Motor Transport 25 July 2022 by Motor Transport

Sharp ■ Informed ■ Challenging

NEWS INSIDE What a comeback

Stobart wins back Tesco deal p3

Truck decarbonisation Industry giants join forces

Strategic success

Expect doubles its profit

25.7.22

HIRECO CAN ADVANCE THE PERFORMANCE OF YOUR FLEET

OPERATORS INSIDE Culina Group ��p14 DHL �� p3 DPD �� p4 Expect Distribution �� p4 FM Conway ��p10 GC Distribution ��p12 Gregory Distribution �� p3 MKT Logistics �� p3 Menzies Distribution �� p4 Stobart �� p3 Toogood �� p4 Turners (Soham) �� p3 XPO Logistics �� p4

MIND THE GAP: A five-year trial of platooning trucks on UK roads has found that the technology is as safe as trucks running separately and fuel savings could be as much as 4.1% – but only if roads are optimised for platooning. The HelmUK trial was funded by National Highways and the DfT to test the use of advanced driver assistance systems allowing HGVs to safely travel close together to save fuel by slipstreaming. The trial involved three DAF HGVs electronically coupled to maintain a gap of 0.5 to 1 second (11.9m to 23.7m at 53mph). This compares with a gap of 1.4 seconds (33.6m at 53mph) for most standard adaptive cruise control systems and the 2 seconds recommended by the Highway Code. The actual saving seen in the HelmUK trial across all three vehicles was only 0.5%, mainly because the platoon could not be safely maintained through almost half of road junctions. If the platoon could be maintained 85%

of the time, fuel savings should rise to 1.8% and if it was kept together all of the time – which would require junctions to be optimised – savings could be over 4%. Test-track studies have shown potential fuel reductions of 7% for a lead vehicle and 16% for a following vehicle with much smaller gaps between vehicles.

Retailer snaps up logistics supplier in £230m deal to take full control of its own food supply chain

Marks and Spencer buys Gist By Chris Tindall

Marks and Spencer Group has acquired Gist, the principal contract logistics provider to M&S Food, for £230m in a move it said would accelerate its plan to modernise the food supply chain network. The British retailer said it spied substantial opportunities to create a more efficient supply chain and could reduce costs, update legacy systems and improve automation. Gist has worked with M&S for decades, as well as providing logistics services for third parties and freight forwarding work for BOC. In 2009, it signed a major contract with M&S securing all foods operations and since then it has been providing the majority of M&S Food logistics services via its network of eight primary and 10 secondary distribution depots across the UK and Ireland. However, the retailer said the existing arrangement had a higher cost legacy contract that was due to expire in five years’ time and so

this acquisition would provide immediate benefits with the elimination of contractual fees and costs. M&S added that it could now take control of the network, make investments in it and build on the supply chain optimisation programme Vangarde. The deal involves M&S buying Gist’s entire share capital for an initial cash consideration of £145m. A further cash sum of £85m plus interest will be payable from the proceeds of the onward disposal of freehold properties, or at the latest on the third anniversary of completion of the acquisition. It added an additional profit

share from the disposal proceeds of up to £25m would be payable under certain conditions and that if it wished, M&S could retain the freehold properties, in which case £110m plus interest will be payable. Stuart Machin, M&S chief executive, said: “M&S has been tied to a higher cost legacy contract, limiting both our incentive to invest and our growth. “The last two years have shown what can be achieved by working collaboratively alongside our partners at Gist. This has given me confidence that now is the time to take action and remove an impediment to our growth. “We have therefore acted decisively to acquire Gist, taking control of our food supply chain for the first time in our history.” Machin added: “This is the first step in a multi-year plan which will transform the entire supply chain.” Gist generated a pro forma EBITDA of around £55m in the year ending 31 December 2021, with the majority of profit reflect-

ing management fees recharged to M&S under contractual arrangements which will now be eliminated upon the consolidation. The deal was announced as Associated British Foods said it had poached Marks and Spencer Group’s chief financial officer, Eoin Tonge, to be its finance director. He will start no later than February 2023.

...by up to 75%

0330 124 5651 info@hireco.co.uk hireco.co.uk

Viewpoint: Platooning trials / IR35 regime p6 Training: Are driver apprenticeships working? p8 Profile: Culina Group looks to grow p14

News

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MKT Logistics delighted to join Turners (Soham) family Turners (Soham) has acquired a 100% shareholding in MKT Logistics. The deal includes all subsidiary companies – Matthew Kibble Transport, Shakespeare Transport and Fullforce Logistics. MKT Logistics runs a fleet of approximately 90 trucks and operates in both the Pallet-Track and Palletforce networks. Matthew Kibble Transport is a shareholder member of Pallet-

Track and Shakespeare Transport and Fullforce Logistics are Palletforce members. Turners MD Paul Day said the company would continue to grow through acquisitions and would not rule out further moves under MKT Logistics if they were a strategic fit. “We only purchase well run transport companies and MKT Logistics fits into that category," he said.

