Motor Transport 25 March 2019

Sharp ■ Informed ■ Challenging

25.3.19

INNOVATION. EFFICIENCY. RELIABILITY. MT Top 100 company acquires 30% of bulk powder specialist MAKE A SPLASH IN YOUR INDUSTRY

BOOK NOW MTAWARDS.CO.UK

NEWS INSIDE

By Chris Tindall

Striking a deal

TPA Capital has taken control of Pallet-Track

p3

Brexit warning

Import tariffs mean more expensive trucks p6

Beamish shuts

Car transporter firm ceases to trade

Turners takes stake in Dowse

p8

OPERATORS IN THIS ISSUE Asco Foods............................................p6 Aspray Group ........................................p8 Beamish Transport ................................p8 Bowring Transport .................................p5 CEVA Logistics ......................................p5 CM Downton..........................................p8 Duncan Adams ......................................p3 Massey Wilcox Transport.......................p4 Richard Read (Transport) .......................p4 Woods (Haulage)...................................p3

Turners (Soham) has bought a 30% stake in Dowse Haulage, a bulk powder specialist based in North Lincolnshire.

Dowse director Marc Dowse said the company had worked with Motor Transport Top 100 company Turners “for years” and the move was good news for all concerned.

“It’s been ongoing for a year or so, maybe longer. Me and [Turners MD] Paul Day get on really well and it’s all good,” he said.

Dowse explained that the Cambridgeshire logistics company, which runs in excess of 1,800 vehicles, had purchased the shares from his sister and she was no longer involved in the business.

Official documents show Turners now holds “more than 25% but not more than 50% of the shares in the company”.

Dowse confirmed that Turners had bought a 30% stake and that he still held 65% of the

shares. Paul Gregory is listed as owning the remaining 5%.

Dowse Haulage operates 38 lorries and 43 trailers out of two bases in Brigg. It runs mainly Scanias, as well as Feldbinder powder tanks.

Its director said that Turners’ involvement had “opened my eyes” to the haulage giant’s ability to purchase goods and services.

“The buying power of fuel, AdBlue, trucks, tanks; you run 38 trucks and you think you

are one of the big boys – but you are really not one of the big boys,” Dowse said. “[Day] texts me two or three times a week, calls me. He’s interested in what goes on.”

Turners (Soham) currently has investments in a range of trading and non-trading companies, including Profresh Solutions, MacIntyre Transport, Goldstar Transport, CRW and Ocean Trailers.

Day was not available for comment as MT went to press.

ZERO-EMISSION MISSION: Grocer Co-op has launched a new online delivery service using electric cargo bikes to transport goods from local stores to consumers within two hours. It is the first time Co-op has offered online delivery, and it opted for the bikes as they are zero-emission. The online service is initially available to shoppers within 4km of the Co-op store on Kings Road in Chelsea, before being rolled out across London. Operator e-cargobikes.com claims that, using a hub-based over a defined radius model, one of its bikes can deliver the same amount as a conventional 3.5-tonne diesel van over an eight-hour shift while using a fraction of the energy.

News

Extra

MTR_250319_001.indd 1

p10

Focus:

urban

p12

Viewpoint:

Brexit

p14

Finance

p16

Logistics:

warehouse

p20

Pall-Ex and Staples win Graham contract Pall-Ex has introduced a groupage service to support a new contract it is running together with Staples Solutions.

The partners are now providing warehousing fulfilment and distribution to the Saint-Gobain-owned plumbers’ merchant Graham from Staples’ 500,000sq ft warehouse in Rockingham, Northamptonshire.

Pall-Ex and Staples have an existing contract with builders’ merchant Jewson, also part of Saint-Gobain.

Kevin Buchanan, group MD of Pall-Ex, said: “Over the last 18 months we have worked closely with Staples to develop a full-service offering, increasing Pall-Ex’s corporate volume by 15% and our network volume by 5.2%.

“Our newly created full-load and part-load service, the capabilities of our network and the addition of two new Pall-Ex staff … will ensure we exceed the expectations of Graham and Saint-Gobain.”

DISCOVER MORE. mantruckvanandbus.co.uk

Technology:

cameras

p24

21/03/2019 17:22:34

Everyone talks, one delivers.

The new Actros.

MirrorCam. In place of regular exterior mirrors, the new Actros is equipped with the revolutionary, aerodynamically ingenious MirrorCam. The system doesn’t just provide an optimal all-round view, it also offers high levels of safety when manoeuvring, turning and changing lanes. www.mercedes-benz-trucks.com For more information scan the QR code.

AD_250319__P2.indd 2

21/03/2019 09:10:37

News

motortransport.co.uk

Pallet network founders to retain ‘significant shareholding’ and remain as directors

TPA Capital takes over control of Pallet-Track

By Chris Druce

Private equity company TPA Capital has taken a controlling stake in Wolverhamptonbased Pallet-Track.

In a statement, TPA Capital said it was delighted to strike the deal with the pallet network, which has 90 haulier members.

Set up in 2002 by MD Nigel Parkes with commercial director Carl Jones, PalletTrack has regional hubs in Wigan and Welwyn Garden City and claims to process around 3.5 million pallets a year.

Directors Parkes and Jones held 52% and 24% of PalletTrack holding company Palman ahead of the deal.

They will remain in place to lead the business and retain a “significant shareholding” in the network.

Parkes said: “There are exciting times ahead. From the very beginning it was clear the TPA partnership demonstrated a difference in its culture and nuances that had identical synergies with PalletTrack.

“Its shared ethos of member shareholder participation, combined with a long-

term strategic vision and uniquely being unconstrained by typical investor or financing organisations, will enable this new partnership to realise ambitious plans and longterm sustainable growth.”

TPA partner Greg Allen said: “We’re incredibly excited to be in a position to support

Pallet-Track with the next stage of its growth story.

“Under Nigel’s stewardship the business has grown into one of the leading pallet networks in the UK, which is a testament to the quality of the Pallet-Track team and its members.”

Allen said the firm had

been attracted to the collaborative culture of the network.

“We look forward to partnering with the Pallet-Track team and its members to help realise their long-term ambitions,” he added.

The value of the deal, which completed at the start of this month, was not disclosed.

Ex-Duncan Adams workers turn to union after redundancies Former staff at Duncan Adams are taking legal action against the Grangemouth haulier for failing to consult on their redundancies.

The Unite union confirmed its solicitors have around 50 claims from employees, which will be lodged on their behalf.

The firm entered administration this month (MT 11 March) after an unsuccessful effort to sell the business.

Deloitte said it had been incurring “significant losses” due to certain contracts, coupled with difficult trading conditions.

Mark Lyon, Unite regional officer, said the union had held 25.3.19

MTR_250319_003.indd 3

a meeting last weekend, where its solicitors advised members on their rights “and to initiate legal action given the failure of Duncan Adams to consult on their redundancies”.

Lyon said: “If they were going to close the business in an orderly way then they would give notice of redundancy.

“But because the company suddenly goes to the wall, almost overnight, then there’s no real opportunity for the employer to consult. Obviously they must have known this was coming, though.

“Those cases will be pursued and will take a few months,” he added.

Cardiff Council fourth to reject option of CAZ Cardiff was set to become the fourth city to reject using a feecharging clean air zone (CAZ) to cut pollution levels as MT went to press.

Rather than introducing a charging CAZ, Cardiff Council is proposing to spend £32m to upgrade the city’s buses and taxis to Euro-6 standard, as well as improve traffic flow in the city centre.

If approved as expected, Cardiff will follow in the footsteps of Nottingham, Derby and Southampton in rejecting the CAZ model to combat pollution levels.

In a statement on its website the council said it had rejected the option of a charging CAZ because “guidance by the UK Government Joint Air Quality Unit clearly states that a charging clean air zone should only be implemented if noncharging alternatives are found to be inefficient to bring compliance in the shortest time possible”.

The council will be seeking funding from the Welsh government.

RHA policy director Duncan Buchanan said: “We welcome this approach by Cardiff which is the right way to deal with the problem rather than introducing a CAZ, which is a cherry-picking approach that does not solve the problem of pollution and is nothing more than a tax.”

Woods felled by fuel costs

The administrator for Woods (Haulage) has confirmed that fuel costs were one of the reasons why the Birmingham transport company ultimately failed (MT 25 February).

The former member of The Pallet Network appointed Duff & Phelps as administrator on 11 February and, after struggling to find a new owner, it is now in the process of closing the business.

MotorTransport 3

21/03/2019 12:49:34

News

motortransport.co.uk

Massey Wilcox Transport MD says driver shortage is a major challenge facing his Chilcompton-based firm

Call for loan to tackle driver shortage

By Chris Tindall

tices to drive rigids.

Wilcox said the driver shortage was one of the major challenges faced by the family firm, which is based in Chilcompton, near Bath. “We don’t need apprentices, we need drivers and we need them now. The government is happy to hand out £9,000 a year to university students and yet it would only take one loan of £3,000 to enable a young person to become an HGV driver in a matter of months, turning

Massey Wilcox Transport is calling on the government to tackle the driver shortage crisis by introducing a loan scheme for trainee HGV drivers, which would operate in a similar way to the student loan system.

