Motor Transport

Sharp ■ Informed ■ Challenging

29.10.18

NEWS INSIDE Chasing debt

Pallet-Track to have Canute wound up if it fails to pay p3

Cleaning up

Westminster waste lorry retrofit trial reduces N0x p4

Fresh air bid

Government passing CAZ buck, says Birmingham p6

OPERATORS IN THIS ISSUE

PREMIUM REDEFINED No-deal Brexit will leave international hauliers without enough permits to work in Europe

No deal, no EU way

CEVA Logistics ....................................p10 Canute Group ........................................p3 CitySprint ...........................................p16 Clipper Logistics..................................p26 DPD ...................................................p10 DSV ....................................................p10 Elddis Transport ....................................p8 Hermes..........................................p8/p22 John Lewis Partnership .......................p12 Meachers’ Global Logistics ....................p3 Veolia ...................................................p3

International hauliers face “Armageddon” if no deal is struck in regards to Brexit, industry commentators have warned.

The warning came as the DfT’s contingency plan for a no-deal Brexit revealed that hauliers working in mainland Europe will receive less than 5% of the licences they need to keep their wheels turning.

Of the estimated 38,000plus UK-registered trucks plying their trade between the UK and the EU, more than 95% will not qualify for the European Conference of Ministers of Transport (ECMT) permit. This is the permit that will replace the current European Community Licence if the UK crashes out of EU without a deal.

The ECMT permit system is quota driven with the EU assigning each country a set number of licences. The UK

Image: Shutterstock

By Carol Millett

has 1,240 permits, of which 984 are available on an annual basis and the rest monthly.

Although there are some open to HGVs that meet the Euro-5 emissions standard, most are for Euro-6 trucks. The permits must be displayed in each truck’s cab window.

The Df T has admitted that the few ECMT permits on offer will significantly exceed supply.

Kevin Hopper, MD of haulage firm Brian Yeardley Continental, said a no-deal Brexit would create an “Armageddon” for the haulage industry and the wider economy.

Hopper, who has attended Brexit planning meetings at the Df T, said: “In the 30 years I have been in the transport business for the first time ever I feel that I am not in control

of the destiny of my own business. That is in the hands of the government and it is not fit for purpose.

“It has no idea about this industry and seems incapable of understanding it.

Meanwhile, my people are asking me if their jobs are safe, but what can I tell them? If I can’t get the permits I need for my 60 trucks we will have a massive problem on our hands and so will the UK.” The RHA has warned that the resulting shortfall of UK lorries able to run to and from Europe could lead to massive delays in the delivery of essential goods such as food, clothing and medicines into the UK. It has also pointed out that the inevitable increase in bureaucracy is likely to see many EU hauliers removing themselves from the UK market, creating a supply chain shortfall that can’t be plugged.

Emergency plans in place to ditch UK border controls A no-deal Brexit will see UK border controls ditched and emergency measures put in place to mitigate queues, the National Audit Office (NAO) has said.

Regulatory and safety checks on agricultural and food-related products and other goods arriving from the EU will be waived for an unspecified time in the event of a no-deal, according to an

NAO report published today.

Emergency measures are already being put in place to cope with the border disruption that is expected, the report reveals.

The report, ‘The UK border: preparedness for exit’, looks at the preparations that government departments are making ahead of

Viewpoint

Urban

p14

Focus:

p16

Finance

Brexit to ensure there is a smooth transition.

It reports that the government has accepted that the border will be “less than optimal” in the event of a no-deal Brexit because there is not enough time to “put in place all of the infrastructure, systems and people required for immediate and p20

Interview:

Martijn

fully effective border operations”.

Instead, the government plans to prioritise security and flow of traffic over compliance activity in the short term, the report reveals.

To this end, it is planned that Defra will waive regulatory or safety checks on “most agricultural and foodrelated products and other goods arriving from the EU”. de

Lange

p22

MT

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Awards

winners

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25/10/2018 16:35:30

ER ST GI RE W O N

06/11/2018 | Alexandra Palace, London www.freightinthecity.com

MEETING THE URBAN LOGISTICS CHALLENGE If you are involved in delivering or receiving goods in towns and cities, then Freight in the City Expo is the must-attend event for you.

This free one-day Expo brings together the freight industry, businesses and local authorities all under one roof. You will hear from a line-up of industry pioneers and experts in a packed seminar programme about how they are already tackling the issues around urban deliveries.

In between seminar sessions, there will be plenty of time for you to browse Alexandra Palace’s Great Hall to meet leading suppliers showcasing the latest in clean, safe and quiet vehicle technology and equipment.

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Register for your FREE tickets at

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23/10/2018 08:37:24

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Pallet network makes formal bid to get Canute to settle debt of more than £47,000

Pallet-Track chases debt

By Chris Druce

Canute Group’s former pallet network is seeking to have the business wound up next month if it refuses to settle a bill of £47,489.35.

Pallet-Track served time on Canute Haulage Group in March this year as a member of its pallet network over concerns about its performance.

However, following Canute Haulage Group’s pre-pack administration in May, the new owner Almtone continued to put pallets through the network under a gentleman’s agreement, which saw it run up its current debt (MT 13 August).

Pallet-Track MD Nigel Parkes told MT: “We have served a statutory 21-day notice on Almtone. It is our intention if this is not contested to issue a winding-up petition on it.”

Parkes added: “It was clear in my opinion from the correspondence [and sometimes lack of it] that the pre-packed company Almtone had not recognised the importance of settling debts as a new business. It already suffered from a damaged reputation from the Canute collapse and the new business not paying its debts has left us with no alter-

native but to take legal action.”

According to a receipt seen

by MT, the statutory note was served at “12.55 hours today (15 October 18) by the papers being accepted by Julie Rowden of Michael J Ventham accountants on behalf of Almtone Ltd at 22a West Station Yard, Spital Road, Maldon, Essex CM9 6TS”.

Canute Haulage Group covered the CA, LA, TD, DG and RM postcodes for PalletTrack.

Responding to the PalletTrack action, Canute Group sales director David Emslie said: “The Pallet-Track [debt] will be settled in good time

before any necessity for a winding-up order.”

Almtone has county court judgments (CCJs) totalling £65,426 listed against it.

Canute Haulage Group owed more than £200,000 in CCJs when it entered administration in May. Michael Madigan, a director at A1 Direct Recruitment in Crawley, West Sussex, was owed £7,994 by Almtoneowned Canute Group. This increased to £8,404 after court fees were applied to a CCJ he sought against the operator – this figure is in addition to the £65,426 of CCJs listed at Companies House.

He contacted Trading Standards last week to accuse Canute Group of misrepresentation and was “dumbfounded” to receive a faster payment for the full amount he was owed at 7.25pm on the same day of his complaint, Friday (19 October). His firm was owed £4,900 when Canute Haulage Group went into administration in May, but this was paid after he refused to supply drivers for contracts until the bill was settled in full. “We’ve been given the run around over this despite ultimately getting paid,” Madigan told MT. “I feel sorry for others in the same boat, awaiting payment.”

Meachers’ biggest concern is Brexit Employment costs hit Meachers Global Logistics’ profit last year. But the Southampton company has deeper concerns about Brexit, according to chairman Bob Terris.

For the year to 31 May 2018, the logistics company, which is celebrating 60 years in business this year, reported a turnover of £26.2m (2017: £26.1m). Pre-tax profit was down 4.5% to £1.9m (2017: £2m).

Terris said he was happy with the results given the pressure on employment costs and the fact that Meachers’ profit margin remained above the industry average. He said: “There’s been a large increase in costs this year compared with previous years. To retain drivers and skills we have had recruitment costs and also we rely on agencies.”

Terris added that the company’s immediate concern was Brexit. “There’s a tremendous amount of uncertainty among customers and people in the industry,” he said. “More than 90% of our customers are foreign owned.”

He said one effect of the uncertainty was the increasing difficulty of buying vehicles.

“Nobody is building anything for stock. We are ordering trucks and trailers now for next March.”