Added Matthew Kibble, former owner of MKT Logistics: “I shall be there for a minimum of five years, hopefully longer. “I have always wanted MKT Logistics to become part of something bigger and I think working with Paul is going to be fun. I have known him for 14 years since we shared Haulier of the Year 2008. I know my business couldn’t have gone to a better home.”

Stobart wins back ‘lost’ Tesco deal By Chris Tindall

Stobart has been awarded a contract by Tesco for transport services at the supermarket giant’s Doncaster and Goole distribution centres, just over a year after it lost the work to DHL. A Stobart spokesman said:

“Stobart had previously operated the transport services for both sites for over 10 years, before transferring the services to DHL 15 months ago. Our teams have a wealth of knowledge of the operations, and we look forward to welcoming back our ex-colleagues

and meeting our new colleagues that will be transferring from DHL to Stobart.” A DHL Supply Chain spokeswoman added: “Affected staff have been informed of the situation and will shortly enter into consultation with the company to discuss their options, including transferring to the new provider under TUPE regulations. “Both Tesco and DHL thank staff for their continued support and their commitment throughout the partnership.” One driver working on the contract said: “This is fantastic news and I couldn’t be happier as I am sure things will very soon go back to how they were.”

Photo: Shutterstock

Supermarket returns to former partner after 15-month switch to DHL

E-COMMERCE INVESTMENT: DHL is set to invest £482m across its UK e-commerce operation DHL Parcel UK. The investment follows a 40% volume uplift since the start of 2020 and soaring demand for its e-commerce and B2B services, it said. An initial £64m will be invested in upgrading the company’s fleet, with a major focus on alternative fuel vehicles. The fleet investment includes six fully electric 18-tonne trucks, 30 bioLNG trucks, and 18 electric tugs. The lion’s share of the investment will be in a brand new 25,000sq m hub in SEGRO Park Coventry Gateway, south of Coventry Airport. The business will also invest over £190m to create 10 new collection and delivery depots across the UK, while 20 more existing sites will be expanded.

Hexagon Leasing nabs Ryder trio

Gregory sees 2021 profit flatline

Hexagon Leasing has poached three staff members from Ryder to support its future strategic development plans. David Hodgkinson (pictured centre) joins as head of sales and takes responsibility for widening Hexagon’s truck portfolio having previously worked at Ryder for 18 years. Michael Webb (left) takes up the role of head of national accounts after 20 years as contracts manager and national accounts manager at Ryder. Meanwhile, Dave Karmock (right) joins the business as fleet engineer and will ensure the repair and maintenance network runs efficiently, as well as providing support to the national account and sales functions. He worked at Ryder for a decade in various roles.

Gregory Distribution Holdings saw a “turbulent” year in 2021 as it battled the impact of the driver crisis and wage inflation, which hit the profitability of its pallet network operations. During the year the group added Pollock Holdings and its subsidiaries Pollock (Scotrans) and Pollock Express to its Scottish stable, which includes ARR Craib Transport and a joint venture with Hayton Coulthard. The group’s pre-tax profit remained static at £11m in the year to 2 October 2021, despite its turnover rising to £273.4m (2020: £238.3m). Gregory Distribution saw turnover rise to £215.5m (2020: £195m)

25.7.22

while pre-tax profit fell to £9.3m (2020: £10.5m). ARR Craib Transport also saw a fall in turnover, down from £44m in 2020 to £43.1m in 2021. However its pre-tax profit more than doubled to £840,000 (2020: £378,000). Pollock Holdings contributed £16.4m in turnover and £392,000 in profit after tax between the acquisition and the balance sheet date.

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News

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Developing charging infrastructure among priorities for big-name firms

Haulage giants unite in net-zero HGV project By Chris Tindall

Some of the biggest hauliers and shippers, including Stobart, XPO and Tesco, have formed an action group to accelerate the decarbonisation of HGVs. The HGVzero taskforce aims to develop solutions that will tackle what it described as “complex pinch points”, which so far have hindered widespread, low-carbon truck roll-outs. The group, which also includes Coca-Cola European Partners and DPDgroup, said it will support charging infrastructure take-up and seek to break down infrastructure barriers, as well as create a roadmap for viable HGV projects. XPO Logistics described lorry decarbonisation as a “systemic

critical challenge” that the industry needed to address innovatively: “That’s why we are particularly excited to be working with a diverse group of organisations, including our haulage peers and global shippers, to develop joint solutions that will further accelerate the sustainability of HGV transport,” said Dr Nicholas Head, XPO environmental and sustainability lead. Olly Craughan, head of sustainability at DPDgroup, said: “As part of HGVzero, we want to build on the good work DPD has already completed through working with other leading organisations to embrace new technologies and deploy more sustainable delivery options at speed.”