MD Robert Wilcox, pictured, says the scheme would address the driver shortage more rapidly than the year-long Large Goods Vehicle Driver Apprenticeship, which at present only qualifies appren-

them into fully employed drivers earning £650 a week and paying national insurance and tax, which also benefits the country.”

Last year saw a 31% fall in the take-up of driving goods vehicles apprenticeships, which includes the Large Goods Vehicle apprenticeship, according to government figures. Despite the challenges posed by the driver shortage, Massey Wilcox Transport’s latest annual results reveal that

pre-tax profit leapt 21% to £840,890 (2017: £692,943) in the year to 31 May 2018.

Turnover rose 3.7% to £11.1m (2017: £10.7m).

Wilcox said the rise in pretax profit had been driven largely by picking up new business. “A lot of new business has come from recommendations or from customers whose existing arrangements have failed – there are, sadly, a lot of family haulage businesses going out of business,” he said.

End of the road for haulier Richard Read (Transport) as profit margins shrink Gloucestershire-based Richard Read (Transport) is to close its transport business at the end of the month because it can no longer see a way to run it profitably.

A statement from the haulier said: “It is with a heavy heart we announce that

Richard Read (Transport) is to cease trading.

“During the past 18 months we have made valiant efforts to restructure the business and focus attentions on our core activities of transport and pallet network services.

“We have been successful

in expanding our customer base, boosting volumes and increasing sales.

“Unfortunately, the financial results of trading in 2018 have been very disappointing, largely due to shrinking margins and rising overheads.

“It remains a constant battle to be competitive while at the same time running decent trucks, to attract and keep a skilled workforce and remain compliant with all legislative requirements of the haulage industry,” it said.

It added that its forecast for

2019 suggested a similar outcome and that the firm is not in administration or insolvent.

The firm recorded a turnover of £5m in the year ending 30 April 2017 (2016: £5.2m), and a loss of £35,683 (against a profit of £159,216 in 2016).

SEE THE FUTURE TODAY.

All will be revealed at the CV Show.

MTR_250319_004-005.indd 4

21/03/2019 12:55:38

News

motortransport.co.uk

Bowring profit down by 25% Diesel price increases, along with depreciation charges due to Bowring Transport’s fleet renewal programme, saw pre-tax profit in the company’s haulage division fall by 25% last year.

In the year to 31 May 2018, the Mansfieldbased company revealed that, despite a 5.5% rise in turnover in its haulage division to £12.9m (2016: £12.2m), its pre-tax profit fell to £1.2m (2017: £1.6m).

The company said diesel prices had added to increased operational costs, up from £2.2m to £2.6m year-on-year.

Despite this, Bowring said infrastructure, building construction, manufacturing and farming “continued to generate significant demand for the company’s haulage services”.

CMA CGM holds 90% of firm after shareholders ignore board’s value warning

CEVA set for new ownership French shipping firm CMA CGM is set to take over CEVA Logistics after building an almost 90% shareholding in the company following a public tender launched earlier this year.

When the offer was launched in January, CEVA Logistics, which is headquartered in Baar, Switzerland, called on shareholders to decline CMA CGM’s offer of CHF30 (£23) per share, which it said undervalued the company by a third.

However the operator revealed this week that the call fell on deaf ears with the public tender seeing CMA CGM acquire 89.47% of its shares, significantly increasing its shareholding from the preoffer amount of 33%.

As a result, CEVA Logistics last week (19 March) recommended that remaining shareholders tender their shares during an additional offer

period, which runs from 20 March to 2 April, or face a “squeeze out” by CMA CGM. Squeeze-out tactics include termination of employment of shareholding staff, or the refusal to declare a dividend by the majority shareholder.

The statement warned: “CEVA acknowledges that CMA CGM is likely to hold, after settlement of the offer, a percentage of the share capital and voting rights of CEVA that would allow CMA CGM to

implement a squeeze-out.

“CEVA would therefore apply for a delisting of its shares from the SIX Swiss Exchange.

“Consequently, CEVA’s board of directors has decided to recommend that remaining shareholders tender their shares during the upcoming additional offer period, which will commence on 20 March 2019 and close on 2 April 2019.”

It added that CEVA board members are also expected to

tender their shares and that the board will propose that CMA CGM chief executive Rodolphe Saadé become CEVA Logistics chairman with the current CEVA Logistics chairman Rolf Watter acting as vice-chairman.

“It is further expected that CMA CGM will retain three independent members of the board of directors of CEVA for the time being,” the statement added.

A CEVA Logistics spokesman said it would be business as usual at its UK division and that the takeover would offer more opportunities to the group.

He said: “The change of ownership structure will not change the way we operate.

There will be more crossselling between CEVA and CMA CGM with the view of generating more business in all our regions. CEVA UK will continue to operate as usual.”

Hall 5, Stand D10 NEC Birmingham, 30 April – 2 May 2019

MTR_250319_004-005.indd 5

21/03/2019 12:56:00

News

motortransport.co.uk

Sky-high vehicle import tariffs would be a possibility in the event of a no-deal Brexit, warn truck makers

Brexit could cripple hauliers

By Chris Tindall

Leaving the EU without a deal would be “absolutely dreadful” for truck makers and buyers alike, making new vehicle acquisition prohibitively expensive, according to manufacturers.

With the threat of crashing out of the EU still a possibility, there are mounting concerns at the sky-high vehicle import tariffs that will come into play in the event of no deal.

Government plans include slapping 22% on the cost of importing a new HGV from mainland Europe from 11pm on 29 March for up to 12 months.

Isuzu Trucks UK MD Pete Murphy said he did not understand why the government had sought to protect the car industry with tariffs of 10% yet truck makers were facing an extra 12% on top.

The company’s Grafter model is made in Japan and assembled for the UK market in Verona, Italy.

“When you consider chassis cabs are designed to deliver products, and in some cases deliver essential products, why

is there a 12% uplift?

Particularly for vehicles used to deliver in multidrop, ultraurban environments – the same environment where the government is looking for an increase in air quality,” he said.

Murphy added: “It’s absolutely dreadful news. It’s supposed to be a temporary measure applied until an agreement is reached with the EU. We will have stagnation of the industry. Anyone who can wait until the tariffs are removed will do that.”

Massive burden

Scania also referenced the effect of the tariffs on tackling air pollution. Martin Hay, MD of Scania (Great Britain), said: “We agree this potentially places a massive burden on industry and makes it even more difficult for hauliers to comply with clean air zones if they currently run older vehicles and need to upgrade to Euro-6.”

DAF Trucks assembles the majority of its UK-registered vehicles in the UK and believes it won’t be subject to the full import tariff. However, Phil

Moon, DAF Trucks marketing manager, told MT: “We continue to hope for a deal.

Tariffs are just one aspect of it, obviously. The potential implications for the overall economy of a no-deal scenario are things we want to avoid.”

There are other consequences for the overall economy and UK truck market in general that might bring more uncertainty.

“It could slow down the natural replacement cycle for older vehicles. It’s not necessarily good news for a manufacturer, even with a UK manufacturing base.”

The RHA described the situation as “ludicrous” and said 22% tariffs would cripple UK hauliers, with many businesses already struggling to make ends meet on profit margins around 2%.

Richard Burnett, RHA chief executive, said: “There is no sensible scale to these increases. They range from a 10% tariff for a vehicle under five tonnes, while anything over – with the exception of special purpose vehicles – will be charged at 22%.

“With the average price of a tractor unit with an engine rating of Euro-6 starting at around £85,000, the prospect of paying more than £100,000 for a new truck will, for many, make new vehicle acquisition almost impossible.

“UK hauliers, particularly those already at a loss as regards future border crossing processes, will now be faced with massive, additional financial burdens.

The final straw

“For those who can afford these excessive tariffs, they will have no alternative but to increase their rates by a substantial amount. For those unable to pass the additional cost on, there’s a real risk Brexit will be the final straw.”

Dave Ashford, transport director at KBC Logistics in Purfleet, agreed that some hauliers would struggle to sustain such high cost increases.

“We always buy two or three years old, however I am sure the cost of new will have an effect on used prices in due course.

“With the changes in London emissions and other cities to follow suit, I am sure some will throw in the towel,” he said.

He added: “I have sincere worries. I have to inform senior colleagues in Japan of the various scenarios that could play out and some of it, I wouldn’t blame them for not believing me.”

Murphy said Isuzu Trucks had put in place contingency plans in an attempt to mitigate the effect of tariffs and added: “I am pinning my hopes on either her [the prime minister’s] plans for a third vote being successful, or there’s a significant delay and in the meantime there are real productive negotiations.”

Murphy added: “We have a smaller range of vehicles that have a 1.9-litre engine and they would be [subject to] 10% just like cars would be, but that’s our 3.5-tonne product range.

“We have another 3.5-tonne product with a bigger engine and suddenly that will cost an extra 22%. And everything after that up to 13.5 tonnes will be 22%.”

FOOD FOR THOUGHT: Asco Foods has sealed a contract hire and maintenance deal with Prohire for two 26-tonne Mercedes-Benz Actros vehicles and a DAF 18-tonner. Asco Foods director Sunny Chadha (pictured) said the deal was in response to the firm’s increasing volumes of bulk goods. “That has resulted in needing the right payload and the ability to have the flexibility of ambient, frozen and chilled products in any pallet configuration,” he said. He added that the inclusion of a full maintenance package was another key factor in sealing the deal. “The preference is to use a one-stop shop like Prohire that can offer support for the flexibility we need,” he said, pointing to Prohire’s ability to supply replacement vehicles “as and when needed” as an example.

