the shares. The £55m also comes with an 18% repayment interest rate. The deal sees Philip Swatman step down as chairman, while CEO Sébastien Desreumaux and CFO Anoop Kang will continue at the helm of the company, retaining their current roles. William Stobart returns to the company in his previous role as executive chairman, which he held until 2017. DBAY was a major shareholder in ESL before it was floated on the Stock Exchange in 2017. It made £150m from a flotation that valued the haulage company at £573m. ESL still faces an uphill battle to secure its future. It recorded a loss of at least £12m in the first half of the financial year, following an accounting scandal which saw its shares suspended. Unite national officer for road transport Adrian Jones said: “Unite is already in the process of seeking an urgent meeting with the new owners to discover what plans DBAY has for the short-, mediumand long-term future of the
company. The recent financial problems experienced by ESL has led to our members at the company becoming very anxious about their employment. A situation made worse by the lack of information provided. “Unite hopes that early discussions will pave the way for an improved industrial relations climate with ESL. “However, the new owners need to be fully aware that Unite will not allow profits to be ramped up at the expense of our members’ jobs, pay or conditions.” A DBAY spokesman told MT that the company’s operational performance has not been affected by the uncertainty leading up to the deal with DBAY. “The company has delivered Black Friday successfully during this period of transition and Tesco
has also renewed its contract with ESL which it would not have done had there been any concerns that the company could not meet its operational challenges.”
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Business Barometer p10 Marketplace p14-17 Cost tables p26 Zambia p33 Profile: Gregory p38 MT Award winners p44-51
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12:15
News
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Subsidiaries hold back Pall-Ex Mounting losses of £1.7m accrued by Pall-Ex’s three haulage subsidiaries – Shears Brothers (Transport), Intercounty Distribution and Pall-Ex London – “constrained” HLD Holding’s performance last year, according to its latest annual results. Reporting its annual results to 31 July 2018, the group nevertheless posted a pre-tax profit of £411,000, up from a loss of £1.1m in 2017. It said Pall-Ex UK was the “main driver” for the improved performance, pointing out that the pallet network had separately posted a profit of £2.5m for the period, up from £1.9m the previous year. HLD Holdings attributed the profit rise to a 10% increase in pallet volume and an 8% increase in turnover to £71m (2017: £65.9m). HLD Holdings’ turnover rose by 8% to £79.7m (2017: £73.6m) in the period, while administrative expenses were cut from £11.8m to £11m, “turning an operating loss of £1.1m last year into an operating profit of £400,000”.
A 12% revenue increase makes an attractive takeover proposition
New contracts increase profit for delivery firm By Carol Millett
Clipper Logistics has announced a 12% revenue increase to £254.6m for the six months to 31 October, up from £227.9m compared with the same period last year. Pre-tax profit rose 9.5% to £10.1m in the period, up from £9.3m.
Executive chairman Steve Parkin said performance was boosted by new operations with major customers including Hope & Ivy, Simba Sleep, SLG, Shop Direct and M&S, which accounted for half the revenue growth in the period. Another quarter was due
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to growth in mainland Europe. However, the company offered no further information on reports that Parkin, who founded Clipper Logistics, was preparing a £300m takeover bid via Sun European Partners. He has until 18 December to make an offer. Clipper Logistics also saw growth in its click and collect Clicklink joint venture with John Lewis Partnership which won deals with Cotswold Traders and Cotton Traders and commenced a new operation with John Lewis and Boden. The logistics giant also continued its push into automation with the launch of an automation programme with Superdry in the period and trials of robotic technology with “a number of other UK customers”, the company revealed.
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16.12.19
MotorTransport 3
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New research finds higher stress levels in the fleet management sector
The stress factor By Hayley Pink
Three-quarters of operators (74.5%) say managing a commercial fleet has become more stressful in the past few years, according to new research conducted by Fraikin, Motor Transport and Commercial Motor. Managing drivers, handling compliance and pressure to reduce costs were all cited as key stress factors. More than half (53%) also revealed that fleet assets are being used more intensively today than they were three years ago, with a significant 70.4% finding it a struggle to fill driver vacancies.
The ‘Fraikin Fleet Management Operator Survey 2019’ drills into the key issues affecting fleets today, including the complexities of adopting new technology, driver recruitment, DVSA Earned Recognition and reducing vehicle emissions. Companies of all sizes have been represented in the research, with more than half of respondents (58%) being board directors, owners or senior managers at UK road transport operators and a further 24% in middle management roles. “Fraikin’s aim with this report was to develop a deeper understanding of how fleets are reacting to some of the key issues in our
sector,” said James Walker, commercial director of Fraikin. This report was produced in collaboration with our sister title Commercial Motor. It is free to download for all registered users of commercialmotor.com – and registration is free too.
HIGH DEAL: Gregory Distribution has purchased Glasgow and Inverness transport firm Highland Haulage, extending its reach in the UK. The deal went through on 1 December and was achieved through Gregory’s Scottish subsidiary ARR Craib, which it bought last year. Gregory MD Angela Butler said: “Highland Haulage has been a stalwart of the Scottish transport industry for more than 25 years and the opportunity to extend Craib’s coverage throughout Scotland was compelling. Highland Haulage’s reputation for offering a high-quality service covering the far reaches of the UK complements Craib and Gregory and we are delighted with this new addition.”
4 MotorTransport
Kuehne+Nagel in HMRC tax probe A network fee charge that has saved Kuehne + Nagel (K+N) more than £17m in corporation tax over six years is under investigation by HMRC, according to the company’s latest annual results. The investigation, revealed in K+N’s annual accounts for the year to 31 December 2018, was triggered following an earlier inquiry by HMRC in 2015 into the company’s payment of a trademark fee. This latest inquiry centres around a network fee charge that K+N pays to Kuehne + Nagel Management. The company said: “The network fees have been booked in the appropriate accounting years and treated as being allowable deductions for corporation tax. This has reduced the cumulative corporation tax charge over these six years (2012-2018) by £17,497,000. “HMRC is undertaking an enquiry into the network charge concept covering the subsequent years, and as yet has not declared its view of the company’s treatment, or issued tax assessments to date.” The company’s results also reveal a 7% increase to £1.58bn (2017: £1.47bn) and a 21.6% leap in pre-tax profit to £48.8m (2017: £40.1m), boosted by the company acquiring the remaining 50% share of joint venture business K+N Drinkflow from Heineken UK in February 2018.
16.12.19
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News
Nikola boss accuses truck giants of stalling over the swit
Changing the w with electric t By Will Shiers and Tim Wallace
Trevor Milton, CEO of Nikola Motor Company, has accused OEM truck giants of putting the brakes on the switch to zero emissions but warned them that the days of diesel are “dying pretty quick”. Speaking to MT following the release of new data by the European Automobile Manufacturers’ Association (ACEA) showing that 98.3% of all heavy and medium trucks on Europe’s roads still run on diesel, he admitted he had become infuriated by the “arrogance” of the OEMs he had tried to partner with. “All they did was talk about how good they are, how big they are, how they are number one or
number two or whatever,” he said. “It made me cringe. I hate everything about it.” Milton went on to claim that manufacturers like Volvo and Daimler remained reluctant to consider alternative fuels. “They literally said ‘it is not possible to meet these emissions standards’ – and that is total bullshit. They just wanted to sit there and reap billions of dollars of rewards off their diesel programmes, and I’m tired of it. It’s over.” A pioneer in the development of heavy-duty electric vehicles, Nikola has recently signed a deal with IVECO, which Milton revealed was the only OEM
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r the switch to zero emissions
e world c trucks prepared to admit it was “struggling” with emissions targets. While agreeing that diesel trucks had “quite some time” left, he warned OEMs that it will “become so cost prohibitive to own them based upon emissions regulations”. “Nobody is putting R&D into diesel anymore,” he explained. “It is completely done. One of the suppliers just announced that it is getting out of diesel injectors. That’s a massive problem. There is no investment into diesel. It is all going into zero emission. “So, it’s just a matter of time until all the orders coming in are for zero emission. The problem is none of the OEMs can build enough to satisfy the market, so
for the next 10 years they [diesel trucks] will still exist, but their values will plunge and their costs will go up. They’re dying pretty quick.” Milton’s views have been backed up by the new ACEA research which advocates “the rapid roll-out of dedicated charging and refuelling infrastructure for trucks – which is completely absent today – and putting in place meaningful incentives to make these vehicles a commercially-viable and competitive choice for transport operators”. On 6 December in Brussels for an ACEA board meeting, industry chiefs stressed that the transition to zero emissions cannot happen without radical policy changes by the EU and the governments of all member states. “When we look at the total fleet of transport operators today, it is clear that the market will need to be completely turned around in an extremely short time frame,” stressed Gerrit Marx, chairman of ACEA’s commercial vehicle board and president of CNH Industrial Commercial Vehicles and Speciality. “If we are to transform this startling picture and convince hauliers
to make the switch to low- and zero-emission vehicles on a largescale, Europe urgently needs to introduce a strong package of consistent and predictable policy measures,” Marx urged EU policy and decision-makers. “Creating real market demand for low- and zero-emission vehicles should now be the priority. Binding sales quotas for manufacturers, on the other hand, would not do anything to encourage transport companies to purchase alternatively-powered trucks.” Meanwhile, Milton went on to
claim many OEMS have always had the technology to switch and said they wouldn’t be prepared to let companies like Nikola and Tesla “sit back and kick them”. “They will react, they’ll move fast,” he said, “but the best news is that Nikola will always be known as the company that changed the world of trucking. Nobody else will ever get that title.” Milton also confirmed that Nikola Tre – “the only zero-emission artic that can drive for more than 200 miles” – would be in production by 2021.
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16/10/2019 16:12
News
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Three vehicles taken from Hexagon Leasing
Stormking expands van fleet GRP building components supplier Stormking has taken three Mercedes-Benz vans from Hexagon Leasing after using the contract hire and leasing specialist to replace its HGV fleet over the last three years. The Tamworth-based supplier of products including fibreglass dormer windows, dormer canopies and door canopies has added a Sprinter and two Vito vans to its 16-strong fleet, which is used by its customer service engineers.
Stormking was founded in 1985 and employs over 180 staff. MD Kevin Bohea said: “Hexagon have been great to work with due to their impeccable professionalism. We decided to work with them in 2016 to upgrade our fleet of HGVs and have been using them ever since because of the choice of vehicles they offer and their cost effectiveness. We look forward to our continued relationship.” Hexagon Leasing has supplied 13 trucks to Stormking over the last 18 months, including MercedesBenz tractor units and Iveco rigid curtainsiders. Based in Ashbourne, Derbyshire, Hexagon is a leading provider of commercial vehicle solutions including contract hire, leasing, used vehicle sales and fleet management across the full range of vehicles from tractors to rigids and vans to trailers, including fridges.