CRITICAL CHALLENGE: XPO environmental and sustainability lead Dr Nicholas Head

Things go bad for struggling Toogood South West haulier Toogood International Transport and Agricultural Services has collapsed into administration and ceased trading. Advisory firm Mazars said the haulier, based in Pucklechurch, Bristol, had been struck by a range of problems, including Brexit and Covid-19. However, more recently it was faced with a loss of international freight work, the ongoing driver shortage and then substantial increases in fuel prices. Family- owned Toogood operated a substantial warehousing and off ice facility in the South West and it was recently the primary shirt and club sponsor of the Bristol Bears Rugby Club. Mark Boughey, administrator at Mazars LLP said: “We are working closely with the company and its key stakeholders, and it is hoped a buyer will be found for part or all of the business.”

Expect doubles profit in ‘year of success’ Bradford-based Expect Distribution more than doubled its pre-tax profit in 2021, with “significant” new contract wins contributing to growth, according to its latest annual results. The news comes in the same month that new MD Matthew Kilner (pictured) and operations director Andy Taylor officially take over from founding chairman Robert Rushworth and former MD Neil Rushworth, following a management buyout earlier this year. Figures for the year to 30 November 2021 reveal that the company delivered £40.6m in turnover (2020: £32.8m) and a pre-tax profit of £7.5m (2020: £3m).

During the year, Expect stuck to its strategy of focusing on the contract logistics and warehousing divisions, which saw it land “significant new contract wins”, with contracted business continuing to be the company’s “significant growth area”, the strategic report to the results noted. It added: “In a year of difficult trading conditions to retain a net profit margin of 9% year on year is deemed a success by the board. “The company’s strategy is to continue to focus on long-term partnerships with new and existing customers, while investing heavily in the workforce that enables our day-to-day success.”

Menzies builds buy-up war chest FORS ready for digital switch Menzies Distribution said it is open to more acquisition opportunities as it continues to diversify its portfolio, aided by a leap in profit in 2021, a debt refinancing and the buy-out of its defined benefit pension scheme. Revealing its results for the 53 weeks to 1 January 2022, the company reported that revenue increased by £20m in the year, to £943.6m, whilst pre-tax profit came in at £11.1m (2020: £6.6m). The company clinched a number of contract renewals throughout the year which have 4 MotorTransport

secured 92% of its annual revenue for 2022 and 2023. The company also refinanced its debt through the Royal Bank of Scotland, extending its revolving credit facility from £25m to £39m to help pay for the debt incurred buying Bibby Distribution Services, now known as Menzies Distribution Solutions, in December 2020. Net debt was reduced to £5.8m (2020: £11.5m). Menzies Distribution also sold its pension scheme to a third-party provider and bought JBT Distribution, which boasts annual sales of over £23m.

FORS has announced the launch of a ‘digital transformation’ programme as it works with members towards ‘a safe and sustainable future’. Speaking at the body’s fifth annual conference at the Manchester Central Convention Complex, concession director Ian Henderson pledged to review the audit and training process and re-engage with operators through improved online data access. A newly developed website is due to go live by the end of March 2023. The new team has spent the last six months developing a strategy based on what Henderson labelled “the four Rs – recruitment, recognition, retention and re-engagement”. “The overarching concern of operators is how they can interact with the data they need to access,” he explained. “We are looking at the future of audit and training.” 25.7.22

Viewpoint

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Platooning is worth the fight T he results of a five-year trial of platooning trucks seem disappointing – on average the three vehicles reduced fuel consumption by only 0.5%. On the face of it, that would spell the end Steve Hobson of platooning – some truck manufacturers Editor turned their back on the concept years ago. Motor And with the impending arrival of Transport zero-tailpipe-emission battery electric trucks what is the point of developing a technology designed to save fuel? The reason platooning is worth sticking with is that in test track trials, with much smaller gaps between vehicles, fuel savings were as much as 16% for vehicles in the platoon. Until we get batteries made of unobtainium that can deliver as much payload and range as a diesel truck then a 16% gain in either of these factors would be

very useful. It might sound like science fiction but it isn’t that hard to imagine platoons of three, four or five driverless electric trailers led by a single mannedcabbed truck driving up the inside lane of the M1 or M6 at night in a dedicated lane – possibly the hard shoulder closed to other traffic. Linked by 5G high-speed mobile communications these platoons would be very close coupled and could collect and drop trailers at specific junctions to either continue to a nearby DC autonomously or be collected by a driver for more complex last mile journeys. The zero-carbon world we have signed up to is going to look very different from today’s and just doing things the way we always have but with big batteries instead of diesel tanks isn’t going to cut the mustard.