6 MotorTransport MTR_250319_006.indd 6

25.3.19

21/03/2019 12:38:05

THE CVTHE SHOW 2019 CV SHOW 2019 30 APRIL - 2 MAY • NEC • BIRMINGHAM THE UK’S LARGEST C OMMERCIAL VEHICLE SHOW

30 APRIL - 2 MAY • NEC • BIRMINGHAM THE UK’S LARGEST C OMMERCIAL VEHICLE SHOW

The showroom for excellence One event. Three days. Build your industry knowledge at The Commercial Vehicle Show 2019 in an interactive way. Explore the latest products and developments in the show halls and discover the dedicated Cool and Workshop zones.

The showroom for excellence

One event. Three days. Build your industry knowledge at The Commercial Vehicle Show The Commercial Vehicle Show 2019 is Explore the showroom forproducts excellence, an ideal 2019 in an interactive way. the latest andproviding developments in the show halls opportunityand to network and engage. discover the dedicated Cool and Workshop zones.

Visit us at the Birmingham, Tuesday Thursday 2nd 2019. providing an ideal TheNEC Commercial Vehicle Show 30th 2019April is the– showroom for May excellence, opportunity to network and engage.

Get2nd your FREE ticket. Register today www.cvshow.com @TheCVShow Visit us at the NEC Birmingham, Tuesday 30th April – Thursday May 2019.

@TheCVShow AD_250319__P7.indd 7

Get your FREE ticket. Register today www.cvshow.com 21/03/2019 09:13:23

News

motortransport.co.uk

Co Durham car transporter warns that more operators will fail as it closes doors

Beamish Transport folds as UK car sales slump

By Chris Tindall

Car transporter Beamish Transport has ceased trading following the downturn in the car industry and uncertainty surrounding Brexit.

The Co Durham firm appointed administrators from KSA Group earlier this month (8 March) to achieve “an orderly closure”.

Beamish Transport operations manager Dominic Fisher said the decision was “massively sad” and meant making up to 76 drivers redundant, plus office staff.

He said: “The closure was due to the incredible ongoing pressure in the industry

caused by the diesel emissions scandal, which has severely damaged new car sales, and also the massive uncertainty from Brexit.

“Both factors have badly affected new car sales. It’s meant a 24% reduction in business, which has destroyed us,” Fisher said.

He added that the company had been working tirelessly for the past six weeks to avoid closing down, but had “reached the end of the line”.

“The government could see this coming, the whole motor industry is screaming at them and there’s been no response,” said Fisher.

“There’s been no help, no assistance, no nothing. We are one of six companies to have gone in the past few weeks. This is going to continue until it destroys a massive player.

“We are not a small company, but one of the really big players will fold and then maybe the government will act.”

Fisher added: “We feel very strongly about this. We are not bitter but we are aggrieved about what’s occurred because of the blind ignorance by the government.”

Beamish Transport had been trading since 1992 and

held a standard national licence authorising up to 45 HGVs and 45 trailers out of five operating centres across the North East.

Administrator Eric Walls at KSA Group said: “It is with great regret that the directors of Beamish Transport can confirm the company has appointed administrators.

“Eric Walls and Wayne Harrison of KSA Group have been appointed as joint administrators today.

“The company has been hit by the downturn in the car industry and also by the ongoing uncertainty surrounding Brexit.”

Scottish LEZ roadshow in town Need to find out more about the introduction of the forthcoming low-emission zones (LEZs) in Glasgow, Edinburgh, Dundee and Aberdeen?

Then put 26 March in your diary.

To explain how the new regulations will affect truck operators, MT has teamed up with Transport News to host a special Clean Air Roadshow to be held at Hampden Park, Glasgow on 26 March.

You’ll hear from policymakers, technical experts and vehicle suppliers as we guide you through the preparation plans for these important new rules that come into force from next year.

To register for this free-toattend event, simply visit cleanairroadshows.co.uk.

Exhibitor enquiries to tim. george@roadtransport.com.

Bushell snaps up Aspray Group Loss-making Aspray Group has been acquired by Bushell Investment Group.

Bushell said the buyout came after months of discussions between the two parties.

Aspray Group – which is

8 MotorTransport MTR_250319_008new.indd 8

made up of three divisions: Aspray24 (registered as Aspray Transport at Companies House); Aspray Logistics; and Aspray International – was previously owned by holding company Nationworld.

Lee Bushell, CEO of Bushell Investment Group, which is based in Birmingham, said: “The Aspray Group is an incredible local business with global reach. We are thrilled to be working with it to help drive future growth and ensure this business reaches its full potential.”

Aspray CEO Pat Laight said: “We’re delighted to be working with the Bushell Investment Group team and know they will bring fresh thinking and strategies to our business.”

Laight will become group chairman post-deal.

Former Aspray24 MD and Nationworld CEO Stuart Laight left the business late last year. Group sales and marketing director Andy Gadsden and director Mark Jones have also stepped down from their roles as directors at the firm, according to Companies House.

Off the back of its most recent accounts, Aspray24 (Aspray Transport) detailed a turnaround strategy in a trading year that saw a fall in turnover and the company register a pre-tax loss of £378,754 for the year ending 30 June 2017.

ALL CHANGE: EV Cargo has incorporated in the UK, according to documents published at Companies House. EmergeVest-owned EV Cargo broke cover last autumn as a new parent company and corporate brand pulling together a diverse portfolio of road transport businesses. These comprise NFT Distribution, CM Downton, Palletforce software firm Adjuno, freight-forwarder Allport Cargo Services and 4PL Jigsaw. However, it was not a legal entity in the UK until this point and its parent company, Zarin's EmergeVest, is an investment firm registered in Hong Kong. Following incorporation, EV Cargo UK Holdings’ registered address is listed as Clover Nook Industrial Estate in Alfreton in the East Midlands, which it shares with NFT Distribution. Heath Zarin, pictured, is listed as EV Cargo’s sole director, having been appointed on 7 February.

25.3.19

21/03/2019 12:44:22

SITUATED JUST OFF THE M1, SOUTH OF DERBY

RER STANDS FACTU U N MA

KS UC TR

LIV EA CT IO N

AR EN A

HU GE MU SI C

LI NE -U P

00 1,0

OW SH

FULL R ACE P ROG RAM ME

FEATURING THE BRITISH TRUCK RACING ASSOCIATION CHAMPIONSHIP

SEE WWW.CONVOYINTHEPARK.COM FOR THE FULL LINE-UP! WEEKEND ADMISSION (ONLINE*/GATE) £32/£40 EACH DAY ADMISSION (ONLINE*/GATE) £20/£25

In association with

CHILDREN UNDER 13 GO FREE

DONINGTON-PARK.CO.UK - 0843 453 9000 *Advance tickets available until midday Thu 8 August. Postage fee applies. Calls will cost 7p per minute plus your telephone company’s access charge.

AD_250319__P9.indd 9

21/03/2019 09:53:09

News RHA chief executive Richard Burnett says hauliers have been failed As this issue of MT goes to press, the implications of a no-deal Brexit for UK hauliers could be severe. Operators of the 40,000 or so British trucks that cross the Channel to the continent on a regular basis are just not ready.

Since the decision to leave the EU in June 2016, we have been in constant dialogue with government to establish the processes needed to ‘go it alone’.

Yet with only days to go, we are still in the dark.

Leaving with no deal will mean falling back on World Trade Organisation trade tariffs – increasing the price of imports and exports. If businesses must place tariffs on goods imported from the EU it could mean an increase in shop prices. And what about goods coming from mainland Europe arriving on time?

Manufacturers, particularly those running ‘just-in-time’ operations, could relocate to the EU to avoid delays in components coming across the border – hitting jobs and future investment.

A slowing down of the supply chain in terms of inbound volume will have

motortransport.co.uk

Government heads in th a detrimental effect on the economy.

Ours is a volume-based industry.

If that slows down and volumes collapse, the effect on secondary distribution, as well as inbound, will certainly be felt.

Two weeks ago, the government announced its plans to slap an additional 22% tariff on the cost of importing a new HGV from mainland Europe in the event of a no-deal Brexit.

Hauliers are already struggling to make ends meet. With the average price of a Euro-6 tractor unit starting at approximately £85,000, the prospect of paying more than £100,000 for a new truck will, for many, make new vehicle acquisition almost impossible.

Reconsider the tariffs

We have raised this issue with Greg Clark, secretary of state for business, energy and industrial strategy, asking that he urgently reconsiders the tariffs.

The demands being placed on UK hauliers are too great, and for the sake of the 85% SMEs in our sector who, between them, literally deliver the UK

economy, this tariff must not be introduced.

The government has already devolved responsibility for clean air zones and low emission zones to the regions, resulting in a completely unco-ordinated pricing structure. These latest charges are just another hammer blow to an industry already on its knees.

This is a ludicrous situation. UK hauliers, particularly those already at a loss regarding future border crossing processes, will now be faced with massive, additional financial burdens to add to their worries.