December 17th, 1919
Motor Transport was launched in 1905 as Motor Traction. We look back at a story published 100 years ago this week
Mass Reproduction: A Visit to the Government Motor Repair Works at Slough
On Monday of last week we joined a party of technical journalists who, by permission of Lord Inverforth and the Ministry of Munitions, were given the opportunity of visiting the extensive motor repair works at Slough. The Unfit Park On reaching Slough we were taken to inspect the Unfit Park, where all the vehicles sent to Slough for repair are first parked together until their defects can be dealt with in the shops. It was explained to us that the Slough works were engaged entirely in the repair and reconstruction of motor vehicles employed recently for war purposes. The main objects of the repair operation were two-fold – to put the machines into running condition for further use by Government Departments and for re-sale. Although the various buildings and the installation of necessary machinery, etc., were not yet completed, about 3,400 hands were employed and were repairing about 240 lorries a week. 8 MotorTransport
Engagement is the key to improving training, says Skills for Logistics MD David Coombes
LGV apprenticeship needs feedback, not brickbats Reading the article in the latest MT about hauliers requesting a halt on Apprenticeship Levy payments has got me very concerned. While I am a route panel member for transport and logistics at the Institute for Apprenticeships, my opinions are very much my personal view and also that of the employers, training providers and learners that we engage with week in, week out. The first thing to say is that a moratorium on levy payments based just on the delay of the inclusion of the Category C+E licence in the LGV Apprenticeship is clearly excessive. If we then look at the extremely diligent process of amending or introducing a new apprenticeship standard, we can also understand the time constraints involved. Apprenticeship standards are developed by specialist employer groups (Trailblazers) and require, in effect, a five-stage process, which is then sanctioned by the institute each time. It goes: ■ agree the potential standard; ■ develop the proposal; ■ develop the standard; ■ develop the assessment plan; ■ agree the funding band. The amendment of the LGV standard to include the C+E licence demonstrates that the Institute has listened to the industry. However, the requirement for compelling evidence to be presented before any changes can be authorised means that this has not been a fast process. There is also the small matter of over
250,000 registered ridged vehicle operators to consider. Apprenticeships are about gaining knowledge, skills and behaviours. Gaining a licence to practice within the standard is not the default position. So while the inclusion of the C+E licence has been approved, the process has to continue as outlined. Whether the transport and logistics industry has apprenticeship standards that are fit for purpose starts and finishes with the trailblazer groups. The more fully engaged and informed they are, the better the standards will be. The Institute has a very proactive and helpful relationship team. Standards are regularly reviewed through an established process, and can be withdrawn and retired as necessary. I would urge more employers, training providers and interested parties to join the transport and logistics trailblazer group and I would be happy to facilitate introductions. 16.12.19
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11/12/2019 12:26
Business barometer
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We look back at 2019’s key economic indicators and forward to where they may be heading next year
Who needs a crystal ball?
Sterling
2019 has been another poor year for the pound’s value. The most objective view comes from the Exchange Rate Index (ERI), assessing sterling’s worth against a basket comprising many other foreign currencies that reflect the proportion of UK trade with those countries. The current ERI started on 1 January 2005 at 100. With just a couple of weeks left, sterling’s average ERI value for 2019 seems certain to pan out at 78, about 0.6% below last year’s figure. The pound’s purchasing power for imported goods and services in the three post-Brexit referendum years is 10% below its average of the three pre-referendum years. It is unlikely to improve in 2020. The median value of recent independent forecasts assessed by HM Treasury indicates that the pound’s average ERI index value next year 10 MotorTransport
Inflation
2019 was an unqualified success in terms of managing UK inflation. With just December’s data still to come, the mean of the 12 monthly consumer prices index (CPI) inflation figures this year is likely to be around 1.8%. The government’s target is 2%: this is the closest result for a decade. But within that overall inflation figure, there is a marked difference in how prices of goods and services have moved this year. Strong growth in earnings in 2019 inevitably has fed through most notably to the services sector, where the mean of the 12 monthly inflation figures is shaping up to be around 2.5%. The rise in the price of the goods is half that. Inflation has been trending downwards in the second half of this year and all the indications suggest this will continue in the near term. The Bank of England’s Monetary Policy Committee (MPC), tasked with managing UK inflation, forecast last month that CPI inflation will drop to 1.2% by the second quarter of 2020. After that, inflation is tipped to accelerate gently, reaching 1.5% in Q4 2020 and then hitting the 2% target in mid-2021. Most recent independent forecasts indicate CPI will rise a little faster, reaching 2% by Q4 2020. All in all, we can expect CPI inflation during 2020 to average between 1.4% and 1.7%.
rate will average 1.25%, starting from 1% in Q1 but picking up to 1.5% by Q4. The European Commission thinks the UK will do even better, with GDP growth
of 1.4% next year. That is exactly the same as the EC’s forecast for the average of the remaining 27 EU countries. So much for Brexit…
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is expected to slip a further 1% to just 77.3, equalling its worst-ever year (2017).
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The price of crude oil has been remarkably stable and relatively moderate in 2019. The overall average price of Brent oil for this year is $64 (£49/barrel, 10% down on last year’s and a far cry from its peak of $112 in 2012. Translating that into the cost of bulk diesel, the annual average price for most operators taking full loads this year is likely to have been between 100ppl and 104ppl. But that’s probably only 1% down on 2018 figures: sterling’s average value against the dollar has been 5% lower this year, eroding nearly all the benefits of cheaper oil. Most energy analysts expect to see another small drop in Brent’s price next year, with the consensus pointing to an average of $60 to $64/barrel. High global oil inventories are likely to suppress the market, particularly in early 2020, said the authoritative US Energy Information Administration (EIA). Assuming these analysts are correct, the price of bulk diesel in 2020 is likely to average out at 99ppl to 103ppl. But that forecast is accompanied by even more caveats than usual. Will the new government seek a fuel duty hike to pay for its election spending promises? And where is the pound to dollar exchange rate going in 2020?
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GDP
It looks like UK gross domestic product (GDP) is shaping up to have increased by about 1.2% in 2019, broadly in line with most forecasts made last year. If that projection is correct – the actual figure is published in February – it means our economy has seen the slowest annual growth rate for a decade. Average annual growth during that time is 1.8%. Growth is widely tipped to remain sluggish in 2020. The median forecast from independent economists cited by the Treasury suggests the economy will expand by just 1% next year. The Monetary Policy Committee is a tad more upbeat, opining that 2020’s growth
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16.12.19
SEE THE FUTURE OF COMMERCIAL ROAD TRANSPORT IN 2020
Discover how innovation can assist businesses big and small to increase efficiency and service delivery. With all the latest technology in vehicles, trailers and equipment on display, this year’s CV Show is even more unmissable than ever. Visitor registration opens in January 2020 at cvshow.com @TheCVShow
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21/11/2019 10:31
Viewpoint
motortransport.co.uk
Out with the old, in with the new
A
Steve Hobson Editor Motor Transport
s this is the last issue of MT for 2019, what lessons can we learn from the year? DON’T hold a referendum on Brexit unless you have some idea what Brexit might look like. Although the referendum was three years ago we are still learning that lesson. The resulting chaos has destroyed faith in government and our leaders as well as making the UK a laughing stock abroad. DON’T keep crying wolf over the driver shortage. Despite oft-repeated estimates that the UK is short of maybe 60,000 HGV drivers, the shelves remain stocked and driver wages haven’t doubled. MT’s cost tables (see page 26) show wages have risen by, on average, 5%, but the industry can’t keep claiming there is a crisis for ever. DON’T panic over government and
EU targets to reduce carbon emissions. Moving away from fossil fuels for long-distance heavy transport may seem an impossible dream but I have lost count of the number of conferences where decarbonising road transport has been called “the easy bit” compared with heating buildings and aviation. DO think carefully before buying a natural gas truck. Moving from fossil diesel to fossil methane may cut CO2 by up to 20% but unless biomethane starts growing on trees it won’t deliver the cuts we need. If you do the mileage and can refuel without diverting too far off route it could be a good way to save a lot of money on fuel, but long-term electric and hydrogen looks a better bets. Seasons greetings to all MT readers and may 2020 by a lot less uncertain than 2019.
Logistics future is broader than drones
U
Paul Gisbourne CEO, CitySprint
PS has applied for FAA certification for a drone service in the US, potentially allowing it to operate commercial drone deliveries in populated areas – evidence of just how much innovation is happening in logistics. Pioneering advances are opening up all sorts of possibilities for new types of delivery, and undoubtedly autonomous delivery pods and drones are among the most headline-grabbing. But the reality is there is still a long way to go before drone use is commonplace; there are still too many practical limitations. Drones are only suitable for certain types of delivery, such as lightweight items, and require specifically adapted facilities to receive them at scale. This limits their broader use. Airspace legislation has also yet to catch up. Although there are clear indications that this is being looked at, CAA regulations state that UK operators of commercial drones must maintain visual contact with them at all times. This restricts the distance over which deliveries could take place so much as to make them almost pointless.
12 MotorTransport
We are also still some way from having the capability for an individual to receive a package by drone, no matter where they are. Parcels can’t talk: they need someone to find the person expecting them and help navigate doors, lifts and receptions etc. This is not to say that we do not need a wider range of vehicles for logistics work, especially in urban environments, where congestion, air quality, pedestrianisation and reduced speed limits are all changing the way deliveries happen. New vehicles already available, such as the cargo bikes we have been introducing across our fleet, can reduce emissions dramatically while still holding the capacity of a small van. They have a much more important role to play in logistics in the near to medium term. While drones may have a place for some types of deliveries between established hubs, we shouldn’t let their novelty distract us from other important improvements we can make in our industry.
The newspaper for transport operators
To contact us: Tel: 020 8912 +4 digits or email: name.surname@roadtransport.com Editor Steve Hobson 2161 Head of content Tim Wallace 2158 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 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 MT Awards Katy Matthews 2152 Managing director Andy Salter 2171 Editorial office Road Transport Media, First Floor, Chancery House, St Nicholas Way, Sutton, Surrey SM1 1JB 020 8912 2170 Free copies MT is available free to specified licensed operators under the publisher’s terms of control. For details, email mtsccqueries@roadtransport.com, or call 01772 426705 Subscriptions 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
16.12.19
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Marketplace news First joint auction sees over 50% of stock sold in new format designed to generate extra buyers
CVA launches combined used truck and plant sale Commercial Vehicle Auctions (CVA) has introduced a new combined plant and used truck sale at its Doncaster site to get more stock in front of a wider audience. The first of the new format sales, which saw running and static plant sales paired up with the regular running truck auction, was held on 22 October and saw 55% of all stock sold generating a total of £850,000. Speaking about the new format
auction, CVA MD Ross Dalton commented: “We’ve noticed that our truck buyers will buy the odd bit of plant if it’s in a truck sale, but they buy it in a very ad hoc way. None of the plant buyers buy those items though because they just don’t come to the auctions. That’s why we thought about putting more product in front of them both. “It doubles our crowd, creates extra buyers and should lead to more stock as success will breed
more success,” added Dalton. Highlights of the first sale included the last of a batch of coaches which CVA had been gradually releasing on to the market, as well as a 2010 Johnston’s road sweeper on a DAF LF55 chassis which performed strongly to reach a £33,000 sale price. Dalton added: “It [the coach sale] was a superb achievement and goes to prove how a steady drip feed of stock for large batches can see prices gradually rise once we’ve
had the chance to build a marketplace for them. The demand we have built for them with an extensive advertising campaign saw prices peak at up to 100% higher values for the same product.” The combined truck and plant auction will continue once a month, which Dalton believes will prove popular for plant customers as the more regular auction will allow assets to be remarketed sooner, having previously only had a sale every six weeks.
Ford & Slater invests in additional workshop capacity ‘Ultimate fuel-savers’ start work at Maritime Container transport company Maritime Transport has added 20 Volvo FH 460s to its fleet. The 6x2s with pusher-axles are on a two-year Volvo Blue service contract but will be kept for five years. Specified with 13-litre engines and I-Shift transmissions, they have Volvo’s new RSS1344E rear axles with a 2.47:1 final drive ratio as well as low rolling resistance 315/70 R22.5 Goodyear Fuelmax 2 tyres. Other options include a long-haul fuel software package with gel batteries, clutchable air compressors and variable rate steering pumps. Maritime Transport has also decided to delete the external sun visors from the vehicles and has rounded off the aerodynamic improvements with a front bumper spoiler. “We’ve done a lot of research with Richard Sharples and Andrew Low at Volvo Trucks UK to put together an ultimate fuel saving specification for these Volvo FHs,” said Stuart Wardlaw, fleet director at Maritime Transport. 14 MotorTransport
DAF’s Ford & Slater dealer group has invested £150,000 in a new workshop at its Leicester site. The company claims the new facility will help support subcontractors, and combat the increased volume of work brought on since gaining Stage 2 Type Approval. Stage 2 Type Approval allows a vehicle built by the manufacturer to go on to a second stage builder for modifications – for example, where a DAF CF chassis cab goes on to a second manufacturer to have a body fitted. The second stage builder completes the vehicle using system components approved by the first manufacturer. The dealer group’s new Type Approval covers the fitment of over 100 components across DAF’s LF, CF, and XF ranges. DAF said it
also ensures that the dealership can maintain consistency, traceability and quality of installations without the need for Individual Vehicles Approvals. Ford & Slater joint MD Tim Strevens said: “We received our first batch of Type Approvals in April 2019 and have since received five more covering nine models. This means our Type Approval covers the specification of around 5,000 of the new DAF trucks sold annually. “As the volume of vehicles going through our Leicester site increases, this new building will ensure we continue to support our subcontractors and give them an environment to work in safely and efficiently. “It’s a win for us, our subcontractors and, most of all, our customers,” Strevens concluded.
