Motor Transport 25 February 2019

Sharp ■ Informed ■ Challenging

25.2.19

INNOVATION. EFFICIENCY. RELIABILITY.

EU policy-makers to agree strict CO2-reduction targets

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NEWS INSIDE Japanese blow

Honda closure could affect distribution firms p3

Drivers transfer

Wincanton welcomes ESL drivers under TUPE p4

Double-trailer combo Denby still pushing DfT for Eco-Link trial

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Woods enters administration

Woods (Haulage), the Birmingham transport company that parted ways with The Pallet Network (TPN) in December, has gone into administration.

Insolvency practitioners from Duff & Phelps were appointed to the Coleshill haulier earlier this month.

The company has a licence authorising a total of 54 HGVs and 50 trailers out of three operating centres in Birmingham and Nuneaton.

Woods (Haulage) has traded as Woodall Group since 1942 when it was founded by Jack Woodall, transporting Hercules Bicycles followed by a long standing relationship with Dunlop Tyres.

Neither Woods (Haulage) nor the administrator were available for comment as MT went to press.

Focus:

Urban

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EU law-makers have reached a provisional agreement forcing truck makers to slash CO2 emissions of new trucks by nearly a third by 2030.

Agreed targets require a CO2 reduction from new lorries of 15% by 2025 and 30% by 2030, with a review set for 2022 to ensure the latter target takes into account latest technology.

It will be the first time a European standard for truck

CO2 emissions has been agreed.

EC commissioner for climate action and energy Miguel Arias Cañete said: “The new targets and incentives will help tackle emissions, as well as bring fuel savings to transport operators and cleaner air for all Europeans.

“For the EU industry, this is an opportunity to embrace innovation towards zero-emis-

sion mobility and further strengthen its global leadership in clean vehicles.”

The VECTO carbon emissions calculating software will be used to assess trucks’ performance. This will enable operators to compare the fuel efficiency and carbon emissions of each truck brand when buying new vehicles.

ACEA secretary general Erik Jonnaert said: “These targets

are demanding, especially as their implementation does not depend solely on the commercial vehicle industry, and the baseline for the targets is still unknown. We can now only call upon member states to step up their efforts to roll-out the infrastructure required for charging and refuelling the alternatively powered trucks which will need to be sold en masse to meet these targets.”

FTA and RHA urging hauliers to back changes to cat C+E driver apprenticeships

Call for licence changes EXCLUSIVE By Carol Millett

Fleet operators are being urged to show their support for a move to include the cat C+E licence in the Large Goods Vehicle driver apprenticeship.

The 12-month apprenticeship, which was launched in 2016, currently only includes the cat C licence, which is limited to rigids.

The FTA said this week that without the inclusion of the cat C+E licence the apprenticeship is “not fit for purpose,” because it fails to address most hauliers’ needs and to tackle the HGV driver shortage.

The FTA, along with the RHA, has been lobbying the Institute for Apprenticeships and Technical Education (IfATE), the body which approves apprenticeships, to allow the apprenticeship to cover the cat C+E licence. They also want funding for the apprenticeship, currently set at £5,000 per apprentice, to be increased to £7,000.

Interview:

Mark

of the IfATE transport and logistics panel, told MT that the inclusion of the cat C+E must win the approval of the whole sector.

“That will be fine if that’s what the sector as a whole wants, but the institute is keen to ensure this is the case before asking the Trailblazer Group to revise the current standard,” he said.

IfATE is asking for evidence of industry demand for cat C+E in the apprenticeship scheme before it gives its approval. It has asked the logistics industry Trailblazer Group to carry out a survey to gauge industry support for such a move.

FTA head of skills Sally Gilson called on hauliers to respond to the survey which can be accessed via the FTA or RHA. “Without the inclusion of the cat C+E licence this apprenticeship is not fit for

Duggan

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Electric

purpose,” she said. “We want as many companies as possible to make their views known through the survey so that IfATE can see that there is more than enough demand for this.”

Pointing to a 31% fall last year in the take up of driving goods vehicles apprenticeships, Gilson added: “We believe this will significantly increase the numbers of firms signing up to this apprenticeship.”

Skills for Logistics MD David Coombes, a member

vehciles

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Interview:

DISCOVER MORE. mantruckvanandbus.co.uk Chris

Smith

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21/02/2019 14:19:22

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21/02/2019 09:33:11

News

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NEWS IN BRIEF ■ The demise of Gulliver’s Truck Hire in December last year was triggered by several key factors, including “an increase in competition from existing and new market entrants at the same time as a fall in demand across the market for trucks and vans,” according to a report by the firm’s administrator KPMG. “Further, the company experienced a number of issues with its 3-axle tractor units, adversely affecting rental utilisation and residual sale values,” the report added.

■ Hermes is opening an office in Leeds to attract top technology staff. The company is also recruiting 50 technology specialists, including senior developers and user experience (UX) experts, as part of its drive to develop innovative delivery services. The 6,500sq ft office, dubbed the Tech Hub, will house the firm’s Innovation Lab, set up in 2016 to develop forwardthinking services.

■ Hundreds of UK international hauliers have been left confused and angry after failing to secure the European Conference of Ministers of Transport (ECMT) permits they will need to transport goods across Europe if the UK crashes out of the EU without a deal. The first bid was oversubscribed, with 11,392 applications made by 1,991 haulage companies for just 984 permits.

25.2.19

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Honda closure is blow to logistics partners

By Carol Millett

Honda’s plans to close its Swindon plant in 2022 come as another blow to hauliers operating in the automotive sector, with unions warning that the move would threaten thousands of supply chain jobs in the UK. The Japanese car manufacturer will retain its European headquarters in Bracknell but will move its manufacturing facility to Japan.

The ripple effect on Honda’s logistics partners could be significant. It employs approximately 3,500 people in Swindon, where the Civic and the CR-V are built. Honda’s logistics partners include Gefco, ECM, Howard Tenens.

None of these companies were available for comment.

The manufacturer said the move is part of a strategy to focus on electric cars as the industry moves away from diesel and not because of Brexit.

A company statement said: “The challenges of electrification will see Honda revise its global manufacturing opera-

Rex Features

■ Palfinger Tail Lifts has appointed RLP Distribution to stock and distribute Palfinger spare parts with effect from 7 May. Hull-based specialist parts distribution company RLP will handle orders and deliveries of Palfinger parts, while the tail-lift manufacturer will continue to provide customer service, sales and technical support.

Move to Japan to focus on electric cars could affect 3,500 Swindon staff and partners

tions and focus activity in regions where it expects to have high production volumes.”