Attracting drivers in the ‘Wild West’ T Sue Ollerenshaw Director, Efficient Employment Tax Solutions

he extension of the Off Payroll Working rules (IR35) in 2021 should have levelled the playing field. Businesses that want to comply and look after their drivers offering the security and benefits of employment should no longer be competitively disadvantaged. Has it worked? Initially there was a blanket ban on the use of limited company drivers by many large businesses. But in the run-up to the Christmas peak, we saw drivers continuing to operate through their own limited company, outside IR35, hiring themselves out to the highest bidder. We saw end-users requiring indemnities to protect themselves against HMRC claims that they had not taken “reasonable care” when issuing outside IR35 determinations. We also saw some large businesses setting up new companies to take advantage of the small company’s exemption. More recently we have seen an FCSA accredited umbrella company lose to HMRC with a liability estimated to be in the region of £11m. While this case is likely to be appealed, they lost on the basis that they were not an employer when an employee was not on an assignment. Being self-employed is great until you are sick, injured or you receive that large, unexpected tax bill. Sadly, few drivers understand their obligations and risks and what they may be missing. It wasn’t that long ago that drivers were accepting an extra £1 per hour to operate through their

6 MotorTransport

own companies. While hourly rates have significantly increased, I suspect that few drivers will have spoken to their accountants to check whether they are better off overall. There are many benefits to all parties in the supply chain to a more stable workforce. Everyone has certainty on hours, costs, risks, and rewards. While drivers’ weekly take-home pay may go down, they will receive holiday pay, sick pay, and pension contribution. The end hirer knows that the drivers will have the correct paperwork and skills and are receiving the proper training. They know this will be true if another driver is sent due to sickness, etc. Businesses using a stable workforce can benefit by rewarding their current employees and developing the drivers of the future. Remember – if a deal sounds too good to be true, it is likely to be tax avoidance. Directors can be personally liable for compliance failures within the supply chain. Let’s hope that the “good guys” win for the benefit of the industry and the “baddies” are brought to justice by the sheriffs, whether this be HMRC or the Traffic Commissioner.

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To contact us: Tel: 020 8912 +4 digits or email: name.surname@roadtransport.com Editor Steve Hobson 2161 Head of content Tim Wallace 2158 Events and projects editor Hayley Tayler 2165 Group production manager Isabel Burton Senior display sales executive Barnaby Goodman-Smith 2128 Event sales Tim George 0755 7677758 Classified and recruitment advertising rtmclassified@roadtransport.com Sales director Emma Rowland 07780 604075 Divisional director Vic Bunby 2121 MT Awards Katy Moyle 2152 Managing director Andy Salter 2171 Editorial office Road Transport Media, First Floor, Chancery House, St Nicholas Way, Sutton, Surrey SM1 1JB 020 8912 2170 Free copies MT is available free to specified licensed operators under the publisher’s terms of control. For details, email mtsccqueries@roadtransport.com, or call 01772 426705 Subscriptions Email:customercare@dvvsubs.com Quadrant Subscription Services, Rockwood House, Perrymount Road, Haywards Heath, West Sussex RH16 3DH Rates UK £146/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 © 2022 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 25.7.22

Training

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Learner drivers stuck in traffic The driver crisis may have eased but the industry is still failing to come to a consensus on the best way to approach driver training, reports Louise Cole ADRIAN GROVE: “The 16-week process is more like six to nine months”

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he industry currently has two Trailblazer apprenticeships – one for urban driving and one for Category C+E – which are eligible for Apprenticeship Levy funding. Numbers are picking up, but the industry is still very fragmented in its approach to driver training. Recently the government offered 11,000 funded HGV driver bootcamp places as a rapid solution to the driver shortage. Unfortunately, although the scheme is hugely oversubscribed with potential candidates, training providers say lack of government-provided resource is slowing them down. This no doubt accounts for the Department for Education’s (DfE’s) lack of data regarding bootcamp successes, even though the figures are presumably being collected. Qube Learning offers many kinds of driver training, including using Trailblazer apprenticeships. It has

received bootcamp funding for 800 candidates, but has so far managed to qualify only eight, mainly because of hold-ups in testing. Adrian Grove, business development director, says: “Fundamentally, the bootcamp concept is good, but it isn’t delivering a quick solution to the industry as we hoped. The 16-week process is more like six to nine months now.” As a result, the DfE has extended the completion deadline for the first round of funding again, to March 2023. Qube completed all the necessary theory with its candidates in 10 weeks. However, it has experienced delays in getting licences back from DVLA, and test slots can have a four-month wait, depending upon the region. Qube narrowed its huge candidate pool by chronology of application, regional demand and a realistic commitment to joining the industry. However, where the employment demand is greatest, testing capacity is also under greatest strain. A portion of DVSA examiners and private sector driver trainers shifted back to driving during the most acute phase of the shortage, leaving test centres and training providers undermanned. ➜ 10 25.7.22