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MotorTransport 3

25/10/2018 13:56:01

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RHA brands proposal for £100-a-day Bath clean air zone a disaster class, the council is exploring a range of local concessions. Also under consideration is a proposal to delay the introduction of charges for emergency service vehicles, recovery vehicles or breakdown trucks over 3,500kg, and vehicles in the general haulage vehicle tax class until 1 January 2025. It is also exploring support measures for local businesses, including a post-2021 project to retrofit Euro-4 and Euro-5 HGVs. The RHA is concerned that the proposed route takes in a section of the A36, a primary freight route for

Bath that effectively bypasses the city.

Chief executive Richard Burnett said: “The A36 is a significant route connecting Somerset with other parts of the country, but the £100 charges will see lorries displaced along local roads less suited to freight traffic. It’s clear the local authority has no understanding about how the supply chain works.

You can’t make it prohibitive for lorries to use a major route and hope there won’t be consequences.”

A public consultation on the proposals will run until 26 November.

Waste operator runs two ‘clean’ refuse collection lorries with Westminster City Council

RCV retrofit trial brings N0x levels down by 99%

By Hayley Pink

Waste operator Veolia has successfully trialled the first retrofit system for RCVs to be approved under the Clean Vehicle Retrofit Accreditation Scheme (CVRAS).

The scheme enables older vehicles to reach the Euro-6 emissions standards required

by London’s Ultra Low Emission Zone (ULEZ) and national clean air zones.

In partnership with Westminster City Council and retrofit firm Eminox, Veolia has been operating two Euro-5 refuse collection lorries fitted with the new technology in the capital and has reported a 99% reduction in NOx levels.

The system works by combining a diesel particulate filter with selective catalytic reduction and Amminex ASDS technology in what Eminox describes as “an industry first” for the RCV sector.

It is approved under the CVRAS for use on Euro-5 versions of the Dennis Eagle Elite with the Volvo D7C 7-litre engine and the Mercedes-Benz Econic 6.3-litre engine.

Pascal Hauret, regional director for Veolia London, said: “Veolia has been trialling low-emission vehicle technologies with industry leaders like Eminox since 2012, and we’re now ideally placed to support the shift to low emissions, improving air quality in 4 MotorTransport MTR_291018_004.indd 4

Westminster and beyond.

“We’re delighted to have worked with Westminster City Council and Eminox to lead the waste sector in adopting this technology, which represents a huge opportunity for cities across the country.”

Carlos Vicente, Eminox retrofit sales director, said: “The support from Westminster for this project has enabled us to collaborate with Veolia and Amminex to develop real-world Euro-6 ULEZ solutions for the most prestigious RCV fleet in the country.”

Eminox designed the technology after Westminster City Council committed to retrofit-

ting its vehicles with the invention, should it be successfully accredited under the CVRAS. The trial included lab testing as well as field testing on the two Westminster vehicles, which resulted in the technology receiving accreditation by Energy Saving Trust, which manages the CVRAS. Veolia’s two Westminster City Council vehicles used in the trial will continue to run with the installed system, while the rest of the fleet will be fitted ahead of the ULEZ starting in April 2019.

It is anticipated that more retrofit options will start to

emerge for the HGV market following a £2.5m government funding boost to stimulate the market and help more systems achieve accreditation.

■ Veolia UK fleet director Gary Clark will share the company’s experience in trialling alternative fuels and technologies when he appears at Freight in the City Expo on 6 November. Book at freightinthecity.com.

Shutterstock

The RHA has warned that Bath and North East Somerset Council’s proposals for a clean air zone (CAZ) charge across the city will be a disaster for hauliers.

The council has chosen a category D CAZ that will require all vehicles, including cars, to meet the minimum Euro-4 petrol or Euro-6 diesel emissions standards. Proposed charges for HGVs are £100 a day to enter the designated city centre zone.

In addition to the usual national CAZ exemptions such as military vehicles and those with a historical vehicle tax

Fed up with Felixstowe? Use northern ports Customers should snub Felixstowe Port, which has been struggling with attempts to resolve traffic congestion and slow turnaround times, in favour of nothern terminals chief executive of rival Peel Ports Mark Whitworth said.

Whitworth said retailers and importers needed to tell freight forwarders and shipping lines that “enough was enough”.

Felixstowe has been plagued with problems since it introduced a new IT system in June.

In July, the RHA demanded compensation for the delays suffered by hauliers, but the port’s owner Hutchinson Ports ruled this out.

Now Liverpool Port has waded into the row, highlighting retailers’ increased fees, increasing haulage prices and the prospect of job losses as reasons for avoiding the UK’s busiest container port.

Whitworth said: “Even before the current issues at Felixstowe it made complete sense to avoid the increasing congestion both at the southern ports and on the roads and railways used for bringing containers north.

“But the long delays at Felixstowe have now made it imperative for shipping companies and importers to think again. I’m calling on retailers to avoid a doomsday scenario for themselves, their staff and customers and demand they look north.”

A spokesman for Felixstowe port said it would not be responding to the comments.

29.10.18

25/10/2018 09:44:07

“WE’RE REGULARLY ACHIEVING AN AVERAGE OF OVER 11 MPG.” “I’ve just taken two new Scania R 450s. Like for like comparison with existing R 450s, we’re seeing a 1 mpg improvement. That’s an excellent fuel return over our annual 150,000 km. Driveability and modern feel are top of my agenda because driver retention is key. Our drivers love them.”

Paul Jackson, Managing Director Chiltern Cold Storage Group Ltd.

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25/10/2018 09:42:06

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Birmingham accuses government of passing the buck on clean air zones and asks for £36m to ease transition

We want to be a clean air city

By Steve Hobson

Birmingham City Council is reviewing the £100 per visit charge for pre-Euro-6 HGVs proposed for its Clean Air Zone (CAZ) planned for January 2020 and may reduce it when it submits its final plan to government at the end of 2018.

Speaking at the inaugural Birmingham Transport Conference organised by consultants Invergold Associates, Waseem Zaffar, the Labour cabinet member for transport and environment on Birmingham City Council, said the CAZ was being imposed on Birmingham by central government. He said it was “passing the buck” to cities, and while the council wanted to protect residents from the ill effects of poor air quality, this should not be at the expense of jobs and businesses in the city.

“We have not finalised the figures,” he confirmed. “We were basing them on London, but we will set the charges in our full business case in December.

We need a national approach to charging as we do not want the CAZ to damage business.”

Retrofit funding

Shutterstock

Birmingham is asking for £36m funding to help mitigate the effects of the CAZ on local businesses and residents, and is proposing to allocate £15,000 per HGV to either fund a retrofit or replacement to Euro-6 standards. “If we do not get the full £36m mitigation funding we will review the scheme,” said Zaffar. “We understand the pressure the speed of this is causing but that is down to the government.”

Zaffar said Birmingham was expanding and its population was expected to increase by 150,000 by 2031, resulting in a forecast two million more car journeys in a city already over-reliant on car transport as a result of significant under-investment in public transport.

“The city is blighted by health inequality,” said Zaffar. “There are 900 deaths a year linked to man-made air

6 MotorTransport MTR_291018_006.indd 6

pollution and transport contributes 80% of NOx emissions. NOx is the biggest challenge we are addressing with the CAZ.” He said studies showed that 60% of vehicles entering the proposed CAZ were compliant with the standards required, so only 40% would have to pay the charge or be upgraded.

The start of it

The UK is being forced by the EU to introduce measures to reduce NOx levels to the legal limit of 40 micro grammes/cu m of air. But Zaffar warned that achieving this limit by 2020 was “not where we stop, it’s where we start” and pressure would continue to move towards low and zero emissions vehicles. “This CAZ is just the start,” he said.

“We want to be a clean air city.”

Sylvia Broadley, Birmingham City Council’s air quality manager, went on to explain that Birmingham’s CAZ will be a category D zone affecting all vehi-

cles moving inside the A4540 ring road and enforced by automatic number plate recognition cameras.

She said the short period leading up to its introduction was due to the urgency imposed by the need to meet legal air quality standards after the government was taken to court and given just two years to act.