16.12.19
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Sparshatt completes Dartford development
F&G Commercials morphs into Motus Commercials After having been acquired by Imperial Commercials and Imperial’s subsequent name change to Motus Commercials, DAF dealer group F&G Commercials has finally changed its name. The acquisition in July this year saw the number of Motus-operated DAF sites in the UK grow to 29 adding F&G’s Manchester, Barnsley, Huddersfield and Oldham sites into the group. In addition, an accident repair centre operated by F&G in Barnsley was added into Motus
Commercials’ sister division Motus Vehicle Solutions. Motus Commercials MD Matthew Lawrenson said: “We would sincerely like to stress to customers that the F&G Commercials business will stay the same – the same locations, the same services, the same people. “It just makes sense now that we change the name of the F&G Commercials business to bring it in line with the Motus Commercials brand.”
Sparshatt Truck & Van has completed a £2m redevelopment of a new 1.8-acre site in Dartford. The Mercedes-Benz and FUSO dealer has built 12 servicing and PDI bays and 13 dedicated van bays in its 4,475sq m buildings, with 3,500sq m of external space for parking and service vehicles. The new site joins two others in Sittingbourne with sites in Tonbridge and Ashford. Sparshatts has also invested more than £500,000 in its Sittingbourne sites, refurbishing its headquarters and creating a dedicated van centre on the site of the old Sparshatt’s body shop. The new service centre has eight new van bays and has created six new roles. Vicki Ponder, group projects manager at Sparshatt, said the creation of dedicated Van and Truck service centres had brought total bay numbers across both parts of the Sittingbourne site from 16 up to 22, promising a 27% increase in capacity over time. “Across both the Truck and Van Centres we’re handling up to 30 service vehicles per day right now.”
Actros prices ‘at lowest point’ Mercedes-Benz Actros MP4 prices have probably reached their lowest point right now and values may well begin to rise again next year, Steve Chadbourne, used truck sales manager at Mertrux, has suggested. Prices of the outgoing generation of the Actros have tumbled due to a lack of demand in the export market, which has resulted in an over-supply of units in the UK used market. The collapse of Gulliver’s Truck Hire late last year also saw hundreds of fourth generation Actros flood the market, he points out. “Axors are going fairly well because they’re pretty bulletproof, I’ve seen 13-plates going for £13,000 and they’re outstripping the Actros. The MP4 prices are coming down, and are now at a level where you’re almost at Renault and DAF prices,” Chadbourne explained. “Part of the problem is that the export has dropped off, and you’re not getting the residual value. If you take an MP4 on a 13-plate with average mileage they’re selling at the auctions for about £9,000. The 16.12.19
last MP3 I saw went for £21,000,” he continued. As more African markets begin to tighten their import rules, exporting used trucks from the UK is becoming increasingly difficult, resulting in a saturation in the domestic market for certain products. “Next year is the crux of seeing the MP4 returning on value as the MP3 becomes too old to go anywhere. Once they [MP4] start going, it will take a while as there’s a lot, but I think the prices will harden,” Chadbourne said. “The market is in a cycle and now that the MP5 is out, you can probably add five years, taking you to 2024 when the MP5 will then be at export age. Then you might see the MP4 go [higher] again on prices because people won’t want to deal with the mirrorless systems and the technology of the MP5. “Either way, there’s going to be a lull followed by a slow increase in prices for the next few years. In my mind, if you have an MP4 from 2016 onwards I think those are the vehicles that will be in a winning position.” MotorTransport 15
Marketplace
Speculate to accumulate
O
perating from seven sites across the north of England, which range from Blaydon in the north-east down the east coast to Lincoln and west across to Carlisle, North East Truck and Van (NETV) is one of the UK’s largest independent dealer groups. It holds franchises for IVECO, MAN, Fiat Professional and LDV. From renewed sales processes to marketing strategies, commercial director and dealer principal Ian Hopkins says where to invest is more about continued development than about pin-pointing priorities – however spending money on the company’s infrastructure is also high on his agenda. Hopkins sees a dealership as one entity with sales and aftersales working closely together to build relationships with customers to support their ever-changing needs and to keep pace with market demands. With IVECO staking its reputation on gaspowered engines with CNG and LNG, the dealer network has followed suit. “We have installed gas truck workstations at Billingham, Blaydon, Carlisle and Immingham, and spent more than £7,500 on tooling for gas engines. There is also investment in the technicians to learn about the new products,” he says. “We’ve also invested in a Stralis 6x2 LNG demo tractor that is being trialled by many companies, some of which are coming under pressure from their customers to reduce their carbon footprint.”
16 MotorTransport
North East Truck & Van commercial director and dealer principal Ian Hopkins talks to Kevin Swallow about spending money in the right places and the arrival of new products Stocking plans
With Brexit looming large on the horizon, investment in stocking vehicles and parts has also been pivotal. Additional pre-Brexit stock both on the forecourt and for some customers has helped price-secure future purchases. “This allows customers to continue making transactions without any nasty surprises,” he explains, adding that although the partnership with MAN is based on aftersales and parts, the manufacturer has invested heavily in the development of its sales network. “That commitment by MAN is key to NETV as a dealer group, allowing us to expand our technical support through our investment in people, workshops and parts support at Carlisle and Hull. Testament to that is a burgeoning MAN customer base at both sites,” Hopkins explains. The same goes for parts, he says: “We’ve invested 16.12.19
motortransport.co.uk
heavily to support customers and supply the parts required if there are delays and tariffs due to Brexit. We are taking in more volume and protecting the price of stock, so customers don’t have to shop around as they know we are supplying value for money.” As for the product range, Hopkins is pleased how IVECO’s X-way construction range has been accepted by operators and how it compares with the market leaders. “Stralis has been successful; it is a good solid product. I am excited to see the right-hand drive S-Way; it looks and feels good, and early feedback is positive,” he says, adding: “There is also the expected MAN launch of its new product range, so there are exciting times ahead.”
Servicing
NETV has also upped its service hours to meet customer demand. A rapidly increasing workload at Carlisle meant it became a 24-hour site, like the Blaydon and Billingham dealerships.
“That’s been a great benefit to our customers, increasing our capacity and using our assets to their full potential. It has also enabled us to spread our work out to suit them,” says Hopkins. “We’ve increased our service hours at Immingham off the back of some contracts NETV has secured, and hours have been extended at Hull in response to local hauliers who work away from the port during the week but return at weekends.”
FULL HOUSE: NETV commercial director Ian Hopkins, left, believes the company’s strength is the breadth of its offering
Used trucks
In 2015 IVECO kicked off a new pre-owned truck and van programme called OK Trucks, replacing IVECO Used. Two years later it arrived in the UK, with NETV one of the first to sign up. “Used truck and van sales have always been a successful market for NETV, so becoming an OK Trucks outlet was an easy decision to make,” he says. “Being involved with OK Trucks has stimulated sales over the past two years.” To add to the second-hand portfolio, NETV has now joined MAN TopUsed network selling used trucks from its site in Hull. He says: “MAN TopUsed has a solid reputation for offering high-quality, used trucks, and it too will be offering second-hand TGE vans in the future. It has already paid dividends with some significant purchases by local businesses.” ■
HARGREAVES TAKES HI-ROAD TO 24-HOUR SUPPORT Hargreaves Industrial Services has taken delivery of 12 new IVECO Stralis Hi-Road tractor units thanks to the servicing availability of North East Truck & Van. Overnight servicing and maintenance from the main dealer, which is just two miles away, was a key reason for the conquest deal taking place with the new units arriving into the 24-strong fleet. The IVECOs are the first to be operated by Hargreaves, who will use them across Humberside. The Stralis models are Hi-Road 6x2s producing 460hp and 2,150Nm of torque from a 11.1-litre Cursor 11 diesel engine via an 12-speed automated gearbox. The tractor units, which are now the only marque on Hargreaves’ artic tipper fleet, will operate with tri-axle Weightlifter tipping trailers. Trevor Holland, warehouse and 16.12.19
distribution manager at Hargreaves Industrial Services, says: “Reducing downtime is critical for our work, so being able to benefit from an IVECO dealership which is open 24 hours a day during the week, and right on our doorstep, sealed the deal. Our drivers can now drop the trucks off in the evening, trusting fully that the team at NETV will have them ready to pick-up the next morning.” It is also the first time that Hargreaves
has done business with NETV, with Holland adding that they found the team extremely helpful from start to finish. “They understood how important it is for our trucks to be on the road when we need them most, and tailored the deal to include scheduled overnight maintenance. We also looked carefully at the spec of the Stralis Hi-Road and have full trust in it to deliver exactly what we need,” he adds. The new AT440S46TX/P units have been specified with automatic rear door release for the tipping trailer, as well as on-board weighing equipment to ensure the trailer aren’t overloaded while operating seven days a week and running for around 50,000km per year. All servicing and maintenance will be carried out at NETV’s site in Immingham as part of a five-year IVECO Elements repair and maintenance package. MotorTransport 17
Cost tables
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26 MotorTransport
The delay to Brexit has prolonged the uncertainty over the UK’s future relationship with the EU but, on the whole, 2019 was a surprisingly stable year for haulage
A
s far as the factors that go into compiling the Motor Transport cost tables are concerned, it has been a funny old year. Our expectation that we would have a resolution of the Brexit issue by now has, of course, not been realised. Maybe next year? Meanwhile, the uncertainty has become less of an issue as operators have realised that life and business have to go on regardless. This time last year, we incorporated a relatively large rise in fuel prices. Prices at that time were particularly volatile and our reference point was at a high level. Price fluctuations have been rather less dramatic in the past year, although one act of terrorism did cause a temporary scare, and the current trend is downwards. Our figures reflect a slight reduction in fuel cost, although AdBlue has gone up by a small amount. Inflation has been on a downward slope for most of the past 12 months, apart from a couple of spikes to 2.1%. The trend is set to continue a bit beyond the current 1.7% before steadily climbing again over the next year to 2%, where it is expected to stabilise. Driver wages have again been subject to market forces as no great progress has been made towards a long-term solution to the shortage of those willing either to acquire a new vocational licence or to use the one they have. The situation hasn’t been helped by the reported return to their homeland of many Eastern European drivers, either because of post-Brexit uncertainty or simply because the UK is relatively less financially attractive than it was. Vehicle and spares prices are still poised to rise substantially should Brexit ever happen and tariffs be imposed. That aside, most manufacturers have taken the opportunity to incorporate some significant engine changes in the transition to Euro-6d, which will have a modest effect on prices; on the flip side, their fuel economy should improve. We considered incorporating alternative fuel running costs into this year’s tables but, while they are increasingly relevant, we feel there are still too many unknown variables to make it feasible this year. n 16.12.19