Those able to afford these excessive tariffs will have no alternative but to increase their rates by a substantial amount. And for those unable to pass on the additional costs, there is a real risk that a no-deal Brexit will be the final straw.

As far as the RHA is concerned, government’s approach, particularly that of the DfT, has been one of keeping its head in the sand.

The industry’s constant requests for clarity have been met with a constant stream of platitudes.

Each time our concerns have been met with the same response: that UK international hauliers have nothing to worry about.

In March last year, responding to the warning that additional customs checks at Dover would add about 10 miles to the queues at peak times for every additional minute’s worth of checks, transport secretary Chris Grayling said: “We will maintain a free-flowing border at Dover – we will not impose checks in the port. We don’t check lorries now – we’re not going to be checking lorries in Dover in the future.

“The only reason we would have queues at the border is if we put in place restrictions that created those queues – we are not going to do that.”

We were pleased to read the recent report from the Commons Public Accounts Committee that confirmed

FTA head of European and global policy Pauline Bastidon says industry must be ready for a no-deal Brexit

Images: Shutterstock

Preparing for all outcomes With days until the UK is scheduled to depart from the EU, the outcome of our future trading relationship with the 27 countries of the union remains uncertain. The votes in the House of Commons, which resulted in the rejection of the withdrawal agreement, a proposal for an extension, and willingness to remove a no-deal Brexit from the table, provided little clarity. As these votes are not legally binding – they simply indicate the will of the House – a no-deal outcome has not been ruled out, and Brexit has – as MT went to press – not yet been postponed.

Theresa May has formally requested a short extension to delay the departure date, but unless and until that is formally approved by the EU, the date for Brexit remains 29 March at 11pm BST. No-deal is still the legal default and could happen even if the request for an extension is granted.

This means that, for the moment, the FTA is advising members to continue to prepare for a no-deal outcome. Businesses should continue planning for a worst-case outcome for logistics and supply chains so that raw materials, goods and services continue 10 MotorTransport MTR_250319_010-011.indd 10

to reach those who need them with limited delays. The FTA strongly encourages its members to ignore the political noise and concentrate on preparing – as much as possible – for a no-deal outcome.

The logistics industry is the beating heart of the economy, reliant on a fully integrated supply chain that keeps our just-in-time economy functioning, and any break in the chain could have

significant implications across the UK. Logistics and supply chain managers could potentially face their biggest challenge in almost a generation. The reintroduction of customs formalities and food safety checks for trade with the EU, the restrictions placed and red tape imposed on transport operators, and the significant cost of reorganising the way we do logistics and manage supply chains, should not be underestimated.

The challenge for our members will be to turn sometimes incomplete government procedures into workable business processes to keep supply chains running in an efficient way.

This is not a trivial job, and the scale of the challenge should not be underestimated.

While the industry is prepared to work through the challenges a no-deal Brexit would undoubtedly bring, it is imperative that negotiators keep working towards an acceptable solution for both parties. The logistics industry needs sufficient time to learn, adapt to, and implement the necessary operational processes to comply with the announced procedures. It needs a

serious commitment from government that permanent road agreements, among others, are at the top of the agenda in its negotiations.

The FTA will continue supporting its 17,000 members in their efforts to prepare for Brexit. To help operators understand and adapt to the changing international landscape, it has launched a Brexit information service to keep subscribers up to date with the latest developments in the logistics industry and to ensure their operations are as Brexit-proof as possible.

Efficient logistics is vital to keep Britain trading, and directly affects seven million people employed in the making, selling and moving of goods.

With Brexit, new technology, and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc.

A champion and challenger, the FTA speaks to government with one voice on behalf of the whole sector, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers.

25.3.19

21/03/2019 17:08:12

News

motortransport.co.uk

the sand “that our departments – in particular the Df T – have fallen woefully short in their preparations for the UK’s exit from the EU. “The department’s procurement approach has been rushed and risky and preparations have been conducted in secrecy with inadequate stakeholder engagement.”

Momentous decisions

It is obvious that the government has lost its way. Bad news when there are some momentous decisions to be made. Tens of thousands of UK hauliers responsible for keeping the supply chain between the UK and the rest of Europe are still in the dark, but because of government ineptitude they are simply not ready for such a momentous change.

British business is ultimately the responsibility of government. Yet as far as the road haulage industry – accountable for the movement of 98% of the UK economy – is concerned, they have clearly failed in their obligations.

Total cost of operation solution .

The Cartwright Group provide a complete solution, from design, manufacture, finance, rental & fleet management.

“We chose CARTWRIGHT for our latest substantial order because they were the only trailer manufacturer who could meet a very tight customer deadline.

We have been working closely with their engineering team and the quality of CARTWRIGHT’s trailers is outstanding” Mark Matkin , Group Fleet Manager, CULINA

curtainsider | double deck | vehicle bodies | temperature controlled | box | urban delivery | flat bed

Innovation . It’s in our DNA .

GROUP

t: 0161 928 0966 | e: sales@cartwright-group.co.uk | www.cartwright-group.co.uk

25.3.19

MTR_250319_010-011.indd 11

MotorTransport 11

21/03/2019 17:08:48

Focus urban

motortransport.co.uk

Exemptions offer local hauliers more time to become compliant

Birmingham gets go-ahead for CAZ

By Carol Millett

Image: Shutterstock

The government has given Birmingham City Council the green light to roll out a charging clean air zone (CAZ) and has approved £38m of mitigation funding, including £10m to help local hauliers and coach operators upgrade their fleets to the required Euro-6 standard.

While announcing government approval for its plan, the council also confirmed it will be granting a number of exemptions for eligible hauliers.

The exemptions will cover

hauliers with HGVs registered within the CAZ who will get an exemption for two HGVs for one year. Hauliers with non-compliant HGVs registered within the Birmingham area, which have an existing finance agreement beyond 2020, will also be allowed to run two of these vehicles into the zone for one year.

FTA welcomed the measures. Chris Yarsley, FTA Midlands policy manager, said: “Birmingham City Council has bucked the trend set by other cities across the country to produce an air quality plan

that protects the health of its citizens as well as that of the local economy.

“Following a succession of disastrous CAZ proposals in cities including Bath, Leeds and Manchester, which all failed to consider the needs of local and small business, FTA is pleased Birmingham City Council has taken its advice on board when formulating its plans.

“By granting a one-year exemption for commercial vehicles currently registered within the zone, or those registered in the wider Birmingham area which have an existing finance agreement beyond 2020, it recognises the financial burden that prematurely upgrading vehicles places upon local or small businesses.”

The zone, due to come into effect from January 2020, will cover all roads within the A4540 Middleway ring road.

Non-compliant private cars, taxis and vans will be charged £8 per day to enter, while noncompliant HGVs, coaches and buses will be charged £50 per day.

London takes action on freight movement Mayor of London Sadiq Khan and TfL have launched an action plan for managing freight movements in the capital, which they say have increased by around 20% since 2010.

The Mayor’s Freight and Servicing Action Plan sets out actions focusing on goods vehicle safety, emissions and efficiency.

It aims to ensure the freight sector is able to meet the needs of London’s growing population, while reducing central area goods movements in the morning peak by 10% by 2026.

Trucks and vans currently account for around one fifth of road traffic in London and about one third in central London during the morning peak, when more people walk, cycle and use public transport.

12 MotorTransport MTR_250319_012.indd 12

TfL research shows that HGVs are involved in 63% of fatal collisions with cyclists and 25% of fatal collisions with pedestrians, despite only making up 4% of the overall miles driven in the capital.

The research also reveals that goods vehicles account for around a third of all NOx emissions in the capital.

Key actions include: n Working with boroughs to better co-ordinate the control of freight movements, including supporting London Councils’ review of the London Lorry Control Scheme; n Tackling emissions through the launch of the Ultra Low Emission Zone next month and supporting boroughs in rolling out local zero-emission zones, with a clear guidance process for them to follow to ensure consistency;

n Launching the HGV Safety Permit Scheme, incorporating a Direct Vision Standard for HGVs, with the first permits to be issued later this year. n Ensuring land is available for urban logistics use and a London-wide network of micro-distribution networks to reduce road miles and encourage cleaner last-mile delivery methods.

Alex Williams, TfL’s director of city planning, said: “As London continues to grow, we all need to think about how we can keep freight moving while tackling toxic air and congestion and reducing danger to vulnerable road users. We will continue to work closely with our partners and people across the capital to make our vision for cleaner and safer freight a reality.”

LoCITY lowdown Preparing for London’s Ultra Low Emission Zone on 8 April First Mile is a waste and recycling company offering an environmentally friendly service to more than 25,000 customers, predominantly in London and Birmingham.

Founder and CEO Bruce Bratley is passionate about the environment and intent on making recycling hassle-free for businesses, in turn helping them to be more sustainable.

As part of the company’s strategy to be an ethical and sustainable business, First Mile continually invests in its fleet, ensuring that its 74 vehicles have minimal environmental impact. Prior to the first announcement of the ULEZ in 2014, First Mile was already looking at how to reduce emissions and improve the efficiency of its fleet.