Honda has been vocal in its concerns regarding Brexit. In evidence to the Business Select Committee last year, Honda said every 15 minutes of Customs delay would cost it up to £850,000 a year and that it would take 18 months to set

up procedures and warehouses if the UK left the EU. It also warned that with two million component movements a day, even minor delays at the Channel Tunnel and ports would force hundreds of its trucks to wait for the equivalent of 90 hours a day.

RHA MD of policy and public affairs Rod Mckenzie

Manufacturers in dimensions squabble Trailer manufacturers are warning that truck cab manufacturers could delay the delivery of EU legislation aimed at improving truck and trailer aerodynamics.

The draft legislation, which is out for consultation this month, aims to change regulations on commercial vehicle dimensions to allow more rounded truck fronts and the addition of aerodynamic devices, such as boat tails, on the back of trailers.

The proposed changes could deliver operators fuel savings of up to 10% a year on longdistance routes, according to transport commissioner Violet Bulc. If the amendments get the go-ahead, truck and trailer manufacturers will be able to

produce more efficient vehicles from 1 September 2020.

The trailer amendment allows aerodynamic devices and equipment up to 500mm in length to be added to trailers as long as they are not used to increase the cargo area and are retractable or foldable when the vehicle is not in use.

Trailer manufacturers welcomed the consultation but raised concerns about the legislation linking trailer aerodynamic devices to cab modifications.

Lionel Curtis, technical director of Cartwright Group, told MT: “This is a great move because a trailer’s improved shape will reduce drag co-efficient by 5% to 6%, which could cut operators’ fuel bills by

approximately 3% a year.

“However, I am concerned that the legislation for boat tails could be delayed because it is linked to truck cab modifications. Unlike trailer manufacturers, which are keen to see this enacted, cab manufacturers will not be interested in introducing these changes on cabs for years because of pressing costs. Their opposition could act as a drag factor on the legislation.”

Don-Bur Group marketing manager Richard Owens echoed Curtis’s view. He said: “There is a concern in that respect and it would be a good thing to separate the two if it means the boat tail legislation can go through the European Parliament more quickly.”

said: “Job losses at this uncertain time for the logistics industry is bad news for members.”

Unions reacted angrily to the news. Des Quinn, Unite automotive sector national officer, said the UK car industry had been “brought low by the chaotic Brexit uncertainty created by the rigid approach adopted by Theresa May”.

Get in the zone

Operators delivering into Scotland are invited to attend a free workshop to learn how low emission zones (LEZs) in Glasgow, Edinburgh, Aberdeen and Dundee will affect them.

The cities have been tasked with introducing LEZs by 2020. Transport Scotland, city councils and the RHA will discuss LEZ progress, with questions welcomed throughout.

The Scottish Clean Air Roadshow, organised by MT and Transport News, takes place at Hampden Park, Glasgow, on 26 March. Register for free at: motortransport.co.uk/ clean-air-roadshowscotland.

MotorTransport 3

20/02/2019 16:35:40

News

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Eddie Stobart Logistics’ drivers will be transferred to Wincanton under TUPE rules

Wincanton briefs ESL’s Aggregate staff on deal

By Chris Druce

Wincanton has written to Eddie Stobart Logistics’ (ESL) employees on the Aggregate Industries’ Concrete Products Division contract ahead of the switch in contractor (MT 11 February). In a letter seen by MT, the operator confirmed the “recent decision by Aggregate Industries to award Wincanton the logistics contract for its concrete products division”.

It added that the move means those employed by ESL and dedicated to the Aggregate Industries contract would transfer to Wincanton under TUPE. The letter said: “It is anticipated that the transfer of the operations will take place on 4 March.” It also explained that until the transfer, ESL would continue business as usual and added that “we are working collaboratively with them to enable a smooth and successful transfer”.

According to the letter, Wincanton representatives have been present at the Hulland Ward, Derbyshire; Carnforth, Lancashire; and Grovebury Quarry in Leighton Buzzard, Bedfordshire, quarries.

It stated that the operator plans to run similar sessions this month at additional sites, TAKEN OFF: Birminghambased Carexp Logistics has joined the Fortec Distribution Network and will cover part of the B postcode. A network spokeswoman said: “Fortec has reconfigured the postcode area within the Birmingham region to manage volume.” Launched by director Phil Cole in 2008, Carexp Logistics started as a one-man one-vehicle operation, handling air freight from Birmingham and Heathrow airports. Today it specialises in air freight, sea freight and time-critical services.

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NEWS IN BRIEF Menzies Distribution has described its new £25m credit facility with Royal Bank of Scotland (RBS) as a milestone in its aim to become the UK’s leading national logistics partner.

The revolving credit facility runs for five years and is the first that the company has struck under the ownership of private equity firm Endless after its separation from John Menzies last year.

In addition to the credit facility, RBS is also providing operational banking services.

Currie Solutions has bought PS Ridgway of Dundee. It will merge it with the Currie Group bringing several key benefits to both businesses.

“Increased revenues, enhanced geographical footprint, traffic synergies and wider pallet network opportunities, which in turn will continue to improve the services we offer customers,” it said. The Palletways member has O-licences authorising up to 48 vehicles and 78 trailers, and 50,000sq ft of warehouse space.

as well as writing to affected colleagues. MT understands that the above sites are quarries where the finished product is also manufactured for onward distribution. While drivers on the contract are affected, support staff at Hulland Ward and the Torr Works in Shepton Mallet – not mentioned in the letter – could be included.

ESL had been moving finished product from the

Bradstone, Charcon and Masterblock ranges for Aggregate Industries from 14 UK sites since the five-year contract started in October 2016.

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

There are thought to be planners and managers connected to the Aggregate Industries deal at ESL’s head office in Appleton, Warrington in Cheshire, that could be subject to TUPE but this has not been conf irmed.

Wincanton declined to comment – as did Aggregate Industries. ESL was approached for comment but had not responded as MT went to press.

Connect Group has secured an extension to its major distribution contract with Daily Mirror publisher Reach. Connect-owned Smiths News has agreed a deal that will run from October 2019 to September 2024, securing annual revenue of circa-£220m, the group said in a statement to investors. Reach’s newspaper portfolio also includes the Sunday Mirror, People, Daily Express, Daily Star, Sunday Express and Daily Star Sunday.

C Butt Logistics has delivered on last year’s promise to return to the black for the first time since 2014. Reporting its results for the year to 28 April 2018, the Northampton haulier revealed a rise in profit to £27,651 (2017: £461,654 loss). However, turnover fell by more than 5% to £10.6m (2017: £11.2m). The results confirm joint MD Jonathan Butt’s prediction in February last year that the company would return to profit imminently.

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18/02/2019 15:55:20

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21/02/2019 09:31:49

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Denby Transport in fresh approach to DfT to take 25.25m Eco-Link double-trailer combo out on the road

Another try for B-Double trial

By Steve Hobson

Dick Denby, chairman of Lincolnshire haulier Denby Transport, plans to repeat his case to persuade the DfT to allow a road trial of his Eco-Link double-trailer combination.