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ARTICS
32-tonne 4x2 unit, taxed for tandem-axle trailer
38-tonne 4x2 unit, taxed for triaxle trailer
44-tonne, 6x2 unit, taxed for triaxle trailer
Tandem-axle trailer (curtainsided)
Triaxle trailer (curtainsided)
71,170 113.1 10.4 34.5 7 10,857
73,485 113.1 9.2 34.5 7 11,210
84,628 113.1 8.5 34.5 7 12,910
19,323
20,645
12 1,965
12 2,100
38,923 3,086 22,536 1,136 8,616 3,503 77,800 3,890 81,690
38,923 3,607 22,843 1,136 8,896 3,616 79,021 3,951 82,973
38,923 3,990 24,857 1,136 10,245 4,165 83,316 4,166 87,482
1,447 1661 3,107 155 3,263
1,545 1829 3,374 169 3,543
1,776 355 32.29
1,804 361 32.80
1,902 380 34.58
71 14 1.29
77 15 1.40
49 0.60 2.01 8.13 60.18 3.0 63.19
56 0.68 2.30 8.23 67.10 3.4 70.45
60 0.74 2.79 8.65 72.66 3.6 76.30
1.72 2.83 4.55 0.2 4.78
2.65 3.16 5.81 0.3 6.10
199 165 145
209 174 153
222 186 164
10 9 8
12 11 10
7.5-tonne GVW (curtainsided)
13-tonne GVW (curtainsided)
18-tonne GVW (curtainsided)
26-tonne GVW 6x2 (curtainsided)
32-tonne GVW 8x4 (tipper)
45,221 113.1 17 34.5 5 7,136
52,462 113.1 15 34.5 5 8,279
67,880 113.1 13 34.5 5 10,663
85,897 113.1 10.5 34 5 13,873
114,934 113.1 7.5 34 7 22,386
31,232 1,825 7,628 165 7,617 1,190 49,657 2,483 52,140
34,064 2,086 11,181 189.5 8,837 1,380 57,737 2,887 60,624
35,282 2,316 14,869 615 11,443 1,778 66,303 3,315 69,619
36,585 2,832 15,617 615 14,405 2,313 72,367 3,618 75,985
36,585 2,832 20,147 1,136 13,221 2,985 76,906 3,845 80,751
1,133 227 20.61
1318 264 23.96
1513 303 27.52
1652 330 30.03
1755 351 31.92
30 0.37 2.30 7.39 40.30 2.02 42.3
34 0.42 2.60 8.33 45.63 2.28 47.9
40 0.48 2.72 7.92 50.67 2.53 53.2
49 0.59 3.44 8.65 61.65 3.08 64.7
69 0.82 7.95 14.67 92.00 4.60 96.6
173 129 107
199 149 124
227 169 140
255 191 160
298 231 198
Vehicle cost (£) Fuel cost (ppl) ex-VAT, average monthly MPG AdBlue cost (p/litre) Depreciation period (years) Residual value (£)
ANNUAL STANDING COSTS (£)
Driver wages and NI Vehicle insurance Establishment/overheads Vehicle tax (VED) based on no RPC but with Levy Depreciation Finance cost Subtotal Profit allowance (5%) Total annual standing costs (£)
STANDING COSTS ALLOCATION
Per week (£) based on 46 weeks Per day (£) based on a 5 day week Per hour (£) based on an 11 hour day
RUNNING COSTS (P/MILE, 80,000 M/YR)
Fuel AdBlue (at 4% of fuel consumption) Tyres Maintenance and repairs Subtotal Profit allowance (5%) Total (p/mile)
CHARGE PER MILE (P)
60,000 miles/yr 80,000 miles/yr 100,000 miles/yr
RIGIDS Vehicle cost (£) Fuel cost (ppl) ex-VAT, average monthly MPG AdBlue cost (p/litre) Depreciation period (years) Residual value (£)
ANNUAL STANDING COSTS (£)
Driver wages and NI Vehicle insurance Establishment /overheads Vehicle tax (VED) based on E6 and Levy without RPC Depreciation Finance cost Subtotal Profit allowance (5%) Total annual standing costs (£)
STANDING COSTS ALLOCATION
Per week (£) based on 46 weeks Per day (£) based on a 5 day week Per hour (£) based on an 11 hour day
RUNNING COSTS (P/MILE, 60,000 M/YR)
Fuel AdBlue (at 4% of fuel consumption) Tyres Maintenance and repairs Subtotal Profit allowance (5%) Total (p/mile)
CHARGE PER MILE (P)
40,000 miles/yr 60,000 miles/yr 80,000 miles/yr 16.12.19
➜ 28
MotorTransport 27
Cost tables
VANS
motortransport.co.uk
1.6-tonne GVW (550kg payload)
2.1-tonne GVW (750kg payload)
2.8-tonne GVW (1-tonne payload)
3.5-tonne GVW (1.4 tonne payload)
16,008 113.1 43 5 1,799
16,238 113.1 40 5 2,119
22,572 113.1 33 5 2,500
23,685 113.1 28 5 4,112
26,699 1,163 5,468 140 2,842 360 36,672 1,834 38,505
26,699 1,240 5,468 140 2,824 424 36,795 1,840 38,635
26,699 1,472 5,468 140 4,014 526 38,319 1,916 40,235
26,699 1,635 5,468 140 3,915 653 38,510 1,925 40,435
837 167 15.22
840 168 15.27
875 175 15.90
879 176 15.98
12.0 0.59 3.48 16.03 0.8 16.8
12.9 0.71 4.11 17.67 0.9 18.6
15.6 1.07 4.53 21.18 1.1 22.2
18.4 1.42 4.96 24.74 1.2 26.0
209 145 113
212 147 115
223 156 123
228 161 127
Vehicle cost (£) Fuel cost (ppl) ex-VAT, average monthly MPG Depreciation period (years) Residual value (£)
ANNUAL STANDING COSTS (£)
Driver wages and NI Vehicle insurance Establishment /overheads Vehicle tax, based on E5 Depreciation Finance cost (5-yr term) Subtotal Profit allowance (5%) Total annual standing costs (£)
STANDING COSTS ALLOCATION
Per week (£) based on 46 weeks Per day (£) based on a 5 day week Per hour (£) based on an 11 hour day
RUNNING COSTS (P/MILE, 30,000 M/YR)
Fuel Tyres Maintenance and repairs Subtotal Profit allowance (5%) Total (p/mile)
CHARGE PER MILE (P)
20,000 miles/yr 30,000 miles/yr 40,000 miles/yr
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9,618 HGV, PSV, FORKLIFT AND MOTORCYCLE DRIVERS TRAINED IN TANZANIA, UGANDA AND ZAMBIA
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A long road to safety
Truck driving is a popular career choice for young people in Zambia, but road safety standards are low and accidents are common. One UK charity is working to change that. Steve Hobson reports
D
riving a truck or bus in southern Africa is a dangerous occupation, and raising the standards of driver training is a vital step towards reducing the high death toll from road traffic accidents. UK overseas development charity Transaid is playing a major role in developing effective HGV and PSV driver training in Tanzania, Zambia and Uganda, and is now looking to roll the programme out to more countries, including the Democratic Republic of the Congo. A delegation of UK partners and ambassadors – led by Transaid head of fundraising Florence Bearman and fundraising assistant Elena Leonard, and hosted by Transaid’s project manager in Zambia, Victor Simfukwe – visited the Zambian Industrial Training Centre (ITC) to see what Transaid is achieving and what the industry can do to make its work even more effective. The ITC was formed in Zambian capital city Lusaka in 1986 as a joint venture between the Zambian and German governments to raise the standards of vocational training in Zambia. Since then, the Germans have shifted their focus to the copper mining industry in the north of the country, and since 2004 Transaid has been the main overseas partner supporting the ITC, now part of the Zambian Ministry of Higher Education. “The partnership with Transaid has seen massive benefits for us,” says Lloyd Mbasela, director of the ITC. “It has transformed the driver training we are able to deliver.”
Funding
Only 10% of the ITC’s funding comes from the government, with the rest coming from its commercial activities – which see 2,000 to 4,000 trainees each year, including HGV, PSV and fork-lift truck drivers, receive high-quality training. Its goal is to grow the number of trainees by 400 each year, but it needs more vehicles and instructors. This training ranges from licence acquisition for novice drivers to defensive driving refresher training for experienced drivers and hazchem training for drivers of the numerous road tankers on Zambia’s roads. Albert Banda, one of the senior driver trainers, got involved with the ITC after his cousin was injured in a head-on collision between a Zambia-to-Malawi bus and a truck – an accident in which 34 people died. He also spent time as a truck driver and saw first-hand how long-distance drivers often do 19 hours behind the wheel a day to maximise earnings. The number and quality of training vehicles based at 16.12.19
the ITC have increased significantly since Transaid got involved, going from a single venerable Mercedes-Benz to a fleet that now includes 10 trucks, two buses and three fork-lift trucks. Ageing ERFs are still much in evidence and the centre faces a constant battle to keep these vehicles in a good state of repair. The ITC is not permitted to buy secondhand vehicles in Zambia and cannot afford new trucks, so it relies on vehicles donated by supporters overseas. But it costs about £4,000 to export a truck from the UK.
Test standard
Training a novice driver to test standard takes 15 days and costs 3,000 Zambian kwacha (£180). A qualified HGV driver can earn about 2,000 kwacha (£120) a month on local work and up to 5,000 kwacha (£400) a month as an international driver. “We have a lot of young people looking for work, so there are plenty of people wanting to train as drivers,” says Mbasela. “Our challenge is finding enough people who can afford to pay.” This is a particular problem in Zambia, where there is a thriving black market in fake licences. The ITC also faces competition from private driver training schools – both in Zambia and in other countries such as South Africa – and so is striving to be seen as a centre of excellence that fleet operators will want to use for training to ensure their drivers are safe and legal on the roads. Transaid is clear that its role in the ITC is not to directly subsidise training courses but to support the centre with donated vehicles and seconded driver trainers to create a financially sustainable self-funding business. Transaid’s annual revenue of £1.7m (£700,000 of which is donated by the UK transport industry) is dwarfed by the £2bn raised by Save the Children, for example, but it works closely with other charities and governments to maximise its effectiveness.
Life on the road in Zambia
Zambia is landlocked and surrounded by eight other countries. It is a major transit route and many of the trucks on main north-south highway the Great North Road are from other African countries, especially Tanzania and Namibia. As well as conventional 3+3 tractor-trailer combinations, roadtrains with a 3-axle tractor hauling two tandem-axle trailers are common. With little rail freight capacity, there are a lot of petroleum tankers on Zambian roads, which are often the target of fuel thieves. The pump price of diesel in ➜ 34 MotorTransport 33
Transaid
motortransport.co.uk
Zambia is high at around £1 per litre (more than the price of a bottle of the finest local beer, Mosi) because of a combination of the weakness of the Zambia Kwacha against the dollar and 60% fuel duty. This means drivers often supplement their wages by selling fuel siphoned from their truck tanks. The high sulphur content of Zambian diesel means that Euro-6 trucks cannot be used; although low-sulphur diesel is available, it is even more expensive.
LONDON BUS ARRIVES IN LUSAKA
Imported vehicles
While the majority of cars on the roads are Japanese – apart from the odd Ford Ranger pick-up – there are few Japanese-built trucks, other than a handful of Mitsubishi Fusos and Hinos. Most of the trucks on Zambian roads are imported second-hand from other right-hand drive markets such as the UK and, increasingly, Japan. German and Swedish brands still dominate, although there are a fair few DAFs and the occasional Renault or IVECO. There are also a good number of US-spec bonneted tractors. Although many of the 3-series Scanias, for example, have clearly come from UK operators, 12% of Scania’s 2018 sales were in Asia and this is a growing source of second-hand vehicles. A lot of Japanese trucks damaged in the 2011 tsunami made their way to Africa. But many operators are now switching to new low-cost Chinese trucks, such as the Shacman F3000, which uses a Cummins engine and an MAN cab. These vehicles still have manual gearboxes, which is causing problems for the ITC as more and more of its donated training vehicles are now automatics. This is why the 2005 Volvo FM12 donated by Malcolm Group four years ago remains the ITC’s most valuable truck – it was one of the last Volvos to come out of the factory with a manual box. Two of its sisters are still in use by Malcolm for short trips and shunting, and chief executive Andrew Malcolm, ➜ 36
The visit from the Transaid delegation to the ITC was an opportunity to hand over the latest addition to the training fleet – a 2006 Alexander Dennis single-deck bus donated by Go-Ahead Group. The red bus was based in Putney in south London and spent its first life carrying passengers along the south bank of the River Thames. The official handover took place in front of the Jayne Gray Assembly Hall, dedicated to the memory of the Scottish haulier who was tragically killed in a road traffic accident on a Transaid fundraising cycle ride in Zambia in 2018. The building was officially opened a few weeks earlier by a delegation of Transaid trustees led by chair Jo Godsmark. An additional fork-lift truck donated by UniCarriers was on its way to the ITC but had been delayed at Dar es Salaam.