Upgrading a fleet can be an expensive and arduous task, and one not to be taken lightly. Michal Szuminski, transport manager at First Mile, said: “We had tried and tested a number of different low- and zero-emission vehicles as early as 2009 – some of which were more successful than others. We learned the hard way by investing in some early electric models that broke down beyond repair within the first few weeks.

“It’s necessary to undertake numerous tests, demonstrations and surveys in order to determine what type of vehicle is right for a particular role within a fleet, and to help achieve the overall environmental and service objectives of the company.”

Following the first ULEZ announcement in 2014, First Mile became an early adopter of Euro-6 trucks through the purchase of a DAF LF. These vehicles have been instrumental in helping First Mile reduce its emissions in London, particularly that of NOx and particulate matter.

Throughout 2015 and 2016 First Mile continued to invest in a new low-emission fleet, which included an electric delivery van.

In 2017, the business invested in more ULEZ-compliant vehicles, while also opening the award-winning Sacktory – the first London-based sack sorting facility. Not only did this lead to improved quality of recycling, but also dramatically cut CO2 emissions by reducing vehicle mileage and the number of vehicles on the road. It also succeeded in increasing capacity on collection rounds. In the same year First Mile introduced zero-emission delivery rounds through electric vehicles and a cargo bike that operates in central London.

First Mile now has a fully ULEZ-compliant fleet and continues to go beyond legislative requirements when it comes to lowering emissions through investing further in zero-emission vehicles, fully utilising the London-based sack sorting facility, and the consolidation of delivery and collection rounds.

Looking to the future, in 2020 First Mile is hoping to introduce a zero-emission collection vehicle to its fleet in order to move towards environmentally friendly collections, while also aiming for all deliveries to be zero emissions by 2021.

25.3.19

21/03/2019 15:04:39

THE NEW LAG NON-TIPPING POWDER TANKER IS NOW AVAILABLE NEW STOCK READY TO GO IN THE UK AVAILABLE TO BUY OR LEASE S AT

TU

VISI

0

5A6

9537

ND STA

Contact Peter Hughes for more details: 0113 289 7990 ƉĞƚĞƌ ŚƵŐŚĞƐΛƟƉĞƵƌŽƉĞ ĐŽŵ

00, 00, 4,2 ,0 4 h it W t and m heigh 4,600 m XL. 2 Code 4 6 2 1 EN

Custom-made The S.CS FIXED ROOF Curtainsider comes with a strong and durable body construction and has all the benefits of the bolted and galvanised chassis. The fixed aluminium roof and flat front fit perfectly into the UK and Irish logistics chain. www.cargobull.com/uk

AD_250319__P13.indd 13

21/03/2019 09:16:55

Viewpoint

motortransport.co.uk

Brexit chaos: cock up or conspiracy?

A Steve Hobson Editor Motor Transport

ppearing four days before 29 March, this issue of MT was supposed to be our Brexit special, bring you news and analysis of what the UK’s exit from the EU means for the logistics industry. But as MT went to press eight days before Brexit day, we are no clearer on how, when, or even if, we will in fact leave.

Despite months of the prime minister intoning ‘Brexit means Brexit’ still no one knows what Brexit really means and how we can square Brexit with the Good Friday Agreement circle.

The Irish border was always going to be a huge roadblock on the Brexit journey, and quite why it has taken two and a half years for everyone to finally realise this is a complete mystery.

Honouring the pledge to have no border between the UK and the EU once we left was impossible to reconcile with the stated aim of Brexit that was to take back control of the UK’s immigration and trade policies. Call it a back stop, regulatory alignment or whatever you like, it is a pig wearing lipstick – you can’t hide the fact it is still a pig.

It does make you wonder if this whole process has been one giant charade orchestrated by Theresa May. Unlike her Labour opposite number, May was an ardent remainer during the

2016 referendum. So has what appears to be a chaotic stumble towards 29 March been nothing more than a cunning plan to throw the whole question of Brexit back to the people in a second referendum, this time hoping we will get it right and vote to remain?

May’s most recent accusation that it is all the MPs’ fault that her deal has not been accepted looks designed to pave the way for a second referendum – if Parliament can’t decide what deal it wants but doesn’t want a no-deal Brexit, what else can the poor prime minister do?

Requesting an extension to the Brexit process could be a last, high-stakes throw of the dice because if the May withdrawal agreement is not approved by MPs – and why should it get through on a third vote after the Conservative Brexiteers twice made it clear they will never accept an indefinite backstop – and we do not get an extension then a no-deal Brexit on 29 March could be the outcome.

No one wants a no-deal but using the threat of it to blackmail MPs into voting for her deal could backfire on May. By the time you read this, it might all have been resolved and the path to Brexit will be smooth and clear. But I wouldn’t bet on it.

Brexit offers opportunities for our industry B Sir Mike Penning MP chairman, Road Freight and Logistics All-Party Parliamentary Group

rexit. The single biggest issue to affect the UK and its economy since the Second World War. It has the potential to significantly change the face of the UK haulage and logistics sector. There are many questions still unanswered. Preparations for leaving the EU are minimal and for the industry that keeps the supply chain – relied on by every individual and business – moving, this is concerning to say the least.

Leaving the EU in an organised and fully considered way has to be the priority. Brexit does, however, present some opportunities for our industry and the potential to review things that could work better for UK road haulage and the wider economy.

There are limitations in this sector, as not only is the industry answerable to the EU for now, there are many UN rules that have to be adhered to. There is also limited scope because of the need for freight to travel between borders.

Taking full and complete control of cabotage rules for EU hauliers is one example. We could allow cabotage under a permit system whereby an EU operator would have to buy a permit.

14 MotorTransport MTR_250319_014.indd 14

Additionally there would be more control over the road-user levy, which is currently capped under EU rules. This could be modified so that EU operators make more contribution for using UK roads than they do at present.

There is also scope to modify drivers’ hours regulations so that they can be simplified and easier for everyone to understand.

One example is setting our own rules for in-cab weekly rest, which presently we are unable to do.

We must also do more to train a UK-based workforce. At present we rely on 60,000 drivers and 120,000 warehouse operatives from outside the UK. Will our disconnect from Europe help?

What is really needed is a cohesive government that implements policy that works for this undervalued, but critically important sector.

Perhaps post-Brexit we might have that.

The newspaper for transport operators

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

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

Got something to say?

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

25.3.19

21/03/2019 14:17:15

Promoting the Business of Bulk Haulage 3OTH MAY – 1ST JUNE 2019 Harrogate Convention Centre, Yorkshire Tip-ex Tank-ex is the only national exhibition for the tipper, tanker and bulk haulage sectors in the UK and 2019 is shaping up to be its biggest and best show yet.

On show will be:

PLUS: Don’t miss our

THEY’RE BACK!

· All the latest tippers from every major truck manufacturer;

new seminar series focusing on sector safety and industry innovation. From Earned Recognition to alternatives fuels, we’ve got it covered!

The Tip-ex Tank-ex Awards 2019 will take place on Friday 31 May. Enter or make your nomination today at tipextankex.co.uk

· The best in bodybuilding innovation; · Top tanker technology for wet and dry bulk operators.

Exhibitor enquiries: Richard Bennett 07889 823 060 Richard.bennett@roadtransport.com

@tipextankex @tipextankex Tip-Ex Tank-Ex

Register for your FREE tickets at tipextankex.co.uk

AD_250319__P15.indd 15

21/03/2019 10:41:30

Finance

A new era of con

A different approach to mergers and acquisitions is being driven by changing market conditions. Laura Reeve reports

T

here has long been talk of consolidation in the transport and logistics sector, both within the pallet networks and in the wider haulage industry. Recently, it seems that not a month goes by without another announcement about some sort of merger or acquisition. What is particularly interesting about the current high level of M&A is the very different approaches taken to it.

While significant M&A activity has in the past come mainly from overseas players, such as XPO Logistics, DHL and Kuehne + Nagel buying into the UK, many of the recent moves have seen consolidation of existing UK-based operators. This is nothing new, of course, and over the past couple of decades there has been a series of high-profile deals including Culina’s move into ambient logistics with its purchase of Great Bear among other acquisitions, Maritime and Turners’ expansion in container haulage, and Bibby Distribution’s buying spree.

The most recent burst of M&A activity – including Eddie Stobart Logistics’ acquisition of TPN, iForce and Speedy Freight, the acquisitions by Kinaxia Group and EmergeVest, plus some activity by the pallet networks – looks a little different.

These changes, driven by changing market conditions, have been both strategic and opportunistic. Reasons cited in each case have been mainly building capability, building scale, or ensuring continuity of service. There has, of course, still been entry into the UK by overseas firms, such as Agro Merchants Group buying Grocontinental and Sawyers Transport.

Stuart Sewell, a director in KPMG’s corporate finance team, has operated in M&A for more than 20 years, primarily in the transport and logistics space. He explains: “What I see as a trend is the build of some quite large multiservice UK groups offering a spectrum of different supply chain solutions that give them different models, different speeds and perhaps even a broader brush of end-to-end solutions.

“There’s an increasing need for more flexible and different solutions that has been caused

16 MotorTransport MTR_250319_016-018.indd 16

by changes in the supply chain, particularly by e-commerce disruption. Different routes, different timescales and the need for stock visibility throughout the supply chain have all caused everything to be re-engineered.”