Training

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FM CONWAY FM Conway currently has a target for 40 LGV driver apprenticeships. “We should use apprenticeships to train drivers, because it is a trade,” says IMS and road safety manager Dave Conway. “It isn’t something you can learn in a classroom. There is more to being an HGV driver than driving a lorry.” Conway says accessing funds is often a Catch-22 for hauliers. “We self-fund our in-house training, which we can afford as a major firm,” he says. “However, our size also means we can leverage public funding better than a small haulier. It’s an onerous business and the mechanisms for getting your hands on that money require resource.” Continuous training is also important. FM Conway puts substantial effort into training in order to manage road risk. For several years, the entire FM Conway fleet was FORS accredited, but when it hit a plateau in risk reduction, it investigated. “FORS required two e-learning sessions per year per driver,” Conway says. “We discovered that drivers were doing the same one repeatedly, faster each time and therefore no longer improving.” He says the fleet had grown, but the training methodology hadn’t changed accordingly. As a result, FM Conway instituted its own 20-minute driver profiling online test, which every driver in the company must take annually. It tests technical knowledge, hazard perception, and attitude to safety. The system will then allocate two modules for the driver to complete, plus additional material to address specific shortcomings. The company also uses a virtual-reality safer urban driving course, which it sponsored through development with the provision of trucks, drivers and knowledge. A small portion of the fleet is FORS accredited. In addition, drivers undertake the cycle safety course, which provides seven of the 35 hours required every five years for the Driver CPC. Conway says the company’s risk score has continued to drop, and its training is an integral part of its commitment to continuous road safety improvement under ISO 39001.

RECRUITMENT DRIVE: The government scheme attracted plenty of applicants, but some training firms say they haven’t been given enough resources

Grove says that training providers won’t even book candidates in for practical training until a test date is confirmed. The delays also create a disconnect between candidates and prospective employers. Of Qube’s bootcamp quota, 80% is Category C+E and the remainder Category C, based on the volume of vacancies employers reported at the start of the process. “The volume of drivers needed has been blown out of the water by the delays,” Grove says, adding that compa-

“In our first year of implementing 39001, we cut collisions by one-third,” he says. The company’s next focus is to professionalise its van users. “We don’t employ van drivers. We employ HGV drivers and also employ professionals who happen to use vans,” Conway says. “We are now trying to change the culture regarding road risk and van use, to tackle the road risk it represents head on.” The right initial training and continuous professional development may be essential to the recruitment of drivers, Conway says, but the industry must change as well. “People don’t want a rubbish job,” he says. “The working conditions and the facilities available to HGV drivers are too often terrible.” He adds that logistics will neither keep new drivers, nor attract more female drivers, until these issues are fixed. Sally Gilson, the RHA’s policy manager for skills, made the same point at the recent Road Transport Expo. With record employment levels and huge sectoral competition, logistics must not only meet the expectations of millennials in terms of working conditions, she said, but also be prepared to invest in their training and careers. This fits with the Driver Require think-tank finding from the fourth quarter of 2021 that although a high proportion of new entrants to the industry were under 30, there was 67% churn in this age group, suggesting they do not want to stay. However, the poor uptake of levy money suggests the industry as a whole is still reluctant to invest in non-mandated training. RTITB MD Laura Nelson says small operators can lack resources “to provide the necessary level of coaching and mentoring that an apprentice in the workplace needs for a 12-month period”. However, apprentices are commonplace in the construction sector, even supported by selfemployed electricians, joiners and plumbers. If the industry wants a healthy and replenished workforce, it may have to copy that mindset.

nies that were keen to take on candidates in March 2022 may not have the same requirement six months later. “We will reallocate candidates to other employers as needed,” he says. “Our KPIs require all these candidates to find work.” Furthermore, the company voluntarily texts former students three months later to check they are still in employment – although it isn’t possible to contact everyone. The slow progress of the bootcamps means that apprenticeships – although beset by the same test constraints – are no longer significantly longer than the government’s ‘quick fix’ bootcamps. Industry veteran Jim French, MD of Road to Logistics and co-chair of the transport and logistics Trailblazer Group, has worked tirelessly to get appropriate standards and funding approved for each course. The group first had to prove that the two jobs – urban driving and trunking – had fundamentally different skillsets.