Denby, together with his son and company MD Peter, will speak at the RHA Spring Conference on 4 April, where they will seek to convince DfT head of freight, operator licensing and roadworthiness Duncan Price to allow

a trial of 2,000 Eco-Links on UK roads.

The Eco-Link is a 60-tonne GCW, 25.25m, 8-axle combination, where a tractor unit pulls two semi-trailers, using fifth wheel couplings on both trailers.

Denby has been championing the Eco-Link, also known as a B-Double, since 2002, and in 2009 attempted to test its legality by driving one loaded to 44 tonnes on public roads. He was turned back by police before getting to the highway. Denby argues that the

longer, heavier vehicle offers several environmental and productivity benefits, while its active steering system on the middle trailer gives a turning circle comparable with current artics.

The DfT believes demand for the B-Double would be “weak”, so Denby is seeking support from operators willing to take part in a trial.

The full-day conference will also look at the Apprenticeship Levy, implications of Brexit and legal compliance.

‘Unprecedented’ growth prompts Expect warehouse expansion Expect Distribution is set to open its fourth warehouse next month and is looking for a fifth after forecasting “unprecedented growth” this year.

The Bradford-based family firm has opened a 193,000sq ft warehouse on a 10-acre site, less than a mile from the firm’s head office, as part of its plans

to drive growth in its contract logistics and warehousing divisions. The facility, which is close to the M606 and M62, brings additional storage capacity of 60,000 pallets and will create an additional 40 jobs, bringing the staff headcount to more than 300.

MD Neil Rushworth said

three-quarters of the new site is allocated, largely thanks to a spate of contract wins at the end of 2018, with the site expected to reach full capacity within the first six months.

“We are looking for our fifth warehouse, which we plan to open in 2020,” he added.

Half of the available space

will be occupied by two new contracts, landed at the end of 2018. The first is a 10-year deal with Bradford-based motor industry parts manufacturer Borg Warner, and the second is a two-year deal with kitchen facia manufacturer Gower Furniture. The company, a Palletline member, has also

signed a three-year distribution contract worth more than £1m a year with Leeds-based CDUK. Rushworth said: “Our biggest area of growth is in long-term contracts in transport and warehousing, and we are delighted to open the site with new agreements with two large players in their industries.”

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21/02/2019 11:02:24

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21/02/2019 09:34:44

Focus: Urban

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LoCITY lowdown Consolidation bears fruit, according to Genevive Amoah, project manager, innovation and strategy implementation, Mango Logistics Group Free LoCITY event will help operators future-proof fleets

Clean fleet focus at Fuels in Action London’s Ultra Low Emission Zone (ULEZ) is now less than two months away, going live on 8 April. After this date, HGVs not meeting Euro-6 emission standards will have to pay £100 per day to operate in the zone, while non-Euro-6

vans and other smaller vehicles will pay £12.50.

The ULEZ is the first step in London mayor Sadiq Khan’s transport strategy to see the city’s entire transport system be zero-emission by 2050, with air quality measures set to tighten further.

To support operators in understanding London’s future air quality aims and help them future-proof their fleets, TfL’s LoCITY programme is hosting a major roadshow: Fuels in Action: Beyond ULEZ.

KEY SPEAKERS DPD will share its all-electric micro hub concept Clipper Logistics will talk liquefied natural gas for HGVs Wincanton will share its alternative fuels exploration, including eCanter operation First Mile Recycling will share its journey towards a zero-emission fleet Ford will reveal the findings from its Custom Transit PHEV trial FTA will examine localised emissions policy beyond ULEZs Energy Saving Trust will update on the progress of approved retrofit technology Gasrec will talk gas refuelling infrastructure rollout EO Charging will talk about smart energy for electric fleets Wilson James reduces road journeys through consolidation and explores zero-emission fleet vehicles BOC will look at the UK’s hydrogen refuelling rollout Mango Logistics will talk about last-mile micro consolidation 8 MotorTransport MTR_250219_008.indd 8

Taking place on 20 March at Kempton Park racecourse, Surrey, the event will guide the industry in the next steps to creating a cleaner capital, from Low Emission Neighbourhoods through to the rollout of zero-emission zones in poor air quality hotspots.

Fuels in Action is a free-toattend full-day event packed with seminars, alternative fuel commercial HGVs and vans, ride and drives, cargo bikes and essential LoCITY advice clinics. Speakers will be drawn from across the industry and feature first-hand knowledge sharing of new technology from fleet managers, manufacturers, refuelling experts and policy-makers.

Visitors will be able to explore the latest ultra-lowemission CVs to see if they are a good fit for their business, with ride-and-drive opportunities should anyone wish to drive one. Inside delegates will be able to get all the practical guidance needed for compliance in London from the expert team on the LoCITY stand.

■ Fuels in Action is the largest LoCITY roadshow to date. To register for a free pass, go to: https://locityroadshows.co.uk/ locityroadshows2018/en/ page/home.

The logistics industry in London is light years from where it was 16 years ago, when Mango Logistics Group started operating as an international courier company. It would have been science fiction to contemplate autonomous vehicles, drones, electric cars, bikes and scooters whizzing across London. Yet this is where the industry is today, with increasing numbers of companies facing a squeeze on shrinking margins.

Upgrading your fleet or absorbing ULEZ fees while facing the ever-changing rules regarding the gig economy, minimum wage and holiday pay for contractors continues to erode margins, along with the unpredictability of Brexit.

Regardless of the concept or approach, electrification can help clean the environment, but will it really tackle the number of vehicles coming into London daily, congestion and continuing road closures within central London? This is why the word ‘bespoke’ is synonymous with Mango Logistics Group, it’s not about finding one solution, it’s about finding the right solution to get products and services across London efficiently and economically.

For the past year, Mango has been consolidating freight for multiple-drop deliveries across central London, delivering a mixture of competitors’ freight from outer regions and e-commerce parcels to single-point purpose-built lockers. In its warehouses, Mango also holds stock in its central location for urgent hardware swap outs, parts and accessories for facilities management companies through to product samples.

These bespoke services drastically reduce the number of vehicles entering the city. For one central London business, Mango successfully reduced the number of daily vehicles delivering to its business from 15 to one by acting as a central logistics hub and consolidating deliveries; helping to reduce congestion one step at a time.

London mayor Sadiq Khan told the Evening Standard that one of the leading causes of congestion in the city was online orders being delivered to people’s workplaces.

Mango believes that if businesses consolidate their daily deliveries, they can reduce congestion in the city.