Re-engineering solutions

One example of this is EV Cargo, formed in November last year by private equity investor EmergeVest after it made a string of acquisitions in the UK over a five-year period. EV Cargo is a result of the consolidation of software firm Adjuno, freight-forwarder Allport Cargo Services, ambient distribution specialist CM Downton, temperature-controlled logistics operator NFT Distribution, 4PL Jigsaw and the Palletforce network.

Although EV Cargo has announced it is bringing the six businesses into “a unified corporate structure” it has been unclear what this will mean in practice. However, EV Cargo Holdings was incorporated at Companies House last month.

Sewell has some insight into the formation of the group, having worked with EmergeVest on acquiring NFT Distribution and Palletforce and acted for the Downton family during the sale of CM Downton. He sheds some light on the structure: “The businesses will continue to function as independent operations and brands because they do quite different things, but I do think they will absolutely work together where it makes sense. For example, looking at best practice across functions. It’s not going to be meshing them all together into one big network operation.”

EV Cargo has ambitious growth plans, which it says may be organic or acquisitive and may occur at business, divisional or group level.

Indeed, within the businesses that EmergeVest has bought to date, there have been further acquisitions with NFT Distribution buying NR Evans and Allport Cargo Services acquiring businesses in France and Germany.

EV Cargo chief executive Heath Zarin says: “The growth strategy is based around strengthening the business, strategically and operation-

ally, then developing business and revenue opportunities.” He also discloses that EV Cargo is targeting further strategic acquisitions in food supply chain value-added services, specialist freight forwarding and UK home-delivery fulfilment services.

The six EV Cargo companies function under four operating divisions: express, global forwarding, technology and logistics. Palletforce chief executive Michael Conroy heads the express segment and Clyde Buntrock from Allport Cargo Services oversees global forwarding, while Adjuno chief executive Craig Sears-Black takes charge of the technology division. Heath Zarin is chief executive of both EV Cargo as a whole and the logistics division, within which CM Downton, Jigsaw and NFT Distribution operate.

EV Cargo now has 9 million sq ft of warehousing space and about 5,000 employees, including 2,200 drivers. With Palletforce having 98 haulier members and 116 depots, the combined businesses have 175 UK operating centres and 18 overseas operations.

What remains to be seen is what Palletforce will do. When asked if he stands by his comments about the need for consolidation within the pallet networks, taking recent M&A activity into consideration, MD Michael Conroy says: “Palletforce is absolutely committed to leading consolidation of the sector and we’re best-placed to do that with capacity at our central super hub, [with] award-winning IT and the financial backing from EV Cargo. We are exploring a number of acquisition opportunities which would expand our offer and range of services in addition to pure network consolidation.”

Going back 10 years there were less-thansuccessful mergers within the parcel networks, such as City Link’s purchase of rival Target Express and the combination of Home Delivery Network with DHL’s B2B and B2C operations to form Yodel, which is yet to make a profit. So merging networks is now considered difficult and potentially very risky. According to KPMG’s Sewell, networks coming under common ownership is a more interesting concept. He thinks this is more likely, particularly when investors such as Eddie Stobart Logistics and EmergeVest bring such “deep pockets”.

The recent activity by Eddie Stobart Logistics 25.3.19

20/03/2019 10:19:18

onsolidation (ESL) is particularly interesting. The 3PL has acquired iForce and The Pallet Network (TPN), and now has a 50% stake in Speedy Freight.

Alex Laffey, CEO of ESL, says: “We are delighted to be able to invest in TPN as this significantly enhances the skills and capabilities of Eddie Stobart in a space that we currently do not operate in. Furthermore, it strengthens our position as a leading provider of end-to-end supply chain solutions.”

Despite its significant network resources, ESL wasn’t previously geared up for the one to five pallet delivery market and TPN has clearly enhanced this capability. Likewise, Speedy Freight offers accessibility to the growing demands of the express delivery sector. There is also an acknowledgement that TPN members provide a “competitive advantage” because of the experience each brings to ESL in final mile pallet deliveries. This fits with the concept outlined by KPMG’s Sewell, that broadening the service offering is one way to grow in a challenging marketplace.

If it’s clear what ESL gains from the arrangement, what’s in it for TPN’s members?

Evolvement

dropped to below 100p by February 2019.

The pallet networks have been known to carry out limited purchasing of long-standing members, but this has been to protect postcode coverage rather than for strategic reasons.

Palletways UK, for example, rescued longterm member Systematic Logistics International after it was placed into administration in November last year, and Palletline and Pall-Ex have both taken over member businesses to maintain full UK coverage when faced with owners retiring. Each confirmed that it is not actively seeking further acquisitions but will consider action where it is in the best interests of the network.

The reluctance of the current generation to take on family haulage firms is a real challenge for the industry and some acquisition activity has been to provide an exit for retiring business owners. This certainly seems to be the case in many of Kinaxia Logistics’ acquisitions. ➜ 18

Image: Tiger Trailers

Described by TPN MD Mark Duggan as an “evolvement” of the pallet network sector, the overall strategy for the move seems to be “mutual benefit” for ESL as the investor, TPN, its network members and their respective customers.

Duggan tells MT: “ESL is offering partnerships that work outside of and beyond the network.”

With the working relationship established, opportunities have arisen for TPN and its member hauliers, but Duggan is adamant that his network members are not under any obligation to accept ESL work if it doesn’t make

good business sense for them to do so. Duggan explains that ultimately the network’s “guiding principles” protect against simply taking on more volume.

He adds that TPN members are now in a position to bid for larger contracts with the backing of ESL, contracts that they individually would not have been capable of handling previously.

Sewell adds his opinion on ESL’s motives: “I don’t think it’s necessarily about crushing things together to make massive operational synergies per se because they’re different businesses and different models, so it’s probably more about identifying specific individual opportunities and then having the ability to look at best practice across the different operations.

“More extreme peaks, the increased need to be flexible, loads that might be smaller – putting everything through one big dedicated solution isn’t necessarily the most effective way to do things, so you can see you need a number of answers to serve your clients.”

Sid Hill, transport manager at one of TPN’s newest members, ICS Distribution, agrees.

He explains that, although ICS has only been a TPN member since January, ESL has already made a direct approach regarding full-load work. He says: “TPN is being clever in its member recruitment, seeking out bigger companies like ours that can do full-load work, rather than the traditional smaller hauliers.”

Hill believes this is something we will see more of in the future and adds: “The ESL acquisition was not a direct reason for us joining but it definitely gave peace of mind – if Stobarts are behind it then there’s something right.”

Investors so far remain to be convinced however – after floating on the AIM at 160p per share in April 2017, the ESL share price had

motortransport.co.uk

25.3.19

MotorTransport 17

Finance

Formed in 2012, it has now bought 11 companies.

Director Peter Fields explains: “The vision of Kinaxia Logistics is to build a flexible and efficient service-focused haulage and warehousing group through acquisition of medium-sized, profitable, growing, family-owned companies across the UK. There are a number of such companies where the shareholders are looking to sell some or all of their shares to facilitate retirement or as a means to take the business to the next level.”

Significant acquisitions

Of his long-term plan, Fields says he is working on a number of significant acquisitions which he expects will give the company full national coverage for both haulage and warehousing within the next 18 months. But Fields adds that any acquisition needs to fit with the company’s strategy of “colouring in the map”, as well as meeting its cultural and financial criteria. He also hints there could ultimately be a flotation, but that there is “no pressure or fixed timescale for this to happen” and it would be in the “distant future”, once Kinaxia reaches a certain size.

motortransport.co.uk

This aim of establishing full geographical coverage sounds very much like that of a pallet network, so could this be the development of a network under the radar?

While Fields concedes that this could be described as developing a network, it is one with limitations.

“One way to visualise the physical operation is Kinaxia companies being able to deliver pallets running along the strands of a web,” he says. “In this way, pallets can get from point A to point B without going via a hub but, instead, by running along the strands of the web that connect each spoke. Apart from reducing cost, a key benefit of this approach for customers is the minimisation of the number of pallet ‘touchpoints’.”

Fields adds that the companies work together in a combined approach to purchasing, servicing group customer contracts and operational efficiency/shared resources.

Kinaxia companies use a combination of direct deliveries, trailer swaps/trunking between group companies, and cross docking/exchanging cargoes, for example, at its Rugby depot

owned by Panic Transport.

Fields confirms that Kinaxia is committed to working with, and remaining in, any network an acquired company is a member of.

Where other investors are buying different but complementary businesses, Kinaxia’s acquisitions are generally similar in nature, making it more about scale than broadening the service offering. However, with the acquisitions of Mark Thompson Transport, AKW Global and Fresh Freight, it has also established a foothold in providing line haul, contract packing, refrigerated distribution and freight forwarding services.

After acquisition, Kinaxia subsidiaries share common systems and processes at an operational level, in “essential but time-consuming services” such as compliance, HR, training, recruitment, accounts and IT. All of these are managed centrally, enabling the subsidiaries to focus on customer service, operations and business development.

Kinaxia now has around 1,650 staff and an annual turnover of £170m. It operates 800 vehicles and has 1.8 million sq ft of warehouse space. The current pipeline of acquisitions is expected to take the group turnover to more than £250m within 18 months.