The council held a formal consultation in the summer that received more than 10,000 responses, but it is continuing to listen to representations as it finalises a plan for submission to government in December. “We acknowledge this is extremely challenging and we want to continue a dialogue with businesses,” Broadley said.

Vehicle upgrades

Responding to queries about the lack of availability of retrofit technology for HGVs, Broadley said the Clean Vehicle Retrofit Accreditation Scheme would soon be listing approved installers able to upgrade older vehicles to Euro-6.

The council is also proposing to exempt Euro-5 vehicles with existing finance arrangements from the charge for up to two years as they had “been bought in good faith”.

As part of its ultra-low emissions ambitions, Birmingham is creating the Tyseley Energy Park where hydrogen, biodiesel, LPG, CNG and electric vehicle charging will be available from April 2019. “We urge operators to go beyond Euro-6 and look at biodiesel,” said Broadley. “More sites are planned in the city centre and on key routes.”

EMULATOR USE ON DECLINE DVSA enforcement delivery manager Howard Forrester told the conference that after some well-publicised examples had been made of operators fitting AdBlue emulators that stopped emissions treatment systems working, their use was either on the decline or they were being better hidden from traffic examiners.

“I suspect it is the former because the cost of getting the treatment system working is small compared with the risk of losing an O-licence,” Forrester said.

Approximately 450 AdBlue cheat devices had been found across the UK. West Midlands traffic commissioner Nick Denton said operators coming before him after being caught using the devices had a variety of excuses.

“One said the vehicle never goes to London so it doesn’t need to comply with Euro-6,” he said.

“That argument is complete nonsense.”

Denton said that even if an operator bought a vehicle with a cheat device already fitted it should be obvious ”within a week” it was not using any AdBlue.

29.10.18

25/10/2018 11:53:05

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25/10/2018 09:44:02

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Palletforce boosts its presence in the north-east of England

Elddis Transport joins Palletforce

By Chris Druce

Elddis Transport has joined Palletforce after a 17-year hiatus from pallet networks.

Based in County Durham, Elddis runs a fleet of 160 vehicles out of nine hubs. It will cover postcodes in the Consett and Tyne Valley area for Palletforce.

Elddis joins Murray Hogg

(a founder Pall-Ex member), which became a Palletforce member in May, and longstanding member BM Stafford International Transport.

Palletforce said it had now significantly boosted its presence in the north-east of England.

Elddis MD Nigel Cook said: “This is the first time we have

been a member of a pallet network since 2001 [when it was in Palletways]. However, with customers increasingly looking for different solutions and our ongoing growth aspirations, it made sense for us to align with a network once again.

“It’s a crowded market, but all the feedback we received

was that Palletforce is the stand-out distribution network operating in the sector in terms of support, technology and investment.”

Palletforce chief executive Michael Conroy said: “Elddis Transport is a significant addition to the Palletforce network and a perfect fit for our membership.” n Palletforce, which won Best Use of Technology at this year’s MT Awards for its Super Forklift trucks, has introduced a new functionality, called the

Pallet Selfie. Using scanning and imaging software fitted to the forklifts, which are based at the network’s central Burton upon Trent hub, an image of each pallet is automatically taken during the handling process to allow members and customers alike to see the condition throughout.

Palletforce claimed that this function makes it the only pallet network able to weigh, photograph and scan every single pallet it handles in this way.

FORS hits a 10-year milestone FORS has reached 5,050 members in what is its 10th year of operation. Speaking to MT at the organisation’s annual conference in Birmingham (16 October), FORS director John Hix said the scheme would reach 5,200 members by the year-end. He said that there were now more members in the scheme at silver and gold level than there had ever been thanks to a culture that encourages progression.

"We want operators to go from the baseline bronze level, to feel comfortable with that, and then progress to silver and gold.”

FORS version five will go live in January next year and will include a focus on air quality and mitigating terrorist attacks in the transport supply chain.

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Hermes opens parcels depot

David McArdle. DG McArdle International Transport

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Hermes has opened a new 80,000sq ft parcels depot at Prologis Park in Hemel Hempstead ahead of its predicted “busiest peak season to date”.

The facility has the capacity to handle 130,000 parcels per day, to be distributed across the south-east and Midlands.

It is fitted with an array of green technology such as rainwater harvesting, multiple electric charging points and solar thermal hot water. In addition 50 new jobs will be created.

Hermes UK CEO Martijn de Lange said: “We are

extremely proud to officially open our state-of-the-art depot in Hemel Hempstead, which will significantly increase the network capacity in the southeast.

“This project demonstrates our commitment to environmentally friendly, world-class delivery solutions, not just for today, but for the foreseeable future.”

Hermes delivered approximately 9.7 million parcels during its busiest week last year and De Lange added “we expect that number to increase significantly this year”. n See page 22, Interview.

29.10.18

25/10/2018 13:46:58

Straight Torquing

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25/10/2018 09:51:12 19/10/2018 10:07

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Danes abandon purchase bid while â&#x20AC;&#x2DC;unwillingâ&#x20AC;&#x2122; CEVA board ponders proposal

DSVâ&#x20AC;&#x2122;s CEVA fever cools off after lukewarm response

By Chris Druce

DSV, based in Hedehusene, Denmark, has abandoned a bid to buy CEVA Logistics, citing a lukewarm reception to its revised offer as the reason for ending its interest in the Swiss multi-national.

In the UK both companies are listed in the MT Top 100 of the largest road transport companies. CEVA Logistics was 15th in last yearâ&#x20AC;&#x2122;s list with an annual turnover of ÂŁ394.5m, while DSV Road was 27th, with an annual turnover of ÂŁ180.7m.

A statement from DSV statement said it had made a revised proposal to CEVA Logistics on 18 October for CHF30 (ÂŁ23) per share. â&#x20AC;&#x153;The proposal would provide CEVA shareholders with a premium of 60.4% to CEVAâ&#x20AC;&#x2122;s share price of CHF18.70 as of 1 October 2018 and 45.8% to the 60-day volume weighted average price of CHF20.58 as of 1 October 2018. This revised proposal follows our company announcement dated 11 October 2018

[when the company confirmed a bid valued at CHF27.75]. â&#x20AC;&#x153;Based on the unwillingness of the board of directors of CEVA to engage directly with DSV at the price per share offered we have decided not to pursue an acquisition.â&#x20AC;?

CEVA responded: â&#x20AC;&#x153;The board of directors confirms having received a nonbinding letter of interest with an indicative offer price of CHF30 per share by DSV at the end of last week. â&#x20AC;&#x153;The board of directors has been analys-

ing, with the support of its advisors, diligently and seriously DSVâ&#x20AC;&#x2122;s proposal and engaged with the bidder to allow CEVA Logistics more time to review the new proposal. â&#x20AC;&#x153;While the CEVA Logisticsâ&#x20AC;&#x2122; board of directors was considering all the options in the interest of the company and all the shareholders and stakeholders, it notes the withdrawal of DSVâ&#x20AC;&#x2122;s proposal.â&#x20AC;? â&#x2013; DSV Road saw its profit increase by more than a fifth last year, driven by a 7.3% increase in turnover. It reported a turnover of ÂŁ193.9m in the year ending 31 December 2017 in the UK (2016: ÂŁ180.7m) and pre-tax profit up by 21.1% to ÂŁ9.8m (2016: ÂŁ8.1m).

The company said it was pleased with the results, but said the reduction in gross profit margin, from 18% in 2016 to 17% during the trading period, was â&#x20AC;&#x153;indicative of the increased pressure on the cost of key goods and services and is the subject of management focusâ&#x20AC;?.

FIRST AND LAST: DPD UK has opened its first all-electric last-mile delivery depot, in Westminster. The 5,000sq ft site, which can handle 2,000 parcels a day, is the first of eight all-electric depots planned across London. The next will open in Shoreditch next month, and DPD is searching for sites in Bayswater, Covent Garden, South Kensington, Marylebone, Barbican and Bank. Refurbishment at the facility cost ÂŁ500,000, and included a new charging system for the three types of electric vehicles to be used at the site: Mitsubishi Fuso e-Canters, Nissan eNV200s, and Paxsters.