Better air quality for the future is one of many reasons for this and it is one that we can all do our part to help achieve. Mango wants to do its bit for the world, and this is why the search for e-bikes and other environmentally conscious delivery vehicles is at the top of Mango’s agenda. Mango is looking to make the last green mile one of its main focuses and hopes to encourage other companies to follow suit.

To find out more, go to mangologisticsgroup.co.uk.

LoCITY welcomes more contributors to the conversation at our quarterly LoCITY meetings.

Contact locity@tfl.gov.uk for more details 25.2.19

19/02/2019 12:10:20

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21/02/2019 09:28:38 19/02/2019 16:05:04

Interview: Mark Duggan

motortransport.co.uk

TPL and ESL have had six months to establish their working relationship. Chris Druce reports

It’s exciting times at TPN For a man who has led The Pallet Network (TPN) through its biggest change in recent history, namely joining the Eddie Stobart Logistics (ESL) fold, Mark Duggan (right) comes across as assured and relaxed when MT catches up with him.

The reason for the interview with the TPN MD is that it’s now more than six months since the network’s backer, private equity company LDC, decided to bring its 11-year ownership to an end. The decision caused a wave of excitement within the road transport industry after ESL proved the successful suitor, and tantalisingly created something new in the mature pallet network sector.

Duggan has previously described the purchase by the 3PL, which has been building its capability in several sectors, as the “evolution” of the pallet network model.

Guiding principles

In a statement issued to support the six-month milestone ahead of this interview, TPN and ESL talk about the “guiding principles” that were agreed between Duggan and ESL CEO Alex Laffey following the deal.

According to Laffey: “They lay down the basic values that we will all bring to these new partnerships – the key one being mutual benefit. It has to work for everyone, including ESL, TPN, its members and the customer.”

Duggan picks up this point when we speak. “TPN is all about collaboration,” he says. He elaborates by stating

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that the network’s current shared vision can be traced back to 2014 when a significant uplift in volume caused TPN and its members some issues.

“We got together and as a membership agreed to a fundamental shift in how we ran things. Our shared vision today links back to that project.”

Duggan explains that at that time the network members defined what “good” looked like, set the membership’s objectives and agreed a collective strategy to deliver them – essentially taking time out from a fast-growing business to collectively pause for breath.

“This way of working goes beyond operational principles and is based on a culture of mutual trust, support and communication,” he says. “We respect that every member is in business to make money... but where 126 circles [the number of member depots in TPN] overlap there is a place called common interest, and that’s where TPN has its flag. We all need to keep a focus on that area to move forward together as one. So the guided principles [which dovetail nicely] are Alex’s way of saying ‘it’s got to work for everybody’.”

Reinforcing this members-first approach, TPN is not a pallet network that has central contracts – something Duggan clearly feels strongly about – so the revenue generated within the network is purely from the members.

It should come as no surprise then that rather than everything getting painted green and white following the deal – yes, tongue in cheek but a question asked at the time within the indus-

try – TPN has remained its own master within the expanding ESL group.

“We had a big decision to make and we had a lot of options,” says Duggan of the deal last year, clearly still content with the choice made.

With the working relationship established, opportunities have arisen for TPN, essentially now a strategic partner for ESL. Those sales leads are routed through TPN under the arrangement and presented to its membership, allowing members that may want to bring ESL freight into the network.

Network of choice

Leads are, in the main, within the B2B marketplace, which is clearly where Duggan wants to be “as the network of choice”. He adds that B2C is nevertheless around 13% of volume in TPN. “We obviously undertake B2C deliveries, however their special requirements mean they are often more costly for members to effect, which isn’t really recognised in pricing,” he says.

“It’s not about B2C for Stobart either.

B2B and professional shippers, sustainable freight flows, fewer collections and better margin is what they are about,” he adds.

For ESL, which despite its significant resources was not active in the world of one to five pallet deliveries, TPN has clearly enhanced its capability.

Duggan picks this up. “There is a PLC brand where Stobart manages the containers, then it makes use of its multi-modal capability across rail and road. Then there is an element

that doesn’t fit… the one to five pallets, which is where we step in,” he explains.

“However it is not the case that ‘you have to take it’. It is an opportunity for members, who are invited to price up the work and return with that price to ESL to see if it’s accepted. If it works for everyone, it goes ahead.”

Ultimately, the guiding principles protect against simply more volume and more pressure. “It is for the TPN member to decide,” Duggan asserts.

The relationship is two-way. Duggan tells MT that a TPN member found itself in talks a while back with a client far larger than it would normally deal with. It was clear that individually they did not have the capability to deliver, but ESL did. The lead was fed back, providing a win-win for everybody.

“ESL is offering partnerships that work outside of and beyond the network. So good-quality work, guaranteed for members, with no risk and a commitment between them and ESL,” Duggan says.

Beneficial relationship

It all adds up to a seemingly mutually beneficial relationship for both network and owner. Duggan is clearly in no doubt. “Everything Stobart said it would do, it has done. It’s been good news and it’s allowed me to continue running the strategy as I want,” he says. “Members now have access to work and accounts they wouldn’t normally get.”

It is, to paraphrase Duggan’s parting comment to MT, an exciting time within TPN. 25.2.19

18/02/2019 15:58:53

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21/02/2019 09:36:24

Viewpoint

motortransport.co.uk

Cutting truck CO2 emissions is unrealistic

T Steve Hobson Editor Motor Transport

he EU’s new carbon emissions reduction targets will see emissions from new trucks slashed 15% by 2025 and 30% by 2030. Many would argue shifting the focus from cutting local pollutants NOx and particulates – started with Euro-1 in 1992 and culminating in the super-clean Euro-6 in 2014 – to addressing carbon emissions is long overdue, bearing in mind most of us (apart from US president Donald Trump) have known about the dangers of global warming for quite a while now.

The problem is that now the EU has finally woken up to the issue, it is forcing change at a pace that is going to cause pain for the makers and operators of commercial vehicles. Let’s not forget that there really are no viable alternatives to road freight transport in the UK and on the continent so setting unrealistic limits on carbon emissions is exactly that – unrealistic.

The other major problem is that while there are things truck designers can do to reduce the fuel

consumption of their vehicles – more rounded noses being one example of aerodynamic improvements available – there is nothing they can do about the way trucks are used. Better driver training can yield significant fuel efficiencies, but that can’t be designed into the vehicle. What trailer a tractor tows also has huge implications and is much more complicated that simply measuring mpg.

A tractor towing one of Dick Denby’s B-Double 60-tonne rigs or a 4.8m-high, 15.65m-long double-decker would use far more fuel per mile but far less for the weight or volume shifted.

Equally, running a truck on biofuel, be it gas or diesel, will cut carbon emissions significantly but how will this be taken into account?

Making car drivers switch from fossil fuels to electric power may be laudable but legislating to require commercial vehicles to reduce emissions by 30% in little over a decade is just wishful thinking.