Ownership and operational control

A common theme throughout all of the investments is the desire to maintain the status quo when it comes to individual company identities.

Kinaxia shareholders are made up of the founders and previous owners and/or managers of the companies that have been acquired.

Although all the companies are wholly owned

by Kinaxia, each maintains its own P&L and continues to develop individually. There appears to be a focus on values and culture, with Fields calling the group a “family of families”. As with the acquisitions made by the pallet networks, Kinaxia seems committed to allowing any acquired business to keep its name, existing management structure, employees and operational independence.

What is clear is that we are in the midst of a significant change in the dynamics of the logistics sector, with organisations such as Kinaxia and EV Cargo representing a new ownership model for the SME section of the road transport market. ■ 18 MotorTransport

25.3.19

15TH MAY 2019, THE RICOH ARENA, COVENTRY

JOIN THE DEBATE AT...

EUROPE’S LARGEST ROAD TRANSPORT CONFERENCE

1200+ 50+

40+

DELEGATES

EXHIBITORS

SPEAKERS

POSSIBILITIES CONVERSATIONS SUCCESS STORIES

OPPORTUNITIES CONNECTIONS FASCINATING STANDS

INTELLIGENT INSIGHTS PRACTICAL TIPS FRESH APPROACHES

REGISTER NOW AT microliseconference.com

AD_250319__P19.indd 19

21/03/2019 09:24:57

Logistics

motortransport.co.uk

Housing shortage Years of undersupply and Brexit-related stockpiling is creating a serious capacity problem for companies seeking warehouse space in the UK. Simon Jack reports

W

Nagel Langdons has no spare capacity at any of its eight UK locations

hatever shape the UK’s trading relationship with the EU finally takes after Brexit, many companies have felt the need to stockpile goods as a short-term contingency against possible chaos at the ports. In the medium term, many will rethink their supply chains, often with major consequences for how they store and distribute products.

This comes after years of serious shortages in the warehouse market, and consequently there is hardly any space available. The UK Warehousing Association, for example, reported in January that three-quarters of warehouse owners had no spare capacity.

Alan Williams, a director of Davies Turner, which runs 11 major warehouses around the UK, says that the company is close to capacity after a rise in Brexit-related enquiries.

“With every new enquiry we have to look carefully as to whether we can take it on,” he says.

So far, however, in most cases the decision to take on extra space has been down to its customers planning ahead rather than panicking. “A lot of companies are building in two to six weeks of extra stock, which is often roughly equivalent to their Christmas schedule,” he says.

Richard Newbold, owner of Tilbury-based warehousing and handling business The Logistics Terminal, and the Returnloads transport exchange, which has a warehousing

20 MotorTransport MTR_250319_020-022.indd 20

POINTS OF ENTRY The need to plan for disruptions and take on extra space is partly down to the dependence on Dover and the Channel Tunnel as points of entry for ro-ro freight – if they face delays, disruptions to the supply chain are very likely.

In 2018, 2.5 million road haulage vehicles passed through Dover and 1.7 million trucks used Le Shuttle Freight.

The latest annual figures from the DfT, for 2017, showed that ro-ro traffic through Dover was the equivalent of the next five ports – Grimsby & Immingham, London, Belfast, Liverpool and Holyhead – put together.

Many believe it would be difficult to switch to other routes and services, such as short-sea containers, which would not have enough capacity. Davies Turner’s Alan Williams says: “Use of containers is not even going to touch what is needed.”

exchange section, says that although there is some space still available, there has been a reduction in recent months.

“There has been a definite slowdown over the past six months of product moving out of warehouses and therefore warehouses are having to hold onto stock for longer. This is

not purely down to stockpiling product, but is also due to lack of movement of product due to slow sales while the uncertainty of the Brexit negotiations is being sorted out,” he says.

The last few years have seen unprecedented demand for large warehouses, leading to shortages in the market – according to commercial real estate company Cushman & Wakefield take-up of buildings grew by 30% to 35.9 million sq ft during 2018, the highest for a decade.

There has been some easing of the situation recently, with Grade A supply rising by 25% during the year due to an increase in speculative development. However, much of the space that is available would be unsuitable for shortterm lets of the type needed for stockpiling – most new space, for example, would be available for a minimum of five or 10 years.

Cushman & Wakefield partner Simon Lloyd comments: “Stockpiling would require taking space on a short-term, flexible basis. Finding a letting for six to nine months would be quite challenging.”

Savills director Toby Green believes that retailers and manufacturers looking for space might be best off taking any spare warehousing available from 3PLs.

Strong market for landlords

“You would struggle to satisfy a requirement in the market for a short-term quick-fix solution. The market is strong from a landlord’s point of view and they do not need to ➜ 22 25.3.19

19/03/2019 14:16:03

MAKE A SPLASH IN YOUR INDUSTRY

BOOK YOUR PLACE AT THE 2019 MOTOR TRANSPORT AWARDS Motor Transport Awards 2019 | 3 July 2019 | Grosvenor House Hotel, London

MTAWARDS.CO.UK | #MTAWARDS2019 @motortransport

AD_250319__P21.indd 21

Motor Transport

@Motor_Transport

BOOK NOW Shortlist announced 15 April 2019

21/03/2019 09:26:40

Logistics

motortransport.co.uk

Exporters could set up facilities within the EU

Much of the UK’s warehouse stock is at capacity

do rash Brexit-related deals,” he says.

In some sectors, such as fresh food, there is even less leeway for those looking for extra space. Emile Naus, a director of logistics consultancy BearingPoint, says that this is because the just-in-time supply chain relies on cross-docking rather than storage. Fresh food might only spend a day in the warehouse.

“You won’t have the space to increase volumes much and the product won’t be as fresh when it gets on the shelf. There will therefore be a lot more waste,” he says.

Naus says there may be more opportunities to build up stocks of other types of product, however. For fast-moving consumer goods, which might be kept in a warehouse for a week, a few extra days’ worth would still be a significant increase in volumes.

“By contrast, if you have a warehouse with four months’ of stock, a few extra days’ worth is not going to be a problem,” he says.

Shane Brennan, chief executive of the Food Storage and Distribution Federation – whose members are mainly involved in handling chilled and frozen food – agrees that, by its nature, stockpiling will be impossible for chilled products.

“The aim of the chilled supply chain is to get fresh produce through to the end user as quickly as possible. There is absolutely no capacity for stockpiling,” he says.

Plan ahead

Instead of building in extra stock, companies need to plan ahead to cope with potential shortages. “They need to go through their range and assess the risk to each product and look for substitutes wherever possible,” he adds.

The prospect of stockpiling frozen food is more realistic in theory, but Brennan says that frozen food warehouses have been completely full since September.

Arran Osman, MD of frozen and fresh food logistics firm Nagel Langdons, also says that there is very little spare warehousing capacity within the sector. “Storage for frozen and chilled food is at an absolute premium. That is partly historic, but there is now the added impact of stockpiling,” he says.

Nagel Langdons itself has no spare capacity at all at its eight shared-user depots around the UK. However, Osman says that storage only makes up around 20% of the company’s activities, with the rest made up of cross-docking and transport on its 450-strong fleet.

He believes that stockpiling is not the best way to manage the transition to post-Brexit conditions. “It is not necessary provided the logistics provider has taken measures to make sure there is only a modest delay,” he says.

The company – part of the Nagel Group, which operates from more than 130 facilities around Europe – has published a series of advisory bulletins for its customers, emphasising the importance of getting the right paperwork and customer declarations in place.

Commodity codes

Davies Turner, which serves a range of sectors including retail and fashion, aviation and the automotive industry, is also strongly advising companies to check that their commodity codes are those specified by the government, and that they obtain an Economic Operator Registration and Identification (EORI) number, which could be necessary to export or import products.

22 MotorTransport MTR_250319_020-022.indd 22

Whatever short-term measures are necessary, there are also implications for the medium and long term. Naus says that companies may need to operate in an environment where crossborder movements are permanently more difficult and, as a consequence, review their network design.

That could mean an importer setting up a warehouse or even assembling products in the UK and for an exporter it could mean setting up a facility within the EU. “It’s not a question of here’s the problem, here’s an answer. It will depend on factors such as the type of product and where a company’s customers are,” he explains.

Williams says that if products are sourced and manufactured in Asia and sold in Europe it could make sense to open a facility within the EU. “There is certainly no one-size-fits-all.

Each client has different needs,” he says.

Property agents confirm that occupiers in Europe are looking at opening facilities in the UK and vice versa. “There are definitely anecdotal reports of that, but no deal flow as yet,” Green says.

Lloyd adds: “Companies are looking at what presence they will need but are waiting to see exactly what trade arrangements will be in place.”

The next few years will be challenging for warehouse users, but one certainty is that occupiers will have to adapt to changing circumstances and constantly review their warehousing needs. ■

OCCUPIERS STOCK UP Several major companies have built up stocks as a Brexit contingency plan.

Both Unilever and Premier Foods are among those that have said they are increasing supplies of either finished products or raw materials. Majestic Wine announced last November that it was planning to bring an extra £5m to £8m of additional inventory into the UK. Pets At Home, too, is building up extra stock – the company said in a recent trading statement that it is considering increasing its inventory holding by up to £8m as it monitors the Brexit process.