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Transaid who was on the visit, says one of these will soon be on its way to Zambia. Because many Zambian drivers passed their tests in automatics they are struggling with the new wave of Chinese manual vehicles and are coming back to the ITC for refresher training. There are no tachographs or drivers’ hours rules, so long driving stints on largely straight featureless roads makes long-distance truck driving a high-risk profession. There are no official statistics for the number of truck drivers and HGVs on the road or the rate of casualties among HGV drivers in Zambia, something the government is planning to address next year. But Mbasela says: “Traffic accident rates in Zambia are on the high side.”
Keeping it simple saves lives
The government of Zambia has set itself the goal of eradicating malaria by 2021 – an ambitious target, bearing in mind that in 2015 there were 5 million cases of the mosquito-borne disease. If left untreated, severe malaria can kill in a few hours, and children under five, who have not acquired some level of immunity, are at the highest risk. Communities in remote areas, especially in the swampy regions of central Zambia, have to be self-reliant, as poor roads and large distances to healthcare facilities make it difficult to seek treatment quickly – even when the signs of severe malaria are recognised. Efforts to eliminate the malaria-carrying mosquito and to vaccinate against the disease are being made, but progress is slow. Miscarriages and stillbirths are also common, with pregnant women having to walk up to 70km to get medical help if they have complications with the birth. The poor roads and cost of buying and maintaining motorised vehicles in these rural communities means a simple solution is needed – enter Transaid’s bicycle ambulance. These robust machines are cheap to buy – £540 from a local Zambian supplier and Transaid partner – and easy to maintain, as bicycles are the most common form of transport apart from walking. They are looked after and ridden by a network of emergency transport scheme (ETS) volunteers, who give up their time to transport the sick to the nearest healthcare facility any time of the day or night. Bicycle ambulances have been given to 85 rural communities in the northern districts of Serenje and Chitambo. Serenje has a population of 150,000 and is served by 29 community healthcare facilities and one hospital, while Chitambo has 14 health centres and one hospital serving a population of 63,000. So the biggest problem is getting the sick to where they can receive medical care, rather
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than a lack of facilities. Since the arrival of the bicycle ambulances, the death rate from malaria in under-fives in Serenje has been cut from around six per year to zero.
Joint venture
The bicycle ambulances are part of a wider joint venture programme, Mobilising Access to Maternal Health Services in Zambia (MAMaZ) Against Malaria, which is also distributing mosquito nets (and encouraging villagers to use them for their intended purpose, rather than for fishing or keeping insects off their crops) and educating people on the symptoms of severe malaria. The programme involves training local volunteers to administer rectal artesunate suppositories, which stabilise victims of severe malaria for up to 12 hours, long enough to allow them to be transported by bicycle ambulance to a healthcare facility. The Transaid delegation visited a community in Chitambo to see the MAMaZ volunteers in their bright orange tops in action, delivering their life-saving messages in plays and songs. This was reinforced by the presence of Chief Chitambo himself, a highly influential hereditary tribal ruler who is part of the state government. In the peak season for malaria, between February and April, Chitambo alone can see up to 900 cases of malaria each week – and while 90% of those are mild, rather than the potentially fatal severe form, this is among the highest incidence in the country. The bicycle ambulances have been a contributory factor in Chitambo not seeing a single death from malaria in the 2019 peak season. The success of the programme means that it is being rolled out to three more districts, and RAS now form part of the Zambian government’s national malaria eradication programme. n
WITH A LITTLE HELP FROM OUR FRIENDS Transaid enjoys the support of 36 partners in the UK, and the delegation to Zambia was made up of representatives of the partners and ambassadors: Shane Brennan, chief executive, Cold Chain Federation Richard Burnett, chief executive, RHA Ben Colson, retired bus operator Martin Dean, MD bus development, Go-Ahead Group, and president, Confederation of Passenger Transport Kelly Hobson, group senior marketing manager, Ligentia Andrew Malcolm, chief executive, Malcolm Group Tim Moran, MD, Lineage, and president, Cold Chain Federation Roger Turnbull, sales director, MAN Truck & Bus UK To get involved, contact Florence Bearman on florence@transaid.org
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Profile: Gregory Distribution
Old-school rules deliver the goods
100-year-old firm Gregory Distribution finds a traditional approach works best – whether in terms of fleet management, staff relations or keeping its clients happy, writes Steve Hobson
G
regory Distribution recently celebrated its centenary by welcoming HRH the Prince of Wales to its Cullompton distribution centre. The heir to the throne met CEO John Gregory, whose grandfather Archie founded the family firm in 1919, as well as his 95-year-old father Jack, who ran the company from 1947 to 1985. “There aren’t many transport businesses of this size that are still private family companies and 100 years old,” says John Gregory. “HRH’s visit was the proudest day in the history of the company.” Prince Charles is also the Duke of Cornwall, which is well within the south-west of England territory where Gregory has a significant market share. “I think the Duchy has 154 farms in its patch,” says Gregory. “We collect milk from many of those farms.” The company has come a long way since Archie’s single horse and cart, with group annual turnover of over £250m, a network of more than 30 sites with 1m sq ft of warehousing and 100,000 pallet spaces across the UK, a fleet of over 1,000 trucks and 2,000 trailers, and nearly 2,700 employees. But Gregory says the job is far from finished and he has no plans to sell up and retire. “Over the years we’ve grown the business with a mixture of organic growth and a few acquisitions,” he says. “Some of those have been filling gaps in our network, some have been significant upfront investments like ARR Craib [in Aberdeen], Framptons [in Shepton Mallet], Kay [in Plymouth] and our joint venture with Hayton Coulthard [in south-west Scotland]. We just see what comes along but we like family businesses with good heritage and medium-sized customers. We don’t have
PALLET NETWORKS: POISED FOR CHANGE? Through its various acquisitions Gregory Distribution has ended up being members of two pallet networks. ARR Craib (pictured) runs the northern Scottish hub for Palletline while Gregory itself is involved with both Palletline and Palletways, joining the latter as it acquired Kay Transport in Devon in 2009. Gregory foresees some consolidation among pallet networks as they struggle to recruit good-quality members in hard-to-serve parts of the country. “We’re a significant player in the pallet world but in terms of the viability of seven networks, I don’t know,” he says. “This is a relatively new sector and at some point, history says it will consolidate. “Our experience is that pallet networks are very effective. I could be cynical and say we have the advantage of being able to move from one network to another if there’s a point of weakness. But, in reality, we have not had problems with service through the pallet networks.” But Gregory admits that the push by some networks including Palletways to put heavy B2C pallets into networks for home delivery is “a massive problem”. “I cannot understand it,” he says “Why would we still be doing home deliveries without a premium? There should be a premium for home deliveries. Similarly, the debate about pallet weight and tail-lifts needs resolving and to be defined so networks and individual hauliers are not making arbitrary decisions.” 38 MotorTransport
customers that dominate our businesses. We like spreading our risk by being strong in a number of sectors. “This is now a substantial business. We’ve got to be very mindful of everything, from a customer’s point of view but more importantly from 2,700 employees’ point of view.”
South-west stronghold
While Gregory Distribution spans the UK with its 30-plus depots, many of which are on customers’ sites, its ‘DNA’ is still strongest in the south-west of England and Scotland. “But we have a lot in between, and in Wales, as well,” says Gregory. “We are not strong in the south-east of England, although we have successful depots in Thame and Watford. We’ve had opportunities. There are tenders out but it just feels like a stretch too far for us right now. “We’ve got enough challenges as it is and we’re trying to not to add to them.” Angela Butler joined Gregory Distribution in 2011 as finance director, before taking on a number of operational roles and becoming MD in 2018. A pharmacology graduate from Cambridge University, she trained as a chartered accountant with Ernst & Young before working for several large PLCs including Glaxo Smithkline. She says: “It does feel as if there are a lot of businesses out there for sale at the moment, and we definitely get a lot of approaches.” While Gregory is always receptive to businesses with a good fit, he is not about to go down the Eddie Stobart Logistics route of trying to be all things to all people, however – a strategy that saw the ESL share price plunge and CEO Alex Laffey depart. “They’ve gone for the complete mix in transport solutions within the UK,” Gregory says. “I can understand why they are doing it because it’s good to have a range of solutions. For us, as a smaller player, sticking to what we know is probably a better bet. Once or twice, when we’ve gone off at a tangent, it hasn’t worked well. It’s a tough industry with narrow margins. “We never looked for any of our acquisitions. They all came to us. Nine out of 10 approaches don’t get followed up at all. Some of them we speak to, and that’s always an interesting process, but we haven’t got an ambition or strategy that says ‘we’re going to go and buy up more family companies’. “I would say our key current objective involves organic growth and consolidating what we’ve inherited with Craibs and others over the last two or three years.” Gregory holds firm to an old-school adage: turnover is vanity, profit is sanity. And he says that despite rising vehicle and driver costs, most customers continue to squeeze rates as hard as ever. “In 1992 our margin was 14% and it went down by 1% a year for 10 years,” he says. “I would definitely like to make a better margin today. “I could name you a very big global brand that recently tendered with a strategy that there would be no cost increase. We understand this sentiment and nothing 16.12.19
has changed in the toughness of this industry. However, the limitation on the supply of drivers has in some parts of the country forced price changes, but never to the benefit of our margin. It may mean the customer is respecting the fact you’ve got to be able to pay a driver and the driver has to be effective, because the numberone thing customers need is service.” For Gregory, as for many other operators, getting the most from every vehicle is now a key priority when it comes to protecting margins. “Productivity is everything,” he comments. “We’ve got to maximise productivity while controlling our costs, and in among that we’ve got somehow to make an acceptable margin.” ‘Acceptable’ is now more like 5% than 14% and even that is sometimes a struggle, he admits. “I would say that 5% for the effort and risk that goes in is the minimum reward we should accept,” he says. “Also, just because we’ve got £250m in turnover doesn’t mean it’s all good business. We’ve actually been very good at reducing the amount of failing businesses. Inevitably some areas of our business are struggling. We don’t seek to push the price up on a good piece of work because the market determines the price. It is about narrowing that gap between revenue and our cost base.” Another secret to success is not being over-exposed to any one industry sector. “We have pallet businesses. We have milk businesses. We have full load fridge businesses. We have curtainsider businesses,” says Gregory. “We have a whole range of services and they all have their quirks.”
A driving force
The company employs 1,700 drivers and is trying to reduce the number of agency drivers it uses. “We have a driver training business with 15 trainers so we do all our Driver CPCs in-house,” says Gregory. “We took on 100 apprentices this year to mark our 100 years. Not all of them are drivers but a lot are. We focus on apprenticeships to fill our rigid opportunities. “We then try to train them from rigids up to artics. We’ve got plenty of business which is artics only and that is when we run into the driver shortage around the UK. We’ve had a driver training school for 20 years now and it’s a really important part of our business. “Retention is very strong with the people we’ve trained. 16.12.19
It is something that has worked very well for us. There’s strong demand to join our apprenticeship scheme and it’s important to choose the right people and try to retain them as well.” Gregory has trainers in Scotland, Thame, Bristol, Southampton and across the south-west. “Wherever we have a rigid fleet we will bring apprentices through,” says Butler. “That gives us the channel to upgrade drivers to Class 1.”