Money matters

It then had multiple reviews to address funding, as the urban driving course was originally offered less money than the first apprentice model. It now attracts £5,000 in funding; the C+E attracts £7,000. In 2021, the Trailblazer Group instituted a new C+E qualification, the urban driving apprenticeship and a transport and warehouse operations supervisor apprenticeship, which allows the candidate to specialise in warehousing or transport ➜ 12 10 MotorTransport

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Training

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GC DISTRIBUTION The development of viable and universal models for training is made especially urgent by the driver shortage. Graham Paine, MD of Essex-based GC Distribution, says his company currently enjoys a full complement of fully trained in-house drivers for the first time in years. It has not been easy to achieve, however. In the past year he has given multiple increases to every driver and warehouse

JIM FRENCH: “Bootcamps aren’t going to be around for ever”

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worker of between 13% and 18%, in order to boost retention. GCD’s culture plays to its advantage, with all six of the drivers who sought greener grass during the 2021 shortage returning. Paine believes this is because the firm looks after its drivers and ensures they have new, well-maintained vehicles. However, its recruitment and training attempts were often thwarted. “We were going to hire van drivers and

for later modules. The transport modules include the transport manager CPC. Although apprenticeship numbers are collated, it is difficult to tease meaningful data from the government’s spreadsheets, French says. The more recent data covers overall numbers and demographics, rather than sectoral information. On one hand, French says, the industry can be frustrated by the sacrosanct rules of apprenticeships – a minimum 12 months’ duration and 20% off-the-job training – as HGV licence acquisition can take just two weeks. On the other hand, “operators don’t want drivers with 10 days’ training and no experience”, he says. He believes the bootcamp courses are sound in principle, and very similar to the Road to Logistics course. The idea of quick fixes and shortcuts may yet prove a distraction from developing an industry-wide culture and approach to investing in long-term training and development. French says some operators have reduced their apprenticeship numbers to use the bootcamp instead. “I believe that for operators who want to grow and refresh their workforce in the long term, apprenticeships are still the best way,” he says. “Bootcamps aren’t going to be around for ever.” Government schemes and grants can disappear or change swiftly, as with the Kickstart scheme. Given a change in government leadership, and overstretched

train them up to Class 2,” he says. “However, there were no vans available.” GDC has trained up Category C drivers to C+E, uses apprenticeships where appropriate and is prepared to take on newly qualified drivers, despite the substantially increased insurance excess. However, the unspoken problem, Paine says, is that the recruitment issues don’t affect only drivers – the company also has problems hiring or keeping clerical staff.

public finances, it is possible that a second round of bootcamps will never take place. RTITB MD Laura Nelson says that the frameworks themselves are sound, but the funding mechanisms need simplifying. “The system for registering apprentices, and accessing apprenticeship funding/levy funds is onerous and complicated,” she says. “Smaller businesses would likely find it very difficult to navigate the systems. The support provided by the operator of the system [the Education and Skills Funding Agency] is not sufficient to overcome the challenges it presents.”

Levy losses

By the end of June 2021 the logistics industry had paid £630m into the Apprenticeship Levy, and it adds a further £150m a year. It has drawn down a fraction of this. Motor Transport has an open FOI request to HMRC, asking for more recent figures. There are only two routes for reclaiming this money – to transfer it or to train apprentices. Currently there is nothing in law that allows the transferral of these funds to other forms of training, although this is something the all-party parliamentary group for road freight and logistics has suggested. The levy was intended to support the government’s ambition to have three million new apprenticeship starts between 2015 and 2020. As of the second quarter of the 2021/22 academic year, there have been 2.7 million. ■ 25.7.22

Profile: Culina Group

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Consolidating its gains

It has been a year since Culina Group acquired GreenWhiteStar Acquisitions and Culina CEO Thomas van Mourik (above) has big plans for what is now the UK’s secondlargest contract logistics operator, as Steve Hobson reports

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ulina Group announced its takeover of GreenWhiteStar Acquisitions (GWSA) on 1 July 2021, a deal that brought Eddie Stobart, Eddie Stobart Europe, iForce, The Pallet Network and The Logistics People into the Culina Group fold. GWSA’s 20% holding in courier Speedy Freight was sold to a management buyout as part of the acquisition. With an overall turnover of more than £2.2bn, a combined workforce of around 22,000 staff at peak, 20 million sq ft of warehousing and a joint fleet of more than 5,500 vehicles, the move “significantly strengthened” Culina Group’s market-leading position in the FMCG logistics sector. In line with Culina Group CEO Thomas van Mourik’s policy of retaining the senior management of his acquisitions, William Stobart joined the Culina Group board as deputy CEO. Despite the size of the GWSA acquisition, van Mourik firmly refutes the suggestion that it was in effect a reverse takeover. “It definitely was not a reverse takeover,” he says. “This year we will do £2.2bn turnover and at the time of the purchase GWSA had a turnover of £870m. We were the larger party, but obviously it is a significant acquisition.” Despite GWSA’s accounts for the year to 30 November 2020 showing it made a pre-tax loss of £15m – down from £224.2m the previous year – van Mourik also insists that Stobart is profitable. “It was part of what was called in those days Eddie Stobart Logistics, which was an offshoot from Stobart Group,” he says. “When DBAY came in to rescue it, it became part of the Development Group, which also held other loss-making businesses. But GWSA made a profit.