Celebrating 10 years of best practice For ten years, FORS has helped drive-up operating standards in the transport industry. Over 5,000 FORS members from across the transport sector, their customers, vulnerable road users and WKH ZLGHU SXEOLF KDYH EHQHÂżWWHG IURP LQFUHDVHG VDIHW\ EHWWHU HIÂżFLHQF\ DQG D VKDUSHU IRFXV RQ WKH HQYLURQPHQW FORS members are setting the benchmark; FORS Bronze, Silver and Gold accreditation goes beyond legal minimum requirements, representing a progressive commitment to best practice â&#x20AC;&#x201C; today, and for decades to come.

Safety, Efficiency, Environment www.fors-online.org.uk 08448 09 09 44

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29.10.18

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25/10/2018 09:53:18 05/10/2018 15:26

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Gas-powered HGVs will cut CO2 emissions by 49,000 tonnes a year

JLP ditches diesel

By Hayley Pink

The John Lewis Partnership (JLP) will phase out dieselpowered HGVs by 2028. This will see the business introducing more than 500 biomethane-powered lorries across its Waitrose & Partners and John Lewis & Partners fleet. Once the fleet is fully converted, the move away from diesel will

save more than 49,000 tonnes of CO2 a year.

JLP has been trialling gaspowered trucks since 2015, with 61 in operation or about to be delivered as part of the Df Tâ&#x20AC;&#x2122;s Low Emission Freight and Logistics Trial. The trial also sees six Waitrose delivery trucks testing zero-emission refrigeration technology.

Justin Laney, JLP general manager of central transport, said: â&#x20AC;&#x153;We have been pioneering the adoption of longdistance biomethane trucks in the UK and scaling this up to our HGV fleet. This will deliver significant environmental and operational benefits.â&#x20AC;?

JLP sources its renewable

biomethane from CNG Fuels, which is poised to open a new public-access filling station this autumn off junction 16 of the M1 in Northampton, close to the retailerâ&#x20AC;&#x2122;s Magna Park headquarters.

n John Lewis will be speaking at Freight in the City Expo on 6 November about its emissions-reduction work at its flagship Oxford Street store.

To book your free place, go to expo.freightinthecity.com.

EU targets to cut HGV CO2 emissions by 2030 are â&#x20AC;&#x2DC;unachievableâ&#x20AC;&#x2122; Tough EU plans to cut CO2 emissions by 35% for new trucks by 2030 are unachievable, the European Automobile Manufacturersâ&#x20AC;&#x2122; Association (ACEA) has warned.

The statement followed a vote by the European Parliamentâ&#x20AC;&#x2122;s environment committee, setting out tougher CO2 reduction

targets in HGVs than those proposed by the European Commission in May. The original targets were for a mandatory 15% cut in CO2 emissions in new trucks by 2025 and a voluntary 30% cut by 2030.

However, the environment committee voted to increase these targets to a mandatory

20% cut by 2025 and a recommended 35% cut by 2030. The committee also voted to make it mandatory for manufacturers to ensure that 5% of all trucks sold in Europe are zero or low emission by 2025, rising to 20% by 2030.

ACEA called the 35% cut to truck CO2 levels â&#x20AC;&#x153;extremely

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stringentâ&#x20AC;?, arguing that the original proposal of a 30% cut was â&#x20AC;&#x153;already highly challengingâ&#x20AC;?. It believes a more realistic target would be a mandatory 7% cut by 2025 and a 15% cut by 2030.

ACEA secretary general Erik Jonnaert said: â&#x20AC;&#x153;These targets would pose major problems

as they do not take account of the realities of the truck market, nor the long development cycles for HGVs. MEPs should be aware that trucks that will hit the market in 2025 are already under development.â&#x20AC;?

The new targets will be put to a vote next month at the European Parliament.

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25/10/2018 09:55:24

Viewpoint

motortransport.co.uk

Deal or no deal, RHA chief executive Richard Burnett says the UK needs a transition period after 30 March 2019

Disruption will hurt transport What a shambles. With five months to go there is still no clarity for hauliers about the UK’s exit from the EU. The absence of that clarity for those in the supply chain means that very little can be done to make the all-important preparations that will be needed.

In the event of a no-deal, the RHA does not not believe that UK and EU businesses, or government agencies, can prepare for a frictionless border before 30 March next year. We are calling on the UK government and the EU to implement a transition period – deal or no deal.

We firmly believe that current border plans will be impractical, resulting in unpredictable delays for road-based movements.

But the impacts won’t just be at the border – disruption will feed right through supply chains, both domestically and internationally, post-Brexit.

Right now, there are three, broad, Brexit scenarios: a withdrawal deal with a transition period until January 2021; a compromised delay of some

14 MotorTransport MTR_291018_014.indd 14

sort that allows further discussion in a transitional phase; or no deal and no transition.

The big worry is no deal, no transition. So, what does this mean for road haulage, the UK’s supply chain and those that work across our sector?

The issue of EU citizens working in the UK is the only area where there has been discernible and meaningful progress. Deal or no deal, the government has confirmed (in its road haulage technical paper) that driving licences, transport manager and Driver CPC qualifications obtained in the EU will be recognised after UK departure.

In terms of market access, for those international operators working in and out of the EU, there is now massive uncertainty as UK community licences will not be recognised under a no-deal scenario. UK operators will have to rely on an old 1950s system called ECMT for permits, or new bilateral permits to work in and out of the EU.

New bilateral permits have yet to be negotiated and will not be formally negotiated until we find ourselves in a no-deal situation and therefore recognised as a third country. We do not know which countries will introduce bilateral permits, if they will be needed for transit, or if they will be limited by quota.

Finally, customs. If there is no deal, then as it stands customs will not be frictionless. Massive changes will be needed as every shipment by road between the UK and the EU will require customs clearance. Every lorry crossing the border will also need to submit a safety and security declaration. That’s every shipment and every lorry.

Domestically, hauliers also need to protect themselves, particularly regarding volume commitments. We’re a volume-based industry, should there be a slowing in the supply chain then naturally volumes will drop, and costs will need to be managed accordingly.

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25/10/2018 10:52:05

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25/10/2018 09:58:06

Focus: Urban

motortransport.co.uk

Get fully briefed on the new regulations at Freight in the City Expo

Expert advice on offer at expo

By Hayley Pink

As clean air zone (CAZ) proposals gather pace across the UK, it is imperative for operators to keep up to speed with how city regulations will affect fleets and delivery patterns.

Add to the mix the pending Direct Vision Standard in London and a network of localised air quality strategies under development by various local authorities, and the urban logistics sector is becoming increasingly complex.

Freight in the City Expo, at London’s Alexandra Palace, on 6 November, is the ideal opportunity to speak with experts and hear from leading operators about some of the work under way to adapt to new urban requirements.

Now in its fourth year, the event brings together operators, national and local government, and businesses to tackle the challenge of ensuring safe and sustainable urban deliveries.

Natalie Chapman, head of south of England and urban policy at the FTA, will examine the effect of differing rules across multiple cities in the opening conference session.

“Improving air quality and reducing vehicle emissions is

a key focus for the government,” she said. “While the FTA and the wider logistics sector supports schemes promoting clean and sustainable deliveries, the urban freight environment is in a state of flux and confusion. There are a plethora of new rules and patchwork regulations to consider and the FTA advises any company operating CVs to attend Freight in the City.”

Other key topics to be discussed include the shape of urban warehousing requirements, alternative fuels for city use, refuelling infrastructure and planning strategy for future freight. Key speakers

include TfL director of city planning Alex Williams, DfT deputy director and head of environment strategy Bob Moran, Low Carbon Vehicle Partnership MD Andy Eastlake, and visionary innovation lead at Frost & Sullivan Lynne Goulding.

Leading operators will share best practice and trial results reshaping urban deliveries.