KEEPING IT REAL: CEO John Gregory cites the old adage that turnover is vanity while profit is sanity
Levy clawback
The amount of apprentice training Gregory does means it is one of the few logistics firms to claw back a good percentage of its Apprenticeship Levy contributions. “Our exposure is £300,000-plus here,” says Gregory. “We spend a lot on training and our objective is to recover that levy and more. “We’ve been at this game for a long time and when the levy came along we got quite involved in that process. It is pretty complicated, and there was a lot of negativity around it, but we just carried on, because training people is vitally important to us. We found a way to work with the levy, but it feels burdensome. We’d been training our staff before the introduction of the levy, and it felt like a kick in the teeth to have this ‘tax’ when we already had an effective process covering training.” The skills shortage in logistics isn’t just in drivers, of course; attracting top talent into managerial roles is also far from easy. “I’m not sure it’s an attractive industry,” reflects Gregory. “It’s hard work, long hours, very stressful. Lots of working environments are very stressful but I think more people are inclined to want to leave this business than stay in it. “It would be great if we had far more women working in our industry. I’m very pleased that we have a female MD but I think we should have more.” Butler adds: “We’re doing a lot of work around employee engagement at the moment because the biggest thing really is word of mouth. That’s such a powerful tool, especially with social media. We’re probably very good at engaging at certain levels but that’s got to filter out, right down to how someone talks to a driver on a daily basis.” Rate pressures combined with near-100% service levels are clearly one source of stress in logistics. ➜ 40 MotorTransport 39
Profile: Gregory Distribution
“Over the years, there’s been phenomenal pressure through procurement and tenders to drive the price down to the point where it has become an unattractive industry,” Gregory says. “That’s exactly why the average driver age is 54. When Europe wanted to bring in a 48-hour working week, I was one of the few people who spoke out about that positively. “I think working 60-plus hours a week driving on a motorway or sitting at the back door of an RDC is extremely demanding. We can’t change that by ourselves because we’ve got to remain competitive. But it just seemed like a race to the bottom to me. “The market is determining our price but we can, to a certain extent, determine our cost base. Future investment depends on the business making an acceptable margin.” Driver wages are rising slowly, especially since the Brexit vote which has seen many Eastern European drivers return home, and Gregory hopes that will encourage more UK workers into truck driving. “The industry as a whole has realised that it has to pay more money, driven by supply and demand in certain areas,” he says. “I think the living wage is a good thing because ultimately, that’s forced up the drive to the bottom. “Hopefully, we will find that as wages at the lower end become more attractive, more people will want to come into our industry. There are tens of thousands of people out there driving white vans. That’s a logical way into driving a truck as long as there’s a pay differential.”
Fleet favorites
Gregory runs a mixed fleet of 700 tractors and 300 rigids, mainly Scania. “When I started, it was all Mercedes,” says Gregory. “My father bought Mercedes and between 1985 and 1994
WHOLE LIFE FOCUS: Gregory’s experience with Scania has been ‘excellent’ but it also runs other marques
I only bought Mercedes. Between 1994 and 2008, we moved to DAF and MAN. We did lots of trials at the time across various truck brands focusing on mpg, which assisted in our decision to embrace Scania as our core truck supplier. “I like manufacturers that have a direct involvement in ownership of the dealership networks. Our journey with Scania has been excellent. There are many people with many views within Gregory as to what truck we should have. At the end of the day we’re after the lowest whole life cost per mile. But that is a very arbitrary thing and people have totally different views on that as well. “The problem with exporting Euro-6 has changed the perception of the right age profile of a truck. Also, trucks have become much more efficient in terms of maintenance. That whole idea of ‘get rid of them at 500,000km or 600,000km after two or three years’ has moved on now. We can’t afford to operate trucks for two to three years. Our cost base would not sustain that any more. The average age of our fleet is probably three and a half years now. “We’re not exclusively Scania. In Scotland, we have Volvo, we have DAF and MAN, and Mercedes up at Craibs. Trucks are one part of our cost base, but trailers are also a huge part. From moving floors to fridges, from curtainsiders to milk tankers, there’s a lot to be thought about there in terms of whole life cost as well.” Gregory uses an asset financing model to acquire its trucks and trailers, a sort of hybrid between purchase and leasing. “They’re on our balance sheet,” Gregory says. “We generally don’t contract hire. We’re old school – we are chasing margin and reinvesting the profits into our balance sheet. We’ve tended to use the strength of the balance sheet over the years to try to own assets ourselves. “We stay away from other sources of financing because it tends to be an on-cost to us. It also reduces our ability to flex our fleet.”
Tentative trailblazer
AGENT OF CHANGE: MD Angela Butler (below) has embraced her move from manufacturing to logistics
The company is now “dipping its toe” into alternative fuels and is trialling a gas truck. “I would like to be at the forefront of that type of initiative,” says Gregory. “But at the end of the day, if there is an on-cost we would need the support of our customers. We would like to be a trailblazer but do not have an acceptable margin to play with. “We are predominantly a 44-tonne operator and we need a range of at least 400 miles. I think it’s coming and if that’s going to be part of the next challenge, so be it.” ■
IS LOGISTICS MORE STRESSFUL THAN MANUFACTURING? Gregory MD Angela Butler came into the logistics industry from manufacturing. “About eight years ago, John was looking to change the structure at board level and bring in some fresh ideas from other industries,” she says. “I’d always been in manufacturing and had run a factory for a period of time. I came through finance, so did a lot of finance, change management and then general management roles. “My initial role here really attracted me because it was more than finance. It was finance plus looking after the supply side of the business. I really enjoyed it. “Gradually I became more involved in the operational side of the business, and was overseeing about a third of the operation. I started shadowing Andy 40 MotorTransport
Walker [the previous MD] and after 18 months when he chose to retire, I took on his role. “What I really like about it is the fact that this is an industry in change, with lots of opportunities to drive improvement in people engagement.” Gregory Distribution has grown rapidly in Butler’s eight years with the company, with annual turnover rising from £100m to over £250m. “It’s been a really interesting journey so far, hopefully with more excitement to come,” she says. So, with her previous experience, does she believe logistics is inherently more challenging than manufacturing? “It’s an interesting question,” she says. “I think there are more things that can affect us outside our control than in
manufacturing. It has different stresses, but the commonality is the people. Even if you’ve got production lines you have to have the right people doing the right job, and happy to be there. So people engagement is a common theme across the two.” 16.12.19
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MT Awards 2019 winner profile Haulier of the Year
Haulage heroes Culina Group has shown it knows how to maximise its successes, admit its failures and constantly lift performance
C
ulina Group celebrated its 25th anniversary in 2019 by collecting the Motor Transport Haulier of the Year Award at the Grosvenor House Hotel in July. CEO and larger-than-life Dutchman Thomas van Mourik set the firm up and has navigated it from small beginnings as Müller Dairies’ distribution arm into a £650m a year temperature controlled and ambient logistics giant that sat at number 13 in the 2018 Motor Transport Top 100. The story starts in 1994 when van Mourik was asked by the owner of Müller Dairies Theo Müller to come to the UK to set up Culina Logistics. The name Culina is not the combination of anyone’s
VALUING PEOPLE The Culina management is very aware that delivering the best service requires the best people, and van Mourik says it is getting “increasingly difficult” to recruit and retain good staff at all levels. “We have to disproportionately involve ourselves with the people who are working for us,” he says. “For example, if you turn 21, or 40 or 50 or 60, I will personally send you a card. If you are employee of the month in any depot, I send a card. If a baby is born, I will send the parents a card. “Every year we do a roadshow and I will go to all 65 depots, and speak to as many people as possible, and first and foremost I say ‘thank you’. Then we review the year, what went well, what not so well and what we will do better next year. “The HR director will talk about the training and career development we have available and how people can go from the warehouse through our academy to become a driver or move from one depot to another to get promotion. “We run employee surveys across the business and we go through the results. “Finally the MD of the business will home in on what is important specifically for the people at that particular depot. “It takes me two months every year to do that roadshow and it is exhausting but totally worthwhile.” To mark the 25th anniversary, Culina hired Alton Towers for the weekend and invited the whole company to come along and have the run of the place. While wages are important to staff retention, van Mourik says it is equally important that people feel valued. But logistics is a demanding industry that has to respond to customers’ needs, sometimes at short notice, so how does Culina meet the needs of staff and customers? “By giving our people flexible hours,” says van Mourik. “We have people who don’t want to work 12-hour days but might want to do eight hours three times a week. That’s the reality of life today. We have to interact with our people in a far more social manner than we did 20 years ago. “I know that if I do not treat the guys well they will not do what is expected of them and the service will go down. “We have an expression – ‘a fish will always start stinking at the head, not the tail’ – so this culture has to come from the top. I always treat people how I would want to be treated myself and over time that culture will flow down through the company.” 44 MotorTransport
initials or the middle name of the founder’s daughter, as some believe. Its origins are far more prosaic as van Mourik explains: “Culina was started in Germany by Theo Müller before he had any involvement in distribution,” he says. “His big example in business life was the Oetker family who founded the Dr Oetker brand. They were into pizzas and Theo wanted to start up in pizzas too – and that brand would have been Culina. “That never happened so he had a limited company sitting on the shelf called Culina. At the time there was a government-set tariff for any road transport in Germany so there was no room for any negotiation with customers. The industry was highly regulated and protected so no foreign company could do any national transport in Germany. You had to go to the government to get those permits so the only thing you could do was buy a German company with those permits and then you could make a lot of money. “Theo saw the profits the transport companies were making and thought ‘I might as well have my own transport business’, so he bought a couple of companies and put them together under the name Culina. As Müller grew its presence in the German dairy sector Culina grew with it. At one stage it was probably the largest chilled operator in Germany and it started to do thirdparty work on the back of Müller’s volumes.”
Setting up in Shropshire
Müller’s success selling dairy products, especially yogurt in the UK, meant that in the early 1990s the UK supermarkets wanted him to have his own distribution operation. So Müller set up shop in Shropshire at the heart of UK milk production. “Ken Wood was at the time the pioneer of Müller in the UK. He was in charge of sales and marketing and production and now he found himself in charge of distribution,” says van Mourik. “So it went horribly wrong. Here was a salesman in charge of production, warehousing and transport – and it was a complete mess. I happened to live in the same village as Theo Müller and we got to know each other. “He knew I had lived in the UK previously and asked if I would set up Culina in the UK. By then I had had five years working for a Dutch company in Germany and was ready for a change.” Rural Shropshire sounded quite appealing so van Mourik moved his family over and set up Culina Logistics on 1 January 1994. At the time Müller product was stored in a GroContinental warehouse at Prees Green near Whitchurch run by Müller with Wincanton doing the transport, and van Mourik took over these contracts. “All the Müller guys were transferred to Culina and 16.12.19
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didn’t want their culture as it was not compatible with Culina. “He said that was not possible so I offered to pay Wincanton a sum of money, grant them a 20% shareholding in Culina Logistics and move their customers over to us. So we did the deal, which was unique and quite complicated. Effectively we bought the revenue which was a big step change for us.” Soon after it signed the deal with Culina, Wincanton ran into difficulties after some disastrous acquisitions that saw the share price fall to 30p and McFaull step down as CEO. He was replaced by Eric Born who was tasked by the shareholders with turning the company around. “Eric was in need of some cash and he asked us to buy his 20% stake in Culina,” says van Mourik. “So Müller ended up again being the 100% owner of Culina Logistics.”
Big mistake
the Wincanton contracts became my responsibility,” he says. “Within a fortnight we halved the warehouse workforce because it had been so inefficient and by the end of the year we served notice to Wincanton and put our first trucks on the road.”