“It will be a big contributor to Culina Group profit this year. We are a very profitable business and all of our 17 operating companies do very well. “We are now a year in and it feels even better than it did a year ago. “When William came back together with a team he brought in, he decided it was important to own the name, and he did a good job as timing was of the essence,” adds van Mourik. “So he bought the Stobart name from Stobart Group, which meant Stobart Group had to rename itself as Esken. When we did the deal back in January 2021 we decided we would carry on with the name Stobart but evolve the brand image.”

End of an era

This means an end to the famous green and red Stobart trucks, each with its own name, as going forward the whole Culina Group fleet of 5,500 trucks and 12,000 trailers will be owned and managed by Culina Asset Management on behalf of all companies in the group. While the trucks will be mainly white with the Culina ‘cog’ logo, individual company liveries will be retained on the trailers alongside Culina branding. The Stobart strapline ‘Delivering Sustainable Distribution’ has been changed by van Mourik to ‘Delivering Sustainable Solutions’. “If an operating company needs a truck next year it will be white with ‘Culina Group’ branding and it will be in a particular spec,” says van Mourik. “If we have a low-mileage unit in one company we can move it out to another business.” The Stobart fleet is set to increase as Culina Group reshapes its ambient distribution business. “Stobart is a transport business with some ➜ 16 25.7.22

Profile: Culina Group

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warehousing and Great Bear is a warehousing business with some transport,” says van Mourik. “This year we will start moving the warehousing into Great Bear and quite a lot of the transport into Stobart.” Stobart has traditionally been a big buyer of Scania and Volvo in partnership with AW Jenkinson, and while this will continue, DAF will also be getting a large slice of the order book. “Scania is our biggest supplier through the consortium. We have committed quite heavily to DAF, and then there will be Volvo and Mercedes,” says van Mourik. “Scania is still number one by far.” As a dyed-in-the-wool haulier, Stobart has been put in charge of Culina Group’s asset management company and he is the ‘brand image man’ for the whole group. “He controls the fleet, he buys it and specs it up – that is his forte,” says van Mourik. “William and I complement each other and it was very important to make him my deputy because he carries such a weight within Stobart. I would not have bought the business if William and his team had not signed up to come to Culina Group.” One thing that has changed under Culina Group ownership is Eddie Stobart’s reputation for buying volume by offering rock-bottom rates. “Stobart makes good money so whatever happened in the past is in the past,” says van Mourik. “We are not buying business now. It is not the Culina Group way and we have a very strict governance policy. If an operating company gets a new contract, that will need to go through certain layers and there is always a safeguard there.”

Autonomous management

While the trucks will be owned centrally, each operating company still manages its allocated fleet. With the recent acquisition of Scottish temperature-controlled operator Robert Burns, van Mourik says the chilled “jigsaw puzzle” is now almost complete with maybe “one or two” more acquisitions still to come to finish it. “Every company still plans their own trucks,” says van Mourik. “But take the chilled division – Culina Logistics, Fowler Welch, CML, Morgan McLernon, MMID and Robbie Burns – they will start to work with each other. “First rule is you fill up your own trucks, but that is only the tip of the iceberg and there is a massive opportunity underneath. We are developing an IT platform on which all those companies will interchange with each other. We are doing something similar on the ambient side with Stobart, Great Bear and Warrens. “Once that is done we will bring it all together on one common platform. That is purely to optimise our business. “What this will mean in practice is that each depot will service its own customers, but if a spike in volumes means that a site is short of capacity it will get help from a ‘tramper fleet’ of centrally owned vehicles that will

TIME FOR CHANGE: Stobart branding goes on the tractive units but stays on the trailers

roam around the estate sweeping things up,” explains van Mourik. “That expertise sits with Stobart, not Culina. We will have 800 vehicles that are not depot-based and we can put them anywhere we want.” The chilled companies already tend to double-shift their trucks because they are working with customers 24/7 on short lead times, but this doesn’t currently apply to the ambient operation. “It is a mix and there is no one rule in transport that fits everything,” says van Mourik. “One of the mistakes I made – and I learned a lot from it – is when we brought Baylis [in 2010] into Culina Group, I let the chilled boys run Baylis – and they ran it into the ground. It was only when we bought Great Bear [in 2016] and I could take what was by then Culina Ambient out of Culina and give it to Great Bear that we rescued what was Baylis. It is horses for courses.” Central ownership of the trucks will not mean however that they will all be the same vanilla 6x2 400hp spec, and there will be an element of 4x2 tractors for supermarket deliveries and specialist milk collection tankers. “Where can standardise, we will,” says van Mourik. “When it comes to trailers we will go for a certain format.” While GWSA got out of the same-day courier market when it sold its stake in Speedy Freight, Culina Group is still in the e-commerce market via B2C e-fulfilment specialist iForce. Based in Corby, iForce services clients including John Lewis and Aldi from an 865,000sq ft fulfilment centre that will soon be upgraded with more automation to cope with booming demand. “iForce is growing like a mushroom,” says van Mourik. “Altogether it has over 2 million sq ft of warehousing. “What we haven’t got is a home delivery service – yet. That might change – wait and see. “The Speedy Freight management wanted to go on their own so we sold our 20% back to them. We don’t like minority shareholdings.”