Firms taking part include John Lewis & Partners, DPD UK, Veolia, Tideway, DHL Supply Chain and the University of Birmingham.

■ To attend this free event and to book a place, go to freightinthecity.com.

TOP PLACES: More than 50 firms are taking part in this year’s Freight in the City Expo, including top truck and trailer manufacturers such as DAF, Dennis Eagle, IVECO, LDV, Mercedes-Benz Trucks, Renault Trucks, Scania, Transdek and Volvo Trucks. There will also be a brand-new compliance zone bringing together experts in urban operational matters, such as TfL, FTA, Low CVP, Energy Saving Trust, the DVSA and the Metropolitan Police. In addition, visitors can drop in to the Knowledge Zone talks or head to the innovation stand and learn about some of the projects being supported by Innovate UK, Transport Systems Catapult and the Knowledge Transfer Network.

16 MotorTransport MTR_291018_016.indd 16

LoCITY lowdown A monthly look at work to cut CV emissions. This month, Ali Kagalwalla, insights and innovation manager at CitySprint, discusses the implementation of London’s Ultra Low Emission Zone With just six months until the implementation of London’s ULEZ, we are all hands on deck preparing the company for this positive step towards healthier air.

Nine months on from the launch of our hydrogen van, and thousands of zero-emission miles travelled, we were proud to win the Logistics Awards category for Sustainability and the Environment with our client Mitie.

While we were thrilled to win the award, the scarcity of hydrogen fuelling stations and high costs of hydrogen vans makes the expansion of this vehicle type challenging. As a country we can take inspiration from Japan as the pioneer of hydrogen technology. The Japanese are capitalising on public and private investment into the 2020 Olympics to develop a hydrogen fuelling network for the future.

Nevertheless, we can’t rest on our laurels or glow in the victory of a single award. As the same-day market leader, we face two opposing factors. The market is moving towards us – customers increasingly demand hyper-fast deliveries of retail, food, and grocery.

Simultaneously, increased congestion, upcoming regulation, and limited availability of low-emission commercial vehicles make urban operations challenging. But there is no room for excuses with ULEZ rapidly approaching.

Positively, our cargo bikes are proving extremely successful for same-day deliveries – clocking delivery times up to 50% faster than small vans. An obvious win for the environment and our customers that receive better service. These e-bikes fulfil more than 4,000 jobs monthly in central London, with the highest density of work. This zone stretches east to west from Canary Wharf to Shepherd’s Bush and north to south from Camden to Elephant and Castle. Our efforts were vindicated when we heard of the government support for e-cargo bikes and other low-emission vehicles at the recent zero emission vehicle summit.

Finally, technology and harnessing the power of big data will help us scale these efficiencies across the UK. For example, earlier this year we hosted a team of interns from the University of Southampton. The team applied data science to identify zones for job consolidation and most importantly predict the job profile and job location so supply and demand factors can be optimised. These students were led by professor Tom Cherrett and provided tangible solutions to the unpredictability of on-demand logistics. Ultimately, the synergies between zero emission vehicles and predictive analytics are helping us prepare for ULEZ. We urge our clients and partners to join us on this journey towards a cleaner, greener environment.

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

Contact enquiries@locity.org.uk for more details.

29.10.18

25/10/2018 09:36:06

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25/10/2018 10:02:09

Viewpoint

motortransport.co.uk

It’s got to be gas on the road to zero T Mark Gilks Transport specialist, Calor

here has never been a better time for the freight industry to fully embrace gas-based fuels. While gas is already part of the bigger picture, the government’s recently launched ‘Road to zero’ strategy, and the introduction of clean air and low emission zones, means gas’s position as the clear fuel of choice for freight operators is secure.

For existing fleets and those keen to significantly improve their emissions, there’s the option of dual-fuel technology with bioLPG and natural gas. Created from ethically sourced feedstocks, bioLPG is chemically identical to LPG. This creates a drop-in solution for hauliers already powering their vehicles with LPG through a dual-fuel system, with no requirement to alter any equipment or supply infrastructure.

Achieved through a simple conversion, dual-fuel enables an engine’s combustion

chambers to burn both LPG and diesel. BioLPG offers CO2 savings of between 50% and 80% compared with conventional LPG, based on a 100% bioLPG substitution.

For those serving cities from a greater distance, LNG is available, with many manufacturers such as Volvo, IVECO and Scania already opting for this fuel. LNG is easy to store, and so ideally suited for fuelling regional and long-haul HGVs, while operating quietly, too – perfect for inner-city areas where strict noise restrictions may apply.

Supported by the right infrastructure, and being competitively priced, it’s easy to see why gas is considered the fuel of the future for the freight industry. n Calor is sponsoring the seminar at Freight in the City 2018, being held on 6 November at Alexandra Palace, London, and will be on stand S01 at the event.

PREMIUM REDEFINED

Time to be heard and get our priorities right R Steve Hobson Editor Motor Transport

oad haulage is to get its own All-Party Parliamentary Group, thanks to our old friend Sir Mike Penning MP, former transport minister and guiding hand behind the trial of longer semi-trailers. Sir Mike made the announcement that he would form and temporarily chair the new group at a Parliamentary reception held last week at the House of Commons and he immediately got the support of Labour shadow transport minister Andy McDonald MP. Both MPs agreed that road haulage is greatly under-represented, under-appreciated and generally under the radar of most people in government and that it has to start making its voice heard, especially over the impending debacle that is Brexit.

Another priority has to be the worsening driver shortage, which is reaching crisis proportions in some parts of the country. Two things need to

18 MotorTransport MTR_291018_018.indd 18

happen urgently to solve this problem – wages will have to increase and funding must be found to put new drivers through their HGV licences.

No one expects London bus drivers to pay for their training and then go cap in hand looking for a contract as an agency or self-employed driver.

While £23,000 a year might not be the most attractive starting salary, at least trainee bus drivers are on the payroll from day one, part of a proper company training scheme and in a pension scheme.

Road haulage has paid £130m in Apprenticeship Levy but claimed back only £10m.

This has become nothing more than a stealth tax and a way has to be found to funnel that money back into training HGV drivers.

The newspaper for transport operators

To contact us: Tel: 020 8912 +4 digits or email: name.surname@roadtransport.com Editor Steve Hobson 2161 Editor-in-chief Christopher Walton 2163 Group news editor Chris Druce 2158 Group technical editor Colin Barnett 2141 Senior compliance editor Roger Brown 2168 Urban editor Hayley Pink 2165 Group production editor Clare Goldie 2174 Deputy production editor Jo Saunders 2173 Key account manager Andrew Smith 07771 885874 Display sales executive Barnaby Goodman-Smith 2128 Event sales Richard Bennett 07889 823060 Tim George 0755 7677758 Classified and recruitment advertising Head of sales operations Julie McInally 2122 rtmclassified@roadtransport.com Sales 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 © 2018 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

29.10.18

25/10/2018 11:00:09

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25/10/2018 10:04:44

Finance

From buy to lease Contract hire has generally been most popular with larger firms, however, it is now increasing in popularity among all sizes of operator in the midst of future unknowns like Brexit and clean air zones, writes Simon Jack

C

lean air zones, Brexit and a pressing need to control costs – anyone currently replacing or expanding their fleet does so against a backdrop of huge challenges.

This uncertainty is pushing many companies towards leasing and rental options rather than outright purchase, although some companies still prefer the idea of owning their own assets.

The move to Euro-6 engines is being hastened by the likely creation of clean air zones (CAZs) in many towns and cities, meaning that some operators are in a race against time to become compliant.

British Vehicle Rental and Leasing Association CEO Gerry Keaney says: “Many operators, not just SMEs, will struggle to upgrade their fleet of trucks over the next 18 months as the first HGV CAZs are introduced.”

Reducing residual values

This is at a time when many operators with older fleets made up of Euro-4 and Euro-5 trucks – whose residual values have dropped since the advent of Euro-6 – have been left with a funding gap.