Automating the future
By 1996 the original warehouse had become too small so Culina started developing an automated warehouse in Market Drayton next to the Müller dairy. At 15,000 pallet spaces it was at the time three times bigger than Müller needed so that gave Culina the opportunity to go after third-party contracts. “The first customer we landed was Kraft Jacobs Suchard, which is now Mondelez, a customer of Wincanton,” says van Mourik. “They were used to an automated environment as they had product in a large automated store in Germany where Culina did all the transport. “We then had a bit of luck. We came into contact with Tropicana, which was then owned by Seagram, and they wanted distribution and sales in the UK. So we did a combined deal with Müller and Culina and that acorn grew into a oak tree.” Tropicana and Müller’s growth quickly filled the original Market Drayton warehouse so van Mourik had to find a second location. This was in Milton Keynes and when it opened in 2001 it was Culina’s first pure third-party site. Hanbury Davies was appointed as a dedicated subcontractor which is when van Mourik’s long relationship with Glyn Davies – who is still a non-executive director of Culina – was cemented. “I knew Glyn before but that is when we started working together a lot more closely,” says van Mourik. “We repeated that model over and over again and ended up with sites in Market Drayton, Milton Keynes, Stafford, Haverhill and Bristol. We had quite a bit of spare space and I saw an opportunity to do a deal with Wincanton.” Wincanton at the time under then CEO Graeme McFaull was undisputed king of shared user chilled distribution, with turnover of £150m compared with Culina’s £7.5m. “I sat down with Graeme and proposed a joint venture, but he wasn’t interested,” says van Mourik. “So I said I was happy to buy their £76m chilled business but I didn’t want their people, trucks or warehousing and I certainly 16.12.19
Culina Group CEO Thomas van Mourik (second left) and company secretary Nigel Jury (centre) collect the Haulier of the Year trophy from Robert Grozdanovski, MD of sponsor Volvo Trucks (second right)
Just before the Wincanton deal, Culina made its first move into ambient distribution with the acquisition of Baylis Transport which became Culina Ambient. “That’s where we made a big mistake,” admits van Mourik. “We thought we knew everything about chilled distribution and an ambient business would just fall in line. We drove service, profit and morale down. It was a car crash. “So we invested in a new facility in Port Salford to take things forward, but whenever we were in a tender we ran into Great Bear, who in most cases won. They were very professional and I thought ‘I’ve got to sell the ambient business or buy Great Bear’.” Luckily the circumstances were right and van Mourik got on well with Great Bear MD David Williams. “We agreed to purchase the business and we folded our ambient business into Great Bear which had a turnover of £60m and 600 people who were transferred across,” says van Mourik. “The ailing business that was Culina Ambient turned into a positive and the rest is history.” Great Bear now turns over nearly £280m, a success story that van Mourik largely puts down to keeping the management team intact. “The one big thing I learned with Baylis was that you keep the company the way it is,” he says. “In the case of Great Bear, which has people who had given 25 years of their life building it up, you don’t dive in and say ‘we’re going to do it the Culina way’. Just let them get on with it”(see panel overleaf). In 2014 Culina took the next step in its development when it started working with Telford-based CML Fulfilment. “CML does cross-docking, storage and distribution on behalf of customers who trade with Aldi and Lidl,” says van Mourik. “Having lived in Germany I knew what those discounters are capable of in terms of market dominance and I wanted to be part of it. So I got involved in a business that was already well in with them. Over a number of years we bought the shares and now own CML 100%.” CML handles around 45,000 pallets a week but had no transport, preferring to rely on a sub-contractor, Northern Irish refrigerated specialist Morgan McLernon Transport. “We thought it was far better to do a deal with Morgan McLernon than say goodbye and put our own trucks in,” says van Mourik. “So in 2017 we did a deal with Michael McLernon where we own 75% of that business. We wanted Michael to stay and grow the business and ➜ 46 MotorTransport 45
MT Awards 2019 winner profile he then had an opportunity to take on all the Irish work we were giving to sub-contractors. So we gave all the other group work to Michael and we will carry on developing that.” Van Mourik also wanted to take on the “Spalding mafia” and get into perishable foods distribution from East Anglia where the majority of the UK’s fresh fruit, vegetables and salads are grown or imported. In 2012 he tried to buy Browns Chilled Distribution, a £35m a year business based in Bicker near Spalding, but saw it snapped up by Turners (Soham) from under his nose. “So I knew I had to be discreet and buy another business,” van Mourik says. “That was Robsons of Spalding. So albeit in a small way we are now in Spalding. It is a £17m turnover business and we have great plans to develop it. We are keeping the name and the management team in place.” That was in 2018 and, in the same year, the next food sector that van Mourik decided to get involved in was morning goods – bread, cakes and pastries. Researching the market, he came across Warrens Group, a Sidcupbased logistics firm specialising in baked goods, with 150 trucks and a turnover of £37m a year. “Warrens is the market leader, a low profile, second generation company,” he says. “They never have their name on the side of the trucks. I made contact and did a deal where we have 75% of the company. The other 25% stays with Michael Warren and we want to help him grow the business.”
Packing ’em in
The eighth and final piece in the Culina jigsaw – for now anyway – is the co-packing business which will turn over £73m this year. “That started on the back of Culina Logistics when it was still small, doing a bit of packing in the corner of a warehouse,” says van Mourik. “It wasn’t really working so we got in contact with IPS [Integrated Packing Services] in Featherstone [West Yorkshire] where they were doing co-packing, and they also had an in-house operation with Nestle in York. IPS needed cash to invest in machinery and also had to convince customers to bring product to
Featherstone for reconfiguring and then take it back into warehousing, which was extra cost. “So in 2015 I proposed a 50/50 joint venture where I put all my turnover and IPS put all its know-how and machinery in, and we grew it jointly. “After three years we had such momentum that I wanted to buy out their 50%. At that meeting we ended up buying IPS as well. So we put the two businesses together and the same management is driving it forward.” As well as Featherstone, IPS now has an operation in most of Culina’s warehouses, has a joint venture with Eddie Stobart Logistics and has a site in Dudley. Last year it bought its first co-manufacturing site Foodpack in St Helens on Merseyside. “It’s the glue that keeps everything together,” says van Mourik. “If you do warehousing and transport pretty well in a shared user environment, and overlay that with a unique co-packing or co-manufacturing solution, that customer will think twice about awarding that contract to someone else.”
A happy cobbler
While van Mourik is always looking for new opportunities to offer his clients more services and lock them into Culina, he says the company will always “stick to its shoemaking” rather than expand outside its area of expertise. “We do just about everything that goes into a supermarket except frozen – yet,” he says. “It might come, it might not – the opportunity has to be there. “We have no need to diversify beyond FMCG and food and drink – there is enough growth in the sectors in which we operate at the moment. What we have done this year is take on the distribution for Müller Milk and Ingredients, which is the old Wiseman and Dairy Crest business. We are also going to take on the tanker fleet to do the milk collection so that is another £225m turnover on top of Culina’s £650m. “Maybe we will go further up or down the supply chain as bulk ingredients would be a natural extension for us. If one of our customers wanted us to start hauling raw materials into their factory, we would have a look at it. What we won’t do is suddenly go out and buy a container business. That makes no sense.” ■
CENTRAL SERVICE, NOT CENTRAL CONTROL While the Culina group companies share central services like fleet purchasing, IT, HR, marketing and finance, the operational teams are kept separate, and allowed to run their businesses independently. This means they do not share assets such as vehicles; nevertheless the company double-shifts every truck to maximise productivity. “Across the business we cover off 70% of our transport requirement with our own fleet, with the rest going through subcontractors,” says van Mourik. “They are our flexible friends and we sweat our vehicles as much as we can. “We never have trucks standing. There is an open dialogue between the businesses so if for example a Culina truck comes into Spalding the driver will call Robsons and ask for a load out. That candy store of transport is open to all our 46 MotorTransport
businesses.” While being able to share resources is one of the advantages of being part of large group, van Mourik says each business owns its P&L and he doesn’t want any centralised control. “That ownership and entrepreneurial attitude is what we want to hold onto as much as possible,” he says. “In all the businesses we bought, the management is still in place to a large extent. If it wants to buy a company the group will provide it with the funds and the support. If it wants to develop a new IT system we will have our central IT team get involved and support that on a local level.
“We are not constantly pouring the Culina sauce all over these businesses. The biggest lesson I learned when we bought that ambient business was to try to Culinaise it – it went wrong. I have never done that since.” Van Mourik illustrated this point at a Culina management conference where he had the label on a jar of mayonnaise made into a ‘Culina sauce’ brand. “I used it to tell the story that the worst thing you can do is spread the Culina sauce all over every company because it won’t work,” he says. The MT Awards judges agreed, citing Culina’s excellent track record in managing acquisitions as one reason for making it Haulier of the Year. 16.12.19
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MT Awards 2019 winner profile Team of the Year
Big and clever Heavy haulage requires some serious planning. Winner of the team of the year, Collett & Sons, has a sense of togetherness that lightens even the heaviest of loads
C
ollett & Sons is a family firm that has become one of the UK’s leading heavy hauliers as well as retaining its conventional general haulage business. It’s an ownership model that sits well with the heavy upfront investment required in specialist kit as the payback period is a lot longer than the three to five years on more conventional vehicles. The firm started out in Sutton near Keighley, West Yorkshire in 1928 and MD David Collett is the grandson of founder Richard Collett and one of five brothers now running the business. It began by taking milk from farms to the local dairy by horse and cart and in 1962 moved to Halifax where Richard and his son – also called Richard – continued the milk collection business on behalf of the Milk Marketing Board. “In the 1970s that stopped but in the meantime they had started carrying farm produce and engineering products,” says David Collett. “My dad bought his first low loader, a secondhand Crane Fruehauf that was bent like a banana, in 1974. He must have been offered a good deal and thought ‘let’s do something different and give it a whizz’.” In 1985 the firm acquired the 2-acre former Watkinson site in Keighley and bought its first hydraulic modular low loader equipment. In 1996 the two sites were consol-
48 MotorTransport
SHOWING OFF: MD David Collett proudly shows off his MT Awards trophy, loaded on a model self-propelled modular transporter at Collett & Sons’ Goole depot
idated into 5 acres in Halifax which remains the company HQ and home to the logistics division. By 2008 the heavy haulage operation had outgrown Halifax and a 5-acre depot in Goole was purchased to give easier access to the M62. This has now been expanded to 12 acres. “With the size of trailers we now have we couldn’t get them out of Halifax without removing street furniture,” he says. “We have diversified so it is no longer just transport. As we got into bigger projects we were providing a true end-to-end service.” In 2014 the firm added a portside depot in Grangemouth equipped with a 110-tonne mobile gantry. Eric Crosby joined the firm as projects director in 2003. He says: “Ten years ago we had moved a secondhand boiler from Halifax to Ireland. Out of blue we had a call saying ‘the whole factory is going to Morocco – can you do it?’ The answer was ‘yes’ of course, so with Dave’s brother Lincoln I got in the car and went to have a look. It involved stripping the plant out, loading, packing, chartering a ship to Casablanca, discharging the ship, and delivering and installing it in the new factory. “My approach is to never say ‘no’.” Collett & Sons has increased its capacity both in terms of the size of load it can handle and the range of services it offers, with just about everything done inhouse except supplying cranes and ships which are still hired in. The general haulage fleet includes crane-equipped vehicles, which are useful for transporting the ancillary equipment needed for moving large loads. “A lot of the business we do on the heavy transport and installations requires conventional trucks for taking components for jacking and skidding, beams etc,” says Crosby. “We do everything inhouse so if it’s something that needs moving on wheels, we’re interested.” The biggest change apart from the ever-increasing size of the loads has been the amount of risk assessments and documentation that must be completed before a wheel is turned. So as well as investing in the impressive pieces of kit sitting out in the yard the firm has spent a lot of money on IT so it able to produce the 3D swept-path analysis and CAD drawings needed. “It makes me laugh when people say ‘you made that look easy’,” says Collett. “What they don’t see are the six months of planning that went in to the two days it takes to do the job.” A key growth market has been onshore wind turbines, which are getting bigger but are still transportable by road. Sadly, few are manufactured in Britain. “They have 16.12.19