Networks are custodians of members’ reputations

T

Stuart White General manager, operations Fortec Distribution Network

he pallet industry has never been so competitive, with increasing volumes and the challenge to maintain high levels of service. It is a pattern that mirrors that of the parcels sector. However, as pallet networks strive to emulate the service levels that are expected in the parcels industry, there is one constant they would do well to remember: they are custodians of their members’ reputations.

The very essence of a pallet network is to add value to members’ businesses and it can do this in many ways – through reliable IT systems, greater geographic reach, managing volumes and providing quicker services.

What is often overlooked is that in a well-run network there is a cascade effect. The reputations of its members’ customers increase because they can offer their customers better service through timely and reliable deliveries.

Pallet network delivery has become a favoured option resulting in increased volumes. This, against a backdrop of heightened customer demands, has made it increasingly challenging for networks to deliver the exemplary levels of service that are expected. As such, pallet delivery networks are under greater pressure to ensure they maintain a consistent level of service. It’s a

12 MotorTransport MTR_250219_012.indd 12

challenge and for this to be achieved it is essential to ensure the service offering is underpinned by a robust operation that is able to support and, importantly, retain its member network.

It is a simple proposition. A successful delivery reflects on many parties: the network, the member who took the original order and the member who made the last-mile delivery.

However, from the customer’s point of view, it will only be the member in the front line who will be at the forefront of the customer’s mind.

The network will be almost invisible – even though the part it plays is pivotal in the delivery process. A business sending out goods will obviously remember which haulier it employed, and the end customer may possibly recall which carrier carried out the delivery. To the member, however, it is the pallet network that is key – it serves as an extension of its business.

It is a challenging marketplace and it needs to be recognised that if a network is to be successful it is vital that its members’ interests are at the very core of everything they do.

The newspaper for transport operators

To contact us: Tel: 020 8912 +4 digits or email: name.surname@roadtransport.com Editor Steve Hobson 2161 Editor-in-chief Christopher Walton 2163 Head of content Chris Druce 2158 Deputy head of content Hayley Pink 2165 Group production editor Clare Goldie 2174 Deputy production editor Jo Saunders 2173 Key account manager Andrew Smith 07771 885874 Display telesales Barnaby Goodman-Smith 2128 Event sales Richard Bennett 07889 823060 Tim George 0755 7677758 Head of sales Emma Tyrer 07900 691137 Divisional director Vic Bunby 2121 Head of marketing Jane Casling 2133 Head of events/MT Awards Stephen Pobjoy 2135 Managing director Andy Salter 2171 Editorial office Road Transport Media, Sixth Floor, Chancery House, St Nicholas Way, Sutton, Surrey SM1 1JB 020 8912 2170 Free copies MT is available free to specified licensed operators under the publisher’s terms of control. For details, email mtsccqueries@roadtransport.com, or call 01772 426705 Subscriptions Tel 0330 333 9544 Quadrant Subscription Services, Rockwood House, Perrymount Road, Haywards Heath, West Sussex RH16 3DH Rates UK £135/year. Europe £163/ year. RoW £163/year. Cheques made payable to Motor Transport.

Apply online at mtssubs.com Registered at the Post Office as a newspaper Published by DVV Media International Ltd © 2019 DVV Media International Ltd ISSN 0027-206 X

Got something to say?

If you would like to contribute to MT’s Viewpoint, email steve.hobson@roadtransport.com

25.2.19

21/02/2019 12:32:00

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21/02/2019 09:38:03

Electric vehicles

Ever-stricter emissions targets could mean a bright future for electric vehicles, but are the manufacturers ready to meet the demand?

Colin Barnett reports

motortransport.co.uk

Are trends electric?

A

s demand for cleaner vehicles to deliver goods grows rapidly, especially in urban environments, electric power seems the obvious answer. There is no doubt that for cars and smaller vans that require relatively small batteries, electric power is a real alternative. For example, the leasing costs of an electric Renault Kangoo can now be lower than for the diesel equivalent. The choice of vans up to 3.5-tonne GVW is increasing all the time.

However, upscaling is a different matter.

14 MotorTransport MTR_250219_014-018.indd 14

The main issue surrounding electric trucks is that of the energy density of the batteries, that is, capacity versus size and weight. This affects operational factors like range, payload reduction and recharging time.

For all its faults, diesel is still the perfect energy source for medium- to long-distance door-to-door goods transport. It has an almost universal supply network from which energy can be transferred to a vehicle very rapidly.

Sufficient fuel for 1,000km can be loaded into acceptably sized tanks in a matter of minutes.

Diesel is the benchmark that electric must aim for. But that’s not to say electric trucks are a non-starter. For certain operations, such as regional deliveries with a return to base at the end of each duty cycle, electricity has significant attractions.

As a result, the market is focussed on rigids from 7.5 to 26 tonnes, although there are some electric tractors on the horizon. But before we look at that market, we should look at how they are powered. ➜ 16 25.2.19

18/02/2019 15:42:34

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Electric vehicles

So, what’s available?

Progress in the field is advancing rapidly, and we fully expect that the picture will be significantly different in a year’s time. We should reiterate that electric power for vehicles is not new. The first petrol-electric hybrid car was probably the Arnold Motor Carriage Sociable of 1896, a fleet of Thomas-Tilling petrol-electric hybrid buses was launched in 1911, Harrods built and operated a fleet of 60 battery electric vans of its own design between the wars and, of course, the milk float has been delivering our doorstep pint for decades. Had diesel not come along and become the wonder fuel of choice in the early 1930s, we wouldn’t need to be writing this today.

The issues behind the rush to alternative fuels are by no means uniquely British, or even European. Indeed, thanks to the massive advances created by the European emissions standards, and its near equivalents in North America and Japan, our problems are minor compared with those encountered in countries like India and China, where work on emissions reduction has only started relatively recently.

It’s no surprise, then, that research and development of various forms of electric powered goods vehicles is

16 MotorTransport MTR_250219_014-018.indd 16

motortransport.co.uk

being conducted at a global level, although as you might expect, Europe does appear to be taking the lead in practical solutions for European conditions.

Admittedly, North America does have the Tesla battery electric tractor, and the hydrogen fuel cell vehicles from Nikola and Toyota although, Nikola’s plans for a European operation in Denmark notwithstanding, their relevance to UK operators is still a long way off, even assuming they all survive to become reality.

Daimler

Daimler was the first mainstream manufacturer to offer any sort of electric truck in the shape of the FUSO Canter Eco-Hybrid.

However, with its emphasis on performance and economy enhancement, but no zero-emissions capability, its appeal is limited. However, its more recent counterpart, the FUSO eCanter, offers a far more compelling case, and we were impressed by it during our recent 7.5-tonne group test. There are presently nine 7.5-tonne examples undergoing real-world evaluation in London, in the hands of operators DPD, Hovis and Wincanton.