MD of Dawsongroup John Fletcher believes that this means acquisition methods that remove risks will prove popular. “They can provide fixed costs in a changing landscape 20 MotorTransport MTR_291018_020-021.indd 20

and create a safe harbour in which to operate,” he comments.

With operating leases the vehicle is taken back at the end of an agreed period but the haulier may have to cover repair and maintenance costs and tyre replacement. With fullcontract hire all costs are usually fixed for the life of the agreement.

Commercial director of Fraikin, James Walker, believes that both acquisition methods will become more popular in future. But some firms are replacing only their fleet going into London with Euro-6, while using older vehicles in other parts of the country.

“People are leasing more than they were but as yet we haven’t seen an avalanche. Companies can move vehicles around the country, so there is still a reasonable amount of slack in the system,” he says.

However, as more Euro-6 trucks are needed contract hire will grow, he says. “Also, in the run-up to Brexit those who own vehicles could see uncertainty about the supply of parts and vehicle pricing,” he predicts.

Although traditionally contract hire has been most popular among larger firms, it is now growing among all sizes of operator, according to Asset Alliance MD Dave Potter.

“It gives larger 3PLs the opportunity to match their contract hire terms with the length of a

contract they may have with a retailer. Smaller firms like it because of the certainty of the costs,” he says.

Given the present market conditions some companies are also turning to vehicle rental to avoid a financial commitment. Danny Glynn, MD of Enterprise Flex-E-Rent, says it has proved popular with companies with specific needs, such as those taking vehicles into central London.

“We’re seeing the majority of businesses examining the role of more flexible options as a way of staying responsive, agile and ahead of any economic spirals,” he says.

Longer length rentals

There have, however, been changes to the rental market, including a reduction in the number of short-term rental vehicles available, as Ryder’s commercial director Nigel Martin explains.

“Leasing companies cannot afford to have a vehicle worth £70,000 waiting around for an opportunistic phone call. Rental fleets tend to be used for longer rentals, for example for six to 12 months in the start-up phase of a contract,” he explains.

Despite more operators opting for leasing and rental, others still want to own their vehicles, either because they are cash rich or they prefer to own assets. In addition, low interest rates can make bank loans and hire purchase agreements appealing.

The decision to purchase outright also allows hauliers complete control of the vehicle, says Chris Dew, asset finance specialist at SNAP Account. “The asset is shown in the balance sheet of the customer with depreciation and 29.10.18

18/10/2018 11:09:47

motortransport.co.uk

MANUFACTURERS

any finance interest costs allowable against tax,” he comments.

Ryder’s Nigel Martin says that companies running specialist equipment often favour outright ownership.

“As it may involve expensive pieces of equipment, companies will keep vehicles for longer and then be able to find second-life operators wanting to buy them as there are relatively few of them available,” he says.

Exactly which approach to take when acquiring vehicles could be influenced by the likely impact of Brexit on individual businesses, says Richard Gosling, sales director of Close Brothers Vehicle Hire.

“We are saying to customers if you’re feeling uncertain, rental might be best for you but if you’re a bit more confident look at contract hire,” he says.

Yet another challenge for operators is how to finance the acquisition of trucks running on gas or electricity if they want to add these to their fleet. The rental market could play an essential role in allowing companies to try out alternative fuels, says Dawsongroup’s John Fletcher.

“You can put the vehicle into your fleet, see whether or not you like it, then perhaps choose to acquire it,” he comments.

There is a challenge, however, for finance companies as the pace of technological change means that there is uncertainty about the residual value.

29.10.18

MTR_291018_020-021.indd 21

Despite this, some companies are investing, including Close Brothers Vehicle Hire which has some electric vehicles – the firm is looking at the possibility of selling batteries to a sister company involved in solar energy at the end of the vehicle’s life to increase residual values.

Access to vehicle performance

Fraikin is already involved in electric vehicles and is about to launch a product for gas-powered trucks. James Walker says that hauliers opting for such vehicles often want a lot of information about the vehicle’s performance.

“They want to know about gas and electricity usage and a range of engine management information,” he says.

This is part of a trend towards greater IT provision and Fraikin is about to launch a new product called Fraikin Connect, a platform that provides information on anything from tyre pressures to fridge temperatures, in-cab cameras and tachographs.

Hexagon Leasing says that there has been a rise in the number of customers wanting instant access to the data of the fleets they have on hire.

In response, the company has created a bespoke in-house operating system called Simply Objects which can be accessed through the Hexagon website, showing information about the vehicles and their performance.

Such innovations help to manage what is a crucial part of the business both now and in the future. ■

Most vehicle manufacturers provide finance options but have seen the popularity of contract hire rise over the last few years. MAN financial services director Peter Collins says the company finances around 55% of the new trucks it sells. Of these, 60% are acquired through contract hire and operating leases and 40% are through packages that lead to outright ownership. “Five or six years ago that would have been the opposite,” he says.

Scania Financial Services marketing manager Tom Brewin says: “More customers are using leases to fix pricing and to provide a clear replacement cycle where vehicles are regularly refreshed, simply treating the vehicle as a tool to generate revenue.” He says that operators are looking for flexibility and Scania’s Freedom hire purchase product allows for a payment break of up to two months in every year of the contract. Its Flexi-Buy hire purchase offer allows companies to overpay by up to 20% of the outstanding balance each year and reduce the finance term on remaining rentals.

John Mabey, sales director of DAF finance arm PACCAR Financial, says there are no hard and fast rules when it comes to acquiring vehicles. “No one answer fits all and our job is to provide DAF customers with different solutions,” he says.

The company’s HirePlus product, a combination of an operating lease and repair and maintenance, where PACCAR takes the residual risk, can include flexible options such as tyres and replacement vehicles if a truck is off the road – DAF Connect telematics is also part of this product. This may appeal to hauliers without their own workshop or who want to avoid the complexity of maintaining Euro-6 engines.

Companies that want to buy outright and opt for hire purchase can benefit from deferring part of the payment until the end of the agreement – something that may be appealing during uncertain times.

TRAILERS The appeal of contract hire is affecting the trailer market as much as the truck market.

Hireco MD James Smith says 90% of the new trailers it buys each year are used for contract hire deals with customers, up from 30% to 40% in 2010.

“Companies have a fixed cost base for five years and can manage their cash flow effectively and there is no need to worry about residual value – that is our problem,” he says.

Sales and compliance manager of Trailer Resources Ryan Jones also believes there are strong arguments for acquiring trailers through contract hire even for companies with available cash.

“You can take advantage of the contract hire company’s bigger buying power which should be passed on in the monthly rentals,” he says.

MotorTransport 21

18/10/2018 11:11:03

Interview: Martijn de Lange

No worries Netherlands-born Martijn de Lange took over as Hermes UK CEO last November and has a novel approach to running a business – simply don’t worry. Emma Shone reports

T

he internet is full of books, articles and motivational seminars coaching people on how to run a business. But put your wallets away, because Hermes UK CEO Martijn de Lange has cracked it. The trick, he says, is simply not to worry.

De Lange had been with Hermes for five years when he replaced Carole Walker as UK CEO last November and brought with him big plans to give the parcel carrier a premium makeover within its economy price margins.

Technology, branding and delivery times are all part of de Lange’s master plan for the business, in which he envisages eventually positioning Hermes as the carrier of choice for every retailer in the UK. But to get there, he says, he cannot and will not spend time worrying about factors at play that are out of his control. Take, for example, Amazon, which is dominating the UK e-commerce market and slowly building its own delivery network.

“Amazon is everyone’s favourite topic to discuss with me,” he says, “because everyone has their own big philosophy about where it’s headed. But I believe worrying never makes anything better. So I am never worried about anything.

Catalyst for improvement

“Whatever it is that Amazon is going to do is not something that we are able to control. What Amazon should create is an intrinsic motivation in this company to be the best we can be. It’s true they are pushing the boundaries, but I don’t want to see them as a threat, I want to see them as a catalyst for improvement.”

De Lange adds that Hermes is a long-time partner of Amazon, and that if the e-retail giant were to remove its volume from Hermes it would have a significant effect on the business, but adds: “We have a very strong partnership with Amazon.