Sponsored by
new-generation turbines that have been developed for road transport,” says Collett. “The UK has a chequered history in tower manufacturing. Three or four companies have gone to the wall and there is a lot of consolidation but it is still a market for the future.” But it is in the really large and heavy loads where Collett & Sons has earned its can-do reputation. “There is no limit on the weight or dimensions we can transport,” boasts Collett. “The only restriction is the infrastructure we are running on.” Crosby adds: “We have moved over 500 tonnes on the road from Sheffield to Goole. The train weight would have been over 650 tonnes.” This was made possible when, in 2014, Collett & Sons
CELEBRATE: MD David Collett, centre, and projects director Eric Crosby, second left, collect their trophy from Ian Mitchell, MD UK & Ireland, at sponsor Hiab
broke the European record for the biggest capacity load carrier when it ordered a £1.5m 550-tonne capacity girder bridge from its preferred supplier, German manufacturer Scheuerle, designed to carry transformers and generators. “We made the decision to bring something different to the market so we stood out,” says Collett. “One competitor said we were idiots as no one built a 550-tonne transformer. Within three months we had an enquiry from one of the transformer manufacturers saying ‘can you give us a price as we are going to build one that size now that you can move it’. Business is increasing as a result.” While the National Grid is managing the switch to more renewable generation, the UK’s power infrastructure is ageing at the same time. “Transformers have a shelf life and have to be replaced. National Grid has had 10 ‘supergrid’ transformers from one manufacturer this year,” adds Crosby. “And there are 12 due from another manufacturer next year.” The firm also buys German heavy haulage tractors, mainly using MAN and Mercedes-Benz rather than the Swedish brands which may offer more power but not the necessary torque convertor transmission. “When you are moving 500 tonnes it is all about starting and stopping,” says Collett. “You need the right unit at the front – we don’t necessarily need 750hp; we can do it with half of that if we have the right gear and axle ratios. It sounds nice to have a big engine but it’s the torque convertor that is key.” The self-propelled modular transporters (SPMTs) come in four or six-axle modules and can be assembled in various axle configurations to suit each load. The maximum loading per axle can be as high as 40 tonnes but the actual load is usually restricted by the weight the ground can take. “You can only go up to whatever the infrastructure will allow you to do,” says Collett. “When you plot a route from A to B if that says you can only do 16 tonnes per axle then you have to put enough axles in to spread the load.” Sometimes it takes months to find a suitable route – and very occasionally it even proves impossible. “That has just happened,” says Crosby. “It was only 15 miles from the port to the site but the route couldn’t take the weight. In the end they shipped it in two pieces to a fabrication depot where it was welded back together and we moved it at 300 tonnes to the installation site.” ■
ONE SHOT AT SUCCESS, SMASHED OUT OF THE PARK In a very strong category that was hard to call for our judges, Collett & Sons came out on top with an impressive entry describing a unique project to deliver three 169-tonne electrical transformers for the National Grid in just four weeks. The Collett team had just six months to plan and execute the moves, which involved shifting the transformers a total of 270km from ports to substations. Two moves took place from Ellesmere Port, one 107km to Stoke-on-Trent and the other 145km to Willenhall, while the third was a 20km haul from Portsmouth to Lovedean. As well as transporting the transformers, the Collett team had to arrange a 1,200-tonne mobile crane to load and unload the transformers at either end of the moves. 16.12.19
Planning involved liaising with several local authorities and police forces to minimise disruption and ensure safe passage for the 66m-long, 5.4m-wide combinations, pushed and pulled by three MAN 4-axle heavy haulage tractor units. Work started early in 2018 and included test drives of the planned routes, swept path analysis, topographical and structural surveys and media liaison. Preparing the moves saw council engineers modify sections of the route to remove obstructions such as street furniture, the ramping of splitter islands and the pruning of foliage to create the 5.2m high and 6m wide ‘tunnel’ needed to allow the combination safe passage. Parking restrictions and temporary road closures were also put in place. The judges said the project was
extremely challenging, especially as these high-profile moves had attracted a lot of publicity. One judge who had recently gained his C+E licence said he “could only imagine the effort and teamwork required to execute a project of this nature”. Another was impressed with the completeness of the service provided by Collett, while a third noted that the team had only had one shot to get it right and they had “smashed it out of the park”. Winning the award both surprised and delighted the Collett team at the ceremony in July and the trophy now sits proudly on a model SPMT in Collett’s office in Goole. “It was a great surprise and we were cock-a-hoop,” says Collett. “We are not Eddie Stobart, we don’t have thousands of trucks and what we do is pretty niche. But we are bloody good at it.” MotorTransport 49
MT Awards 2019 winner profile Apprenticeship of the Year
People first Nagel Langdons understands the value of offering top-quality training and development to new recruits, and its formal apprenticeship programme is paying dividends, for the staff and the company. But the firm’s HR director was still stunned to win an MT Award this year
I HELPING HAND: The haulage firm has taken on 188 apprentices since the launch of the Nagel Langdons National Apprenticeship Academy
50 MotorTransport
t was such a blur. We were up against some big companies… We worked hard on our entry but did not expect to win it. So when it happened we just did not really know what was going on!” So says Michael Errington, head of HR and training at Nagel Langdons, about winning the Apprenticeship of the Year award, sponsored by CBRE, at the 2019 Motor Transport Awards, which took place at the Grosvenor House Hotel in July. “The next thing I knew, I was sat down with a big award in front of me thinking: how did this happen?” It happened because of years of hard work and commitment to the Langdons National Apprenticeship Academy by the chilled and frozen transport specialist that is part of the Nagel Group. And it has the figures to back it up: 188 apprentices have been employed by Nagel Langdons in the past five years, including 27 LGV apprentices in 2018. Its apprenticeship programme has a 100% pass rate for LGV apprentices, and a 100% employment rate. The commitment from the business came not just from time and effort from employees at all levels, but from £200,000 invested in recruiting apprentices in 2018 alone. “We have been working on our apprenticeship academy since 2010, when the government was asking local companies and local schools to work together,” says Errington. “We got involved in that quite heavily. We offered schools a level 2 logistics course: that was basically to encourage students to move into the logistics industry.”
Errington, who studied HR in his university days and wrote his dissertation on recruitment, is passionate about making the right connections between businesses and prospective employees – and that can start right at the beginning. “A lot of people going through school don’t really understand what the industry does and don’t appreciate it. It is undervalued. When schools are teaching children there are obvious careers such as teachers and doctors but there isn’t much exposure to transport.”
Explaining the challenges
Finding the right school-leavers for the apprenticeship programme is crucial, he explains of the success of the programme. That means explaining that driving is a difficult job, with plenty of challenges. It is physically demanding, there are long hours and driving is a lone role – Errington believes that many younger would-be apprentices want to work in a team. Another challenge in retaining apprentices is that negative stereotypes continue to persist in some corners of the industry, which manifests in behaviour and comments that young people can find difficult to challenge. “I am particularly keen on diversity, so we are trying to encourage women to come into the sector from an apprenticeship perspective. It’s something we encourage as much as we can,” he says. Nagel Langdons works with Bristol-based training provider N-Gaged Training to provide driver apprentices. The two parties meet on a regular basis to discuss the progress and structure of the programme. This includes an annual strategic meeting that evaluates business needs, how best to maximise the Apprenticeship Levy and how to deliver the apprenticeship in the year ahead. All of this is done because having 188 people join the apprenticeship academy over the past five years has been critical to the continued success of Nagel Langdons. “You have just got to future-proof the business. Whatever that cost is, you’ve just got to accept it – because if we do not take action now, we will be on a really sticky wicket,” says Errington. “I’ve done loads of figures for the board about the age profile of the business and what that looks like. “We are not the worst, but the majority are over 45. The percentages are reduced in the early ages and we are looking to address that. We need to find a balance between experienced people and apprentices.” 16.12.19
Sponsored by
ALL SMILES: Simon Doughty (second right), business unit director at sponsor CBRE, presents the Apprenticeship of the Year trophy to Michael Errington (third left), head of HR and training at Nagel Langdons
Nagel Langdons has apprentices in its sites in Bridgwater, Dover, Luton, Peterborough, Redditch, Liverpool and Barnsley. Only Bodmin and Motherwell do not have any at the moment. But getting this level of coverage is not easy, Errington explains. “In Dover the catchment area is small and we have to work hard on apprenticeships. And we have to remember there is a shortage of drivers, not just an ageing workforce.” The business takes part in the Trailblazers scheme, which works with the government to set new standards for apprenticeships, and the format of the apprenticeship is a blend of practical and theory. “It is a standard apprenticeship,” says Errington. “They have to do English and Maths [to a minimum of GCSE grade C or equivalent] if they have not got them. Then they have to do some transport modules. There is the practical side as well as the theory side. The practical side his more based on our involvement.” It also offers training in warehousing operatives, traffic office, customer service office and team leading – as well as professional LGV driving.
Driver trainers
But it is more than just training that makes an apprentice successful. “I have a learning and development manager who has overall responsibility for the training and underneath him is a team of driver trainers who support all the apprenticeships,” explains Errington. “We start at the beginning with them as driver buddies then we work up slowly with them until they get the licence. The driver trainers will recognise when they are capable of going out on their own.” Once apprentices have completed the initial training they participate in the general induction programme and on-boarding that every employee goes through. Apprentices follow programmes of between 12 and 36 months, depending on the standard. All apprentices receive personal development in the form of on- and off-the-job training as well as mentor support to help them identify their own strengths and goals. The key for Nagel Langdons is retention. “We want to make sure that the people we bring on stay, as it is the cost of not just the apprenticeship, but of people’s time in getting them in the vehicles,” says Errington. “We want them to show some passion. We want the people who have wanted to drive a truck since they were five.” 16.12.19
The success is feeding through to the numbers: in the past 12 months, 27 LGV apprentices have joined the programme; 100% of that first cohort have achieved their apprenticeship and 90% achieved a distinction grade. “I started in recruitment years ago. I see it is such a vital element of bringing the right people into the business,” says Errington. “When you get the right people in the right role, they will stay in the business. Working towards that is a real achievement. It is also good for cost saving, because if you don’t have the right criteria you’re going to be haemorrhaging money. If you get it right, you can attract the right people, especially with the way you advertise. It isn’t rocket science, it just needs a bit of attention. “We have got a good reputation as a business to work for,” Errington adds. “We are not a massive corporate, so people are human beings, not just a number. Don’t get me wrong: we are not perfect, but then I don’t think anybody is. We do have people who leave the business, but they actually come back. They realise that the grass is not always greener. The MD, Aran Osman, is a very personable individual. He is very much about the people and getting it right, and being fair to colleagues in the business.” Osman himself concurs, saying that Nagel Langdons is immensely proud of its National Apprenticeship Academy and it is committed to recruiting more than 40 apprentices each year. “As a significant employer with operations across the country, we have always had an underlying sense of duty to offer a progressive, vocational pathway and professional development,” he says. “Apprenticeships provide a successful platform from which to provide a structured entry point into the business with the training, coaching and mentoring resources to develop skills and create the foundations for a mutually beneficial and long-lasting relationship between colleagues and employer.” Errington is targeting long-term success for the academy: “We have to continue what we are doing without letting the standards slip in any way. In total, 90% of our apprentices came out with a distinction pass. We are setting the standards high. I always want things to improve and to refine what we do. The team I have behind me are all so passionate about the industry: they really want to see it succeed. We just have to ensure we carry on doing what we are doing well.” n MotorTransport 51
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