Elsewhere, Daimler is well advanced with operator trials of a variety of electric and fuel cell vehicles under the Mercedes-Benz and Freightliner brands.

With various Mercedes prototypes with operators, including an eActros recently delivered to German supermarket EDEKA in Berlin. Another big breakthrough came just before Christmas in North America when it

HYBRID OR PURE? There are a few variations on the electric theme. There are full plug-in battery powered vehicles and there are hybrids.

Parallel hybrids, the most familiar in the UK being the Fuso Canter Eco-Hybrid, blend power from a conventional internal combustion engine with electric drive from a pack of batteries. The batteries can be charged by an on-board generator and regenerative braking on the over-run or they can be charged at base prior to a duty cycle. Both types will use regeneration to keep the batteries topped up to maximise range. Parallel hybrids have varying levels of ability to operate in urban locations with zero-tailpipe emissions, none in some cases. The other type of hybrid is the series more commonly known as a rangeextended hybrid. Here the drive is derived purely from the batteries as with a plug-in electric vehicle, but a small engine, typically a 1.4- to 2-litre petrol unit, is used to charge the batteries on the move. Their range is limited only by the size of the fuel tank for the range-extending engine, which is already highly efficient as it runs at a constant speed. When the batteries are charged, the engine can be turned off completely when zero-tailpipe emissions are needed.

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18/02/2019 15:43:01

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ROADSHOWS

21/02/2019 09:41:39

Electric vehicles

delivered 20 Freightliner eM2 106 e-trucks to Penske Leasing. The local distribution and last-mile delivery 6- to 12-tonne 4-wheelers have batteries that provide 325kWh of power at up to 480hp. The eM2 has a maximum range of around 230 miles, with a one-hour 80% top-up charge giving 185 miles.

DAF

At last autumn’s IAA show in Hannover, DAF showed the three prongs of its electric prototype programme that were soon to be entering into real-world operational fleet trials. The three are an electric LF and a CF hybrid, which will be tested in the UK and the Netherlands, and a full electric CF to be tested in Belgium, Germany and the Netherlands. In December, it announced that the first prototype, a full-battery electric CF 4x2 tractor, had entered service with the Dutch supermarket Jumbo. Built in association with VDL Groep, the tractor has a 170kWh battery pack and a 210kW (285hp) electric motor, giving a range of 100km at 40 tonnes and with a complete recharge said to be possible in 90 minutes.

IVECO

With its heavy concentration on natural gas power, IVECO’s only real contribution is the Daily electric van, which has theoretically been available in the UK for a few years, although we are not aware of it actually selling one.

MAN

MAN also revealed an extensive collection of electric trucks at the Hannover show, including the CitE low-entry truck suitable for RCVs and the like, and the eTGM distribution 26-tonner.

It is now concentrating on placing trial vehicles with operators throughout mainland Europe and expects to have some in UK hands by the year end. Its highest profile placement so far

18 MotorTransport MTR_250219_014-018.indd 18

motortransport.co.uk

is the 360hp eTGM 4x2 tractor unit that was recently handed over to Porsche for use in production of its forthcoming Taycan electric car. Running at 32 tonnes, its 149kWh of lithium-ion batteries give it a range of 130km.

Renault

Renault has a well-established development programme for various forms of electric and hybrid trucks. It has two production-ready models available, a narrow-cab Range D 16-tonner and a 26-tonne 6x2 with the Wide cab.

Motors range from 57kW to 300kW (76hp to 402hp), with a variety of lithium-ion battery capacities according to operational needs. It says a range of 200km covers 76% of operations, with most distribution cycles involving a 100150km round trip from RDC to city centre.

Renault’s electric trucks have already successfully completed extensive real-world operational trials with a variety of French operators, including luxury goods seller Guerlain, which delivers to 15 Parisienne stores during the night, and Delanchy, which transports fresh seafood and produce in Lyon.

According to Guerlain, the costs associated with electric trucks are now similar to diesel and falling. It reports that for regular returnto-base operations on known routes, the Renault D26 Wide ZE Electric is now a genuine alternative to diesel, with a flexible specification able to provide the optimum balance of range and payload required by individual operators.

Scania

Scania has probably taken the electric truck concept to its most extreme level. It has developed a conventional tractor unit which is powered by electricity obtained from overhead power lines via a trolley-bus type pantograph.

Although the technology works well enough on a 2km stretch of highway near Scania’s

Sodertalje HQ, the infrastructure issues are fairly obvious. While there may be potential applications to be discovered, we’re unlikely to see overhead lines running the length of the M1 any time soon. More realistically, its HEV hybrid rigid has been on sale in the UK since November, with the plug-in hybrid PHEV following later this year. They will offer 10km of zero tailpipe emissions for operating in sensitive areas.

Volvo

Volvo is on the verge of electric truck reality, with series production of electric vehicles due to commence in March. The initial vehicles will be FL and FE models, with GVWs of 16, 18 and 26 tonnes available, with the range likely to be extended in the near future. Although production will be ramped up gradually, UK operators are welcome to place their orders now, including for right-hand drive vehicles.

Volvo in the UK is certainly preparing for their arrival with the installation of a state-of-the-art ABB recharging facility at its Warwick HQ.

Tevva

While the big manufacturers are developing electric trucks on a global basis, there are also more local projects reaching fruition. One company seemingly on the verge of a significant presence is Essex-based Tevva, freshly buoyed by a major investment by a new partner in India, Bharat Forge. Tevva’s core product is a range-extended plug-in battery truck, available with a range of GVWs from 7.5 to 14 tonnes.

Tevva is unusual in its willingness to publish figures. It is quoting a seven-year full R&M lease package for a 10-tonner at £1,900 per month, which it compares with £1,450 per month for a comparable diesel, based on a 300,000-mile life. On top of this is a monthly fuel saving of £600 and no congestion charge.

“If you do 100 miles a day, it will save you money,” says Tevva sales and marketing director David Thackray. That shouldn’t be difficult as it has a claimed zero tailpipe emission range of 100 miles, which is extended to more than 400 miles by the range extender – a 1.5-litre petrol or diesel engine-powered on-board generator that operates only if needed. Ambient, chilled and frozen body applications are all compatible with the Tevva system.

Deliveries to the first seven fleet customers are just starting and include ambient, chilled and frozen bodies to a mix of operators from small to very large, the first being to a familiar but publicityshy courier company. Its features include geofencing software that ensures it operates only on electric power in clean air areas. Tevva will be making a pool of demonstrators available for threeto six-month loans to operators from June. ■ 25.2.19

18/02/2019 15:43:30

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21/02/2019 09:46:24

Interview: Chris Smith

C

hris Smith, sales director B2B UK and Ireland at Michelin, has been with the company for more than a third of his life, having joined it 12 years ago at the age of 23.