“You also have to believe that if you are fully focused on delivery as your core business, then you must be

OUT OF OFFICE Go-to karaoke song: ‘Summer of ’69’

by Bryan Adams. When I came to the UK 12 years ago I lived in Manchester and we always went to a place called the Press Club that kicked off with an hour of karaoke. Those really were the best days of my life.”

Best place travelled to: “I visited the Amazon in Brazil for a week, which was very special. We went fishing and saw piranhas and alligators. It was totally out of my comfort zone, I’m not much of a hero, but I loved that.”

Favourite drink: “I would probably order a gin and tonic.

I’m trying to be a bit healthier.”

Favourite film: ‘The Usual Suspects’ or ‘The Godfather’.

22 MotorTransport MTR_291018_022-023.indd 22

able to do a better job than Amazon, whose business isn’t ultimately a delivery company.”

E-retail platforms such as Amazon, eBay and (outside the UK) Alibaba also present a major opportunity for parcel delivery businesses because they host the swelling community of SME retailers that rely on businesses such as Hermes to carry their products to consumers.

Growth potential

“There are so many businesses popping up that need to send around 100 parcels a week,” he says, “and this segment has a lot of growth sitting in it.”

The key goal for Hermes in the e-retail SME market is to offer them a next-day delivery service – it currently only offers its standard 48-hour option.

But, de Lange says, somewhere in among the hundreds of small retailers is sat the next Boohoo.com.

“We were very lucky in that we worked with [Boohoo-owned] Pretty Little Thing and even ASOS very early on. They started out small but we’re still with them now. We want to be with the next version of that, too, and so being the carrier of choice for SMEs is very important for Hermes.”

One issue that pre-dates de Lange’s leadership is the debate around its use of ‘lifestyle’ couriers. The business’s delivery network relies heavily on its self-employed model, and has implemented numerous schemes to protect workers since reports of ill-treatment in 2016. Earlier this year Hermes also raised its couriers’ pay.

“We upped the pay for two reasons,” de Lange tells MT. “Firstly, we want to attract the best couriers that are available.

And secondly, there is a shortage of couriers. So we need to incentivise and retain them.”

While not fretting over the self-employment debate falls under his personal ‘no worries’ philosophy, de Lange concedes that Hermes is reliant on its workers, and that “the measures we’ve put in have taken away most of the noise. The noise, in the first place, was stoked up by the wider political agenda that many companies have seen.

“We believe we are treating people fairly and with dignity.

I find that really important also for my own personal morals.

I don't want to run a company that is under attack in that way.

“But at the end of the day, we have 15,000 couriers. Not every one of them is going to be happy, but that’s the same of any workplace. We’ve made every effort to remain proper with them while keeping them self-employed.

“I don’t want to turn this into some cuddly atmosphere that feels like an employee network, because that’s not what they are. These people are not victims of the self-employment system.

They choose to be a part of it.”

Self-employed status

As part of their self-employed status, Hermes’ couriers do not carry corporate branding on their clothing or vehicles.

This might seem like a strange strategy for a business that’s trying to realign itself as a consumer-facing, experience-driven household name, but de Lange says a logo on a polo shirt is less important than maintaining the locally based self-employed courier model that allows its workforce to perform flexibly in their areas.

“The consumer sees a lot of our branding without it. It’s in our communications, and it’s on our big fleet vehicles and 29.10.18

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motortransport.co.uk

buildings. That’s enough and I don’t think a uniform adds much additional value,” he says.

“If you know your courier and they know that if you’re not in they can run the parcel to your mum round the corner – that’s a great customer experience that will stand out. Having a parcel taken miles away to a depot by a branded van is not a stand-out experience.”

Consumer experience is at the heart of a culture change that de Lange is nurturing at Hermes, and earlier this year he outlined plans to build its next-day delivery offering across the board.

“Consumer-centricity is the real battleground now. That is becoming the heart of what we do and we’re getting there, not by changing our operating model, because that is very successful. But we are enhancing that experience with lots of technology,” he says.

De Lange is quick to clarify that he has not set his sights on the business becoming a bluer version of the premium-delivery king DPD. “This is not about DPD. It is about Hermes offering a more premium service. But we don’t want to necessarily

THE BREXIT BIT Even the CEO who is determined not to let things that are out of his control plague his mind has his qualms about Brexit. “It wouldn’t have been my choice. It’s sad, and I would never have chosen this economic self harm. It is a shame,” Martijn de Lange tells MT. With a predominantly domestic operation, the UK’s EU departure shouldn’t, in theory, have too lasting an effect on the business. But de Lange says that isn’t to say it is safe from the fall-out.

“We have two worries. Our international business is affected by the exchange rate, so that’s not great. And in the UK, our domestic business is affected by consumer confidence. If that’s down because of Brexit, then it’s going to hurt retail spend, that will hurt us. But overall, we don’t have the big worries of the customs union and tariffs, and business will remain.”

charge a premium price for it – I think the days of charging the big premiums for some of these experiences are over.”

But the extra focus on next-day doesn’t mean Hermes is forgetting its roots, and de Lange says there will not only always be a place in the market for a low-cost delivery model, but that there remains room for this sector to grow, too.

Free delivery

“The consumer still, first and foremost, wants a free delivery,” he says. “There’s this idea that the future Amazon is working towards is where you get your parcel within two hours. But I don’t think that’s realistic, because I don’t think the retailer landscape can pull off what Amazon is pulling off. An economy service, based on price, will always have a place.”

Hermes has begun rolling out its more “personable” branding with a new corporate look, including a cartoon figure semitrailer livery shortlisted for this year’s MT Livery of the Year award.

“I want to look back in five years and see that I’ve transformed this business,” he says And de Lange isn’t worried about how he’s perceived while he’s doing it.

“I’ve noticed this is quite a personal game, being a CEO,” he says. “But I’m just a normal bloke from Holland that’s ended up here. And I want to do the best I can for this business and its people and therefore I’m not going to worry about what everybody else thinks. Because that, in so many ways, is a huge distraction.

“I want to spend my time motivating, creating great teams, learning our clients’ operations. I am not going to worry about the political climate around self-employment, because I’m not influencing that. I’m not going to worry about Amazon because it’s not something I can control.

“And,” he concludes, “I’m not going to worry about how each and every courier perceives me on social media. Because I know I am genuinely trying to do well by everybody and the best I can for the business.” ■

Confidential 24x7 helpline available to the industry’s workforce and their families

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25/10/2018 10:50:29

MT Awards 2018 winner profile Customer Care Award

A shining light Pall-Ex won the Customer Care Award for its commitment to leading the way in a fiercely competitive sector, refining customer service levels and the quality of its partnerships

D

espite delivering a consistently high standard of customer care since it was founded in 1996, Pall-Ex decided to set up a review a couple of years ago to look at the extent to which it could make improvements.

Following an exhaustive consultation with customers – part of its Shine initiative – it identified a range of areas where it could refine its customer service levels and the quality of its partnerships. They included measures to enhance transparency, improve communication, develop customer-tailored reporting, streamline processes, create in-depth reviews and strengthen international freight capabilities.

Shine initiative

Pall-Ex MD Kevin Buchanan told MT at its hub in Ellistown, Leicestershire: “We want to be considered the number one network for quality, so we developed Shine to spread customer care excellence throughout the business.

QUALITY CONTROL In the next few years Pall-Ex plans to expand its facility in Ellistown or move to a new site in the area, with the possibility it will also develop more regional hubs. It is the only pallet network to operate under a network-wide ISO 9001:2015 standard for quality and its hub has also obtained other significant environmental, health and safety accreditations. For example, as part of the on-boarding of customer Bristol Laboratories, Pall-Ex was successfully audited for the Medicines and Healthcare Products Regulatory Agency (MHRA) good distribution practice (GDP).

24 MotorTransport MTR_291018_024-025.indd 24

“It’s all about driving collaborative customer care improvements across the network to promote heightened customer satisfaction and strengthened partnerships, as well as mutually beneficial and long-standing relationships.”