Economies of scale

With the GWSA deal and the split of XPO and GXO, Culina Group is now second only to DHL Supply Chain in UK contract logistics. So how will van Mourik get the benefits of economy of scale without damaging service levels? “Customers will still deal with Great Bear, Stobart, or any of the other businesses in the group who have retained their identities,” he says. “Probably one of the biggest mistakes I could make is turning it all into Culina. Look at what GXO is doing with Clipper. They had a brand ➜ 18 16 MotorTransport

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Profile: Culina Group

motortransport.co.uk

name and that is all going. I wouldn’t have done that.” Van Mourik has no plans to sell off The Pallet Network, which provides a route for shipments that are too small to be handled by the Culina Group ambient networks. “It is an element of turnover that we can only get with a pallet network, but it is also an opportunity for us in Great Bear and Stobart to have part of our volume which we might struggle with distributed through a pallet network,” he says. “That would be small consignments that have to go via a central hub. Small is between two

and five pallets, but it also depends on where the pallets are going, and if they don’t fit into our routes, then we give it to the pallet network.” While van Mourik has built a sizeable empire of 17 companies employing 22,000 people at peak, he is less convinced by the EmergeVest model, which acquired such notable operators as CM Downton. This has now been renamed EV Downton and made a pre-tax loss of £3.7m in the year to 31 December 2020, compared with a profit of £2.2m the previous year. “It is all about leadership,” he says. “Downton was a good business and I wish I had had the opportunity to buy it. But it didn’t even hit the market, it went straight to EV. With the [Downton] brothers going home the culture, the passion and everything went too. “Changing the management like a revolving door means you have no consistency, no track record and no leadership. In our business, I’ve been here a long time and so has most of the management. That’s the secret.” To keep up with the business’s insatiable appetite for HGV drivers Culina Group has developed a driver academy that will take in people without an HGV licence, train them and put them through their test. “We are taking people both externally and from within Culina Group in various locations around the UK and putting them through their test and into our trucks,” van Mourik says. “We are also taking on a lot of apprentices, putting them under the wing of a mentor, and moving them around different parts of the business. Hopefully they will then stay with us. “The best example of an ex-apprentice in the group is Dave Pickering, who is CEO of Stobart. He joined Stobart at 16 – I can’t think of anything better than that.” ■

MULTIMODAL WILL SEE CULINA GROUP GROW ON THE CONTINENT OF EUROPE In February, Culina Group established a new division, Stobart Multimodal, which it said would address the pressure being exerted on its customers’ supply chains and limit disruption. “Rail sits under the ports division, which is not as well developed as other parts of the Stobart business,” says van Mourik. “We have now very clearly set our stall out to develop the container and rail business in the coming years. “We are working very hard to maximise that opportunity within our network. We have 20 million sq ft of warehousing and six months ago we were not bothered about who was bringing the work into our network. We are now interested and we have done an exercise that found that more than 100,000 loads per year come from Europe to end up in our warehouses. “We have now set up a multimodal business and that is solely there to make the connection between what is produced on the continent and what ends up in our warehousing. It could be accompanied, unaccompanied or containers.” Van Mourik supports Andrew Malcolm’s campaign to allow trucks to run at 48 tonnes with 48 miles of rail terminals to boost multimodal freight. “I would love to run heavier,” he says. “But have you seen the state of the roads?” While Stobart has invested heavily at the rail freight terminal in Daventry, Stobart Multimodal is opening a new facility in Felixstowe and is looking at establishing locations in mainland Europe. Culina Group is of course owned by Müller, though it was originally created to handle UK distribution for the German dairy giant. “With Stobart Europe we have a commitment to the European market,” says van Mourik. “There are a couple more things to do in the UK and then it’s over. So in small steps we need to expand in Europe, starting with the parts close to the UK, possibly Benelux or Germany. “We already have a Culina in Germany with 75 trucks, so maybe that could be the base. It makes sense to bring that into Culina Group, add a couple of depots and build up from there.” Despite the fact that the bulk of UK imports by road are carried 18 MotorTransport

on foreign trucks, van Mourik now sees an opportunity to run UK vehicles on the continent. The imbalance between the UK’s imports and exports, restrictions on the time they can spend in the UK, plus customs delays created by Brexit, now mean Eastern European hauliers are getting more reluctant to run to the UK. “After eight weeks, foreign hauliers need to go back to Bulgaria or wherever, so there is now a place for British hauliers to go across, pick up a job and bring it back to the UK,” he says. “Those prices are now interesting enough to do that. I see that as an advantage of Brexit.”

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