“I started as a truck sales account manager covering north London, east London and Essex in the days when we had eight regional managers and 56 account managers,” Smith says.

“I cut my teeth doing that for about two-anda-half years. The one thing I found with Michelin is when I walked through the door, whether people wanted to buy the products or not, they knew the brand and they accepted that if you were a Michelin sales guy, you knew what you were talking about.”

From there he progressed to looking after larger fleets across the south-east, such as London Fire Brigade, before becoming regional sales manager. He then moved to Michelin’s UK HQ in Stoke-on-Trent to become marketing director looking after the truck business in the UK and Ireland.

After two years in the job, Michelin embarked

on a series of reorganisations that saw the Nordic countries briefly brought under Smith’s remit, culminating in another reshuffle in January last year.

“The purpose of that reorganisation was to become more customer focused,” says Smith.

“Previously we’d had separate teams looking after our truck, agricultural and earthmover divisions, designed to make us more knowledgeable and able to help our customers. But the negative was that we became siloed, and as we saw more customers having a mixture of vehicles across those segments, we began to find it more difficult to cover their needs.

“So in January 2018 I took on the role of B2B sales director, responsible for all the heavy commercial business, including truck, agricultural and earthmover, plus all of our service and solutions business. The end goal is that when a customer comes to us they see one Michelin, whatever they want to buy.”

The other big change in 2018 was the announcement of a merger of the heavy truck operations of ATS Euromaster with Tructyre,

creating the largest national truck tyre business in the UK. ATS was originally formed in 1965, while independent tyre supplier Tructyre Fleet Management was bought by the group in October 2017. The move means ATS Euromaster, which has 335 sites, will switch its focus to purely cars and light commercials and leave vehicles over 3.5 tonnes to Tructyre, which will have its own regional administrative functions, local stocking points, call centre and Tructyre ATS-branded mobile service fleet.

Rather like selling new trucks, supplying tyres to fleet operators has always been a slightly convoluted process, with both the manufacturer and dealer having differing roles depending on whether the customer is regarded as primarily retail or fleet.

“Essentially, our direct customer is a tyre dealer,” explains Smith. “The majority of what we sell goes to tyre dealers who fit them to their customers’ vehicles. Then there is part of the business where we have a direct invoice relationship with the haulier, which tends to be the

Treading the line Michelin sales director Chris Smith talks to Steve Hobson about exacting standards and how the company is making the case for offering the best value as well as the best tyres

20 MotorTransport MTR_250219_020-022.indd 20

bigger fleets where we have a PPK or a price per vehicle contract. There we become the customer of the dealer because we’re subcontracting them the work to supply and fit and whatever else.”

Smith’s sales force spends 70% of its time with operators however, looking at their operations and coming up with the right tyre package. “If I said to most professional hauliers out there, ‘if every tyre was the same price, which one would you have?’ more than 80%, maybe 90%, will say Michelin,” he says.

“For me that says that the mindset is it still is the best product, but we’ve got to prove that it’s the best value product. The way we have gone to market was to put a set of tyres on a vehicle, run them, follow the mileage and then look at the cost of the tyre and the mileage it achieves versus the competitors’ cost and mileage. While we still do a lot of that, we’re trying to get the salesforce to say that’s only part of the picture.

“There’s so much more that affects the cost of a haulier’s operation that’s linked to tyres.

We should be focused on how robust the tyre is and on the fuel economy of that tyre. We should be focused on the service element because one of the big parts that our guys do is audit a fleet, look at the service and then work with the service partner to improve it.

“We’re having conversations with one or two big customers who want to save money on their fuel bill. Operators can save 5% on fuel tomorrow, just by putting the right pressure in the tyre. When we audit fleets we find they are on average 9% or 10% under-inflated. That’s costing a large fleet millions of pounds every year.”

In the road freight sector getting this service element right across the country is a challenge 25.2.19

18/02/2019 15:44:51

motortransport.co.uk

as not every fleet customer will be within reach of a high-quality service provider.

“In the bus business we have our own fitters who work across the garages, so we control it, and service levels there are very high. For the rest, we have a number of mechanisms. There are rewards for our service providers who provide service to a high standard. Then we have a team of auditors who go into the tyre dealer and look at all the tyres that have come off. They ask ‘was it worn to the right level in accordance with the operator’s tread depth policy? Did you re-groove the tyre? If the tyre was damaged, could you have repaired it? From looking at the wear pattern, did you have the right pressure in it?’

“Then they audit fleets’ service level agreements on how we want the service provider to service the fleet. Have we got retreads in the right positions? Are we regrooving enough tyres?

Are the tyres being turned on the rim and what’s the pressure in the tyres? We have a team of auditors in the UK and they look after more than 60,000 vehicles under those risk contracts and all the service providers related to that.”

Michelin will work with a dealer that is not meeting its exacting standards to help them improve, but ultimately it will move its franchise if necessary. “If we’re going to win business and be profitable the tyre has to be serviced right,” says Smith bluntly. “We have a partnership network of independents that we feel are the most professional in the marketplace.”

Although still part of Michelin, ATS Euromaster is a standalone business and its sites must come up to the same standards ➜ 22

WHY HAVEN’T FUEL-SAVING TYRES CAUGHT ON? While tyre life and consequent cost per mile of the rubber remains the focus for most operators, tyre manufacturers for years have claimed that the biggest win can be in fitting the most fuel-fficient, low rolling resistance tyres.

Chris Smith cites a recent trial at Millbrook that found the best fuel-saving tyres could reduce diesel consumption by 17%. “OK, that’s on a test track, but 17% is enormous and that would wipe out the tyre bill and some,” says Smith. “I think it’s logical to assume that 5% is achievable for most fleets by switching to a fuel-efficient tyre. The industry has exhausted some of the other options like aerodynamics and now they’re looking for where else they can go to save fuel.”

Some operators that tried early versions of low rolling resistance tyres found the life of the tyre was reduced unacceptably, so the latest generation Michelin products are designed to combine good mileage with fuel savings. “The technology wasn’t really there to try and meet both ends of the scale,” explains Smith.

“The materials we needed to put into a tyre like carbon black to improve the longevity of the product and the silicas needed to give fuel efficiency weren’t really compatible. We have done a lot of R&D over the years and the fuel-efficient X Line Energy tyre is way better on mileage than the old energy tyres. Someone doing long-distance routes is not going to see a 50% reduction in the mileage. In some cases they will get a better mileage because we don’t just make it for fuel efficiency, we make it for that type of journey. If it’s doing long straight lines, a regional tyre can often heat up a lot and therefore wear out more quickly, whereas the long-distance X Line Energy tyre is a lighter construction so it should get good mileage.