Terry Siddle, the company’s director of logistics and distribution, says that any additional stock is likely to involve a limited amount of extra warehousing from providers it uses in the run-up to Christmas, although much would be stored in its distribution centres in Stoke and Northampton.

“Most of the stock we are absorbing into our own network as we have capacity off peak. However, we anticipate using outside storage as we go through the spring.

“We have an ongoing arrangement with a provider for peak storage, which we have extended to give us extra capacity for the Brexit stock build,” he says.

BearingPoint’s Emile Naus believes it makes sense for companies to take this approach. “It’s a bit like building up a bit of extra stock as a precaution before putting in a new computer system,” he says.

25.3.19

19/03/2019 14:16:44

C

M

Y

CM

MY

CY

MY

K

AD_250319__P23.indd 23

21/03/2019 09:28:21

Cameras

motortransport.co.uk

Seeing is believing I

t’s easy to think of cameras as little more than visibility aids and, to a point, that’s exactly what they are. If you want to expand the view from the cab then there is no shortage of options, from a humble reversing aid to full-on 360-degree set-ups.

While they still perform such roles, cameras have graduated from pure visual assistance to the more common function of recording events to negate post-accident quibbles. However, they’re also used to complement telematics systems, encourage better driving standards and cut insurance bills, to the point where they are now mandatory requirements for certain forms of cover.

All of the above and more can apply, depend depending on the type of fleet and the operation, so if you’re new to cameras, or reviewing your current set-up, the first thing to do is establish exactly what you want from them.

“We liken it to having an alarm or a CCTV system,” says Smart Witness CEO Paul Singh. “Both are known to reduce your chances of being burgled, but they have different uses.

If somebody breaks in, one scares them

24 MotorTransport MTR_250319_024-026.indd 24

Cameras are becoming essential for truck fleets in fulfilling a variety of hi-tech roles. Jack Carfrae takes a closer look away; the other records them and provides evidence. So it’s important to work out what this technology is being used for: is it prevention or to provide evidence?”

Small and simple

Assuming it’s the monitoring aspect you’re after, Singh reckons SMEs with single-digit fleets can get by with a basic dashcam set-up, but there’s scope to scale up. “If you’ve got a small fleet of only two or three vehicles, you could go for a basic solution such as a forward-facing camera that just records, and is there to provide evidence should an accident take place.

“Going beyond entry-level, it’s a case of increasing the number of cameras and adding a monitor. By linking cameras to a tracking or video telematics platform further information can be obtained, which benefits fleet managers.

“For example, knowing where the vehicles are, and receiving alerts if a panic button is pressed or if a vehicle is out of a designated area or is in use out of designated hours.

If there’s an incident, that can be transmitted – with video – back to the fleet manager and on to an insurance company.”

If the objective is to improve visibility then building up the number of cameras is the obvi-

ous answer. There are many options, starting with a rudimentary reversing camera and becoming increasingly more sophisticated.

“Side cameras tend to be on the left-hand side in the UK, which is where you’re most likely to come across vulnerable road users,” says Brigade Electronics MD Tom Brett, “but a lot of trucks now have them on both sides, because it can help when you’re on dual carriageways and also if the truck’s going abroad.

“If you’re operating in tight spaces, the best thing is to have a 360-degree system – four cameras that give a bird’s eye view of the vehicle in one image on the monitor. Otherwise, you might only be able to see one image from one of the cameras on a monitor – or maybe two at a push. People often want to use the 360 on worksites, because there’s a lot of things happening and a lot of people moving about.

“We will commonly sell a digital recorder, two side-view cameras, a forward-facing camera and a rear-facing camera, so if there is an accident you’ve got a full view around the vehicle.”

It’s also possible to get the majority of the view around the front of the vehicle from one camera. Stoneridge’s Cornereye system has “a 270-degree view around the side of the truck, eliminating the blind spot,” according to marketing manager Victoria Tramma. ➜ 26 25.3.19

19/03/2019 14:29:17

s ow tu h si S 9 Vi CV 3A0 e th nd at sta

4 Cameras 1 Image 0 Blind Spots

®

Backeye 360 Intelligent, 360° camera monitor systems Backeye® 360 eliminates problem blind spots; potential dangers for anyone or anything in a vehicle’s path.

Digital images from four ultra wide-angle cameras are combined to create a 360°, bird’s-eye view of the vehicle, delivering a clear, real-time picture on the driver’s monitor, preventing accidents, saving money and lives.

brigade-electronics.com Call 01322 420300 or visit your stockist AD_250319__P25.indd 25

21/03/2019 14:03:51

Cameras

motortransport.co.uk

“For European left-hand drive vehicles, this would be mounted on the right-hand pillar of the truck and it gives you the class 5 and 6 views that are obligatory, but it also gives you a wider view than just those classes, for when you’re doing inner city and distribution driving, so that you can avoid blind spots when there’s pedestrians or cyclists coming up your inside.”

Probably familiar to anyone involved in the London Direct Vision Standards, the class views to which Tramma refers represent areas adjacent to the cab that drivers typically cannot see without assistance. Class 5 covers the blind spot alongside the offside door, while class 6 refers to the ground immediately in front of the cab.

The biggest area of growth for truck cameras is said to be connected devices, ie those that link to other systems and provide supplementary footage, rather than driver aids.

“It adds the final dimension to telematics, because a picture tells a thousand words,” says Vision Track MD Simon Marsh. “If you’re looking at telematics data, you might have behavioural indicators saying that your driver has accelerated or braked harshly, but you will never understand why. With the camera, you can see if he was accelerating to get out of somebody’s way or if he hit the brakes because somebody jumped in front of him.”

Insurance purposes

Marsh claims connected camera systems are increasingly important for insurance purposes, as some companies now require them before they will issue cover. For certain fleets, fitting such a system can be the difference between whether or not they’re insurable, because premiums could be stratospheric without them. Most camera specialists we spoke to reckon the insurance issue was among the main motivations for truck fleets to buy the equipment, while informing providers of accidents faster (known as first notification of loss) and ruling out ambiguous claims were also high on the agenda.

“We had one serious incident where, unfortunately, somebody was killed, but the police were actually able to review the footage on the scene,” continues Marsh. “The fleet manager was able to send the video straight away, and the driver was treated as a witness – not as a suspect – because the footage showed that it was 100% not his fault, so there’s a massive reason for protecting not just the vehicle but the driver as well.”

Camera systems start at little more than £100 for a basic dashcam arrangement, but chances are you’ll need to pay more than that for decent equipment, while greater and more complex operations obviously come with a bigger price tag, and you’re looking at monthly subscriptions for connected services. One thing not to skimp on with cameras, though, is the fitting, which is best left to electrical specialists,.

“Unless you get [cameras] fitted and installed properly, you could be letting yourself down.” explains Brett. “There’s no point having expensive kit and not getting it installed correctly.

Quite often, we find that the camera will get to an end user but maybe it hasn’t gone through an appropriate channel, and is installed by someone who isn’t really qualified to do the work – then you get a poor result. You need skilled auto electrical people to do that work.”

Look sharp

As for where truck cameras are heading, highdefinition feeds are now available and are expected to play a bigger role.

“You get a sharper resolution image on the monitor with HD,” says Brett. “You’re still going to see a car behind you, it’s just that the image will be a bit sharper. When you’re reviewing footage from an accident and a car’s speeding by, in 26 MotorTransport MTR_250319_024-026.indd 26

normal resolution you might not be able to pick up the number plate, but in HD you will.

You’ll be able to keep track of things like that much better, and gather more evidence from your system.”

Eye spy

Driver-facing cameras can now do fatigue monitoring, too, and they’re even sophisticated enough to detect if a driver is using a phone at the wheel. It’s also possible to let fleet managers know when such incidents take place, and this type of monitoring is tipped for serious growth in the near future.

“We’re doing vision warning and driver fatigue monitoring now, so the devices are actually smart enough to realise when somebody is starting to look distracted, falling asleep or using a mobile phone,” says Marsh.

“It will send a warning to the driver saying ‘you are using a mobile phone’ or ‘you are falling asleep’, but it also alerts about impending impacts. As soon as it picks up on the fact that [the truck is] getting too close to another vehicle, it will start to warn the driver.

“If the driver has got a propensity to do this, then the fleet manager can be alerted to it as well, so you can use some basic intelligence to work out what to alert the fleet manager to and what to ignore. In the next two or three years, that’s really going to boom, and it will be the way the bigger enterprise fleets go.” ■ 25.3.19

19/03/2019 14:29:56

AD_250319__P27.indd 27

21/03/2019 09:31:06

LIFTING BUSINESS

TOTALKARE AT THE CV SHOW: STAND 4E80

ONE VEHICLE AT A TIME

At TotalKare Heavy Duty Workshop Solutions we combine world class lifting products, industry leading VXSSRUW ¾H[LEOH ½QDQFLDO SDFNDJHV DQG &3' FHUWL½HG FRPSHWHQF\ WUDLQLQJ WR OLIW business one vehicle at a time.

CALL 0121 585 2724 VISIT WWW.TOTALKARE.CO.UK

AD_250319__P32.indd 32

21/03/2019 11:57:32