“Our Energy products have a lot higher silicon content, but clever mixing techniques make sure we don’t lose longevity. Take our new X Multi Energy – it is our first regional fuel-saving tyre, being significantly better on fuel with the same mileage as its predecessor. And the next generation coming in the future will probably be better on both.

“If I was a regional operator today I would run the X Multi Energy because maybe I don’t want to go the whole hog straight away to the X Line Energy, especially if I’m doing lots of town work. But if I can save almost a litre of fuel every 60 miles versus the old X MultiWay 3D and still maintain that mileage performance, then the cost benefit to my business is going to be much bigger than getting a bit more mileage out of a tyre.”

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MTR_250219_020-022.indd 21

MotorTransport 21

21/02/2019 11:03:41

Interview: Chris Smith

motortransport.co.uk

as the 90 independent dealer points to retain Michelin’s truck tyre business. “Through the merger with Tructyre, ATS has started a reorganisation process that needs to move towards a hub and spoke model,” Smith says.

“As Tructyre ATS, they won’t really have points of sale but they will have more than 100 stocking locations that will operate on a mobile van basis. Generally speaking, that gives us pretty much full coverage of the UK.” Tructyre ATS accounts for just over half of Michelin’s UK truck tyre sales, a balance Smith says he is comfortable with. He also wants to avoid arguments about who ‘owns’ the customer. “As we roll out our network, our ambition is to have very strong national coverage,” he says. “That will be the same model we have today, which is a strong ATS, plus strong independent partners because I don’t believe you can satisfy every big national customer with one or the other.

“If we switched to one model or the other,

we would struggle to get consistent coverage.

We’ll try and build a network based on the strongest people out there.

Taking the risk

“Every service provider likes to say they own the customer and, to a degree, I have to agree with them, if they have the transactional relationship, they are taking the risk on the money and they fit the tyres. We have some direct customer relationships through our managed contracts where we own the customer. But I prefer to say that wherever possible, with Tructyre ATS and the independents, we want to work together on that customer.

“I think we’ve made a mistake if we get into the battle over who owns the customer. No one owns the customer because tomorrow the customer can decide they’re not going to use any of the parties involved and use somebody else. I hope with the roll out of Tructyre ATS and with the development of a partnership

programme with the independents we will get a much better three-way relationship.

“We need to work closer together. Probably the biggest thing in tyres is the politics regarding who owns the customer. If we can all rise above that and deliver together a great offer for the customer, then they’re not going to go anywhere else and we’ve cracked it.”

This tension between dealer and manufacturer is heightened when Michelin is telling hauliers that better service will result in fitting fewer new tyres, reducing revenue for the service providers. “We need to understand that we need to create more revenue streams for the dealer if they work with us,” says Smith.

“One example is that we work exclusively with a company called Wheely-Safe and we will only sell its fantastic wheel security and tyre pressure monitoring systems through our partners. So, if you’re not a service partner of Michelin, then you don’t get the revenue opportunity of fitting it to the customer’s vehicles.” ■

IMPORT TARIFFS ON CHINESE TYRES BOOSTS BUDGET BRANDS As with all premium tyre manufacturers, Michelin covers the market with a range of brands, including BFGoodrich, Tigar, Orium and Riken, complementing its mainstream product line-up.

The introduction of EU anti-dumping tariffs on cheap Chinese tyres resulted in imports falling 40% in 2018, and as there was inevitably some forward buying ahead of the price increase, Smith expects a further reduction in 2019. While this hasn’t had an immediate effect on sales of premium brands it has boosted non-Chinese budget products. “It hasn’t taken the conversation away, but it’s moved it slightly,” says Smith. “Last year approximately 500,000 Chinese tyres came in and bear in mind the tariffs weren’t implemented at the start of the year.

“The immediate reaction of anyone buying a cheap budget tyre was ‘OK, what’s the next cheapest new tyre I can get my hands on?’ That generally plays to manufacturers like us that makes a tier three or low intermediate tier tyre.

“I don’t want to call it a budget tyre because that suggests something that’s not got the quality and safety around it. For me, our tier three tyre is a cheaper product, because it doesn’t last as long, but it’s still a very safe, decent quality product.”

The other beneficiary of higher Chinese tyre prices has been retreads, but this is taking longer to feed through because of a shortage of 22 MotorTransport MTR_250219_020-022.indd 22

premium casings. “We have seen an increase in demand, but people are migrating to new tyres,” says Smith. “It’s a different conversation to move them from a cheap new tyre to another slightly more expensive new tyre than it is to move them to a retread, which in a lot of cases is still more expensive than the cheapest new tyre.”

“The other reason retread hasn’t picked up is because after five years of using Chinese tyres, we haven’t got the quantity of quality casings in the market. The demand is there and I could sell twice as many Encores tomorrow if I could make them. I’ve got the factory capacity in Stoke-onTrent, but I can’t get the casings.

“The Michelin casing will be retreated first as a Remix product and then second as an Encore,” says Smith. “Everybody else’s casing will go into the Encore process and only be retreaded once.”

One result of the drop in Chinese imports will be a shrinkage in the overall truck tyre market in 2019. “Some commentators were predicting that the Chinese tariffs were going to create a massive shortage. How could the premium manufacturers step in to replace 500,000 Chinese tyres?” Smith says. “But 500,000 Chinese tyres is equivalent to 150,000 premiums. One of the effects will be that operators are fitting better tyres that last longer.

“Environmentally, this is really positive.

Because we’re fitting better products, there is

less scrap. Where are those 500,000 Chinese tyres now? I suspect many of them are still lying in a field somewhere, or were shipped abroad.”

Smith pledges that the import tariffs will not be used as an opportunity for Michelin to ramp up prices on new tyres. “I’ve got some ranges where the increased production has made the unit cost lower, and therefore we will be able to maintain or even slightly reduce some of the price points,” he says. “One of my aims with the tier three tyres was not to ramp up the pricing, because when the tariffs were implemented everyone was waiting for the premium manufacturers to take advantage.

“I’m determined that they will only move if we are forced to by increases in raw materials, exchange rates or whatever else, not to take advantage of our customer base. Prices will be flat at the start of this year.”

The biggest unknown is Brexit, and a no-deal exit would mean the introduction of World Trade Organisation tariffs on tyres imported to the UK from the EU. “For any product that you bring into the UK, there would be a 4.5% tariff on the sales price,” says Smith. “It provides lots more challenges because when we bring the product into the UK, and then we want to ship it to Ireland, there’s a potential for two hits.

“We’re working on the scenarios of how to deal with those kinds of things, but the instant 4.5% would be difficult to swallow.”

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