The customer service restructure replaced a system of designated account handlers – who handled four or five key accounts – with a three-tier system of sub-teams, with weekly rotated positions. This provided the opportunity to introduce department multi-skilling through training and to improve communication channels.

The restructure also created extra positions: a customer services manager, a depot principal role, and a key account manager dedicated to sustaining and nurturing partnerships.

Pall-Ex sales and marketing director Mark Steel explained: “We now have a really good team of people focused on the key tasks. Also, the IT team is about triple the size it was three years ago, which represents a massive investment in personnel.”

Over the past three years Pall-Ex has also restructured its board and management team, recruiting experienced professionals and placing a focus on benchmarking services and standards. For example, earlier this year it appointed David Dunhill, who had an earlier spell at Pall-Ex before leaving for Tuffnells Parcels Express, as IT director.

Following the changes, Pall-Ex has recorded customer service satisfaction levels consistently above the industry average based on its on-time and in-full (OTIF) delivery performance and benchmarked against the most reliable pallet network statistics compiled by the Association of Pallet Networks (APN).

Buchanan said: “We have made important and critical changes at board level and now

have a settled senior management team. We’re on a mission to take Pall-Ex from being a good network to a great one and the skills and experience of the new senior staff are vital to our ambition to set a new industry standard.”

Key to the success of the project was the introduction of a new computer system – Nexus – to bring Pall-Ex up to the perceived higher levels of customer service provided by the top parcel networks.

The company opted to address three main areas – speed, functionality and ease of use.

Buchanan said: “The aim is that our technology be as good as that of the top parcel networks but that we keep the human element that Pall-Ex has been traditionally good at.

“We are introducing Nexus on a step-by-step basis and have done all our customer-facing bits at the beginning to put our customers first.”

The Nexus portal provides bespoke dashboards with live updates that can be customised for individual members.

Enhanced transparency

In addition, Nexus Go integrates smart vehicletracking technology to deliver benefits including live consignment visibility and estimated time of arrival updates. Customers can book domestic or cross-border consignments using Nexus and can track any pallet throughout its entire journey, anywhere in Europe.

Steel said: “Nexus is a high-quality customer IT system that has provided us with enhanced transparency, strengthened international freight capabilities and elevated final-mile visibility.

“Pall-Ex is the only pallet network to have a live-chat website function and this allows fast, accessible consignment information and support.”

When a customer joins the network, Pall-Ex 29.10.18

22/10/2018 14:45:39

Sponsored by

WE CARE: Syan Hancock, Isuzu Truck care manager, third left, presents the trophy to the Pall-Ex team led by Kevin Buchanan, group MD, third right

ensures that the integration procedure is smooth and that it receives the back-up it needs.

Pall-Ex analyses all the requirements of its customers through “customer on-boarding” documents. These highlight the strengths and weaknesses of the individual company; its freight profile; customer and end-client expectations; and the nature of goods for post-audit packaging advice.

Steel said: “This in-depth analysis allows a greater insight into customers’ unique requirements. Once on board, customers benefit from a bespoke KPI report developed by the key account manager and a daily KPI dashboard to suit individual business objectives.”

Pall-Ex also shares its service delivery monitor screen with customers, which gives live feedback on any deliveries that are experiencing issues.

Reporting formats

The company discusses with its customers their personal preferences regarding review meetings and also agrees reporting formats, including quarterly reviews and use of customers’ KPI templates.

Steel said: “A key focus for us has been on developing collaboration across the organisation, as well as introducing more streamlined processes. Shine helps us deliver a sectorleading and profitable service that is fully focused on our customers.”

Pall-Ex continually strives to build stronger relationships with its customers and an example of this is the way it has collaborated with corporate customer Staples to reform its procurement processes.

In addition, Pall-Ex regularly visits customer and member offices and warehouses to ensure service offerings remain suitable.

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Steel said: “Our open-house policy for corporate customers encourages communication and builds trusting, long-term relationships through a nothing-to-hide approach.

“Communication is key, it’s a two-way dialogue and about keeping the customer abreast of developments at the business.”

“The hard work and excellent customer service provided by Pall-Ex’s interdepartmental Shine teams have helped us reduce damage claims by 12%.”

Each department has its own set of objectives, and individual staff members have created their own individual goals including ‘smiling down the phone’ and fostering the attitude that ‘nothing is too much trouble’.

The Shine ethos is displayed throughout Pall-Ex’s Ellistown hub. Steel said: “The Shine project has been infectious in terms of winning hearts and minds of employees. We asked staff: what is your ‘personal shine’ and what do we need to do to be the best in the industry?”

“Our teams have put up individual Shine posters around the office featuring inspirational messages, which has been a fun way of embedding a serious message of change.”

As part of the process Pall-Ex has integrated more customer systems with its own, enabling data exchange between the two.

The implementation of Shine has boosted Pall-Ex’s performance levels, facilitating corporate growth of 37.4% and increasing network growth by an estimated 13.7%. In addition, Pall-Ex’s corporate customers have all agreed uplifted tariffs for the next 12 to 24 months, despite a 2018 rate increase of 4%. The project has also helped deliver a 31% uplift in customer satisfaction, a 1,005% profit increase from 2015/2016 and a 98.5% corporate OTIF – 3% higher than the sector.

Steel said: “We have taken on 18 new customers since June 2016.”

According to Buchanan, the past three years have seen Pall-Ex boost its position in the marketplace and the six-figure sum it has invested in Shine has been money well spent.

He concluded: “It’s not necessarily about being the biggest, but rather being the best, delivering on our promises and showing that we are a really service-driven organisation.

“Pall-Ex will continue to develop a bestpractice model for the membership and demonstrate that we are best in class.” ■

WHAT THEY SAID...

Judges were looking for excellent customer care from all levels of an organisation, as well as going above and beyond normal expectations to satisfy customers and expand business.

One judge said: “Pall-Ex’s ambition is bold and exciting, which is refreshing. It not only looks at its strengths but analyses its weaknesses.”

Another praised the honesty of the entry and liked how the initiative was introduced and supported throughout the business.

MD Kevin Buchanan said: “This is an outstanding achievement for Pall-Ex and is testament to the drive and vision of the team, who have worked hard to implement change across the company as a whole.

“The MT Awards are a really important part of our company culture. It’s always about proof and justification about where we are as a business and we will continue to use them as a driver of change.”

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22/10/2018 14:46:09

MT Awards 2018 winner profile Partnership Award

Dream team B

Clipper Logistics and Superdry, winners of this year’s Partnership Award, have established a collaboration that can only be described as transformative

ack in 2013 Clipper Logistics won a competitive tender to handle the supply chain – incorporating fulfilment, returns and warehousing – for fashion chain Superdry. Since then, there’s a case to be made that both are the success stories of British logistics and British fashion over the past five years. To describe the partnership as transformative is somewhat of an understatement.

Clipper’s brief as part of that tender was simple: establish a world-class, industry-leading supply chain model and improve the efficiency and effectiveness of Superdry’s supply chain operations with a view to improving processes and customer service. And within that implement a solution capable of withstand-

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ing the demands of omni-channel retail. As we said, simple!

Superdry has a four-part strategy: GROW (standing for global digital brand, relentless innovation, operational excellence and world market opportunity). Within that, operational excellence means a single consolidated inventory pool across its retail and wholesale channels. This maximises stock availability, meaning that the right product gets to the right customer more often.

Consolidated DC

What a “single consolidated inventory pool” means in practice is Clipper’s giant distribution centre in Burton-on-Trent (known as The Duke).

In 2014 it consolidated its facilities in Gloucester

Park and Barnwood, in Gloucestershire, into the 500,000sq ft Duke. Not only did it benefit from that single consolidated inventory pool, but it also meant that teams from both parties could communicate and collaborate seamlessly, sharing information and resources effectively.

“It needed a whole, fresh new start,” said Elisha Kelly, operations director, Clipper Logistics – who joined two years after it won the Superdry contract – alluding to the wellpublicised supply chain problems the retailer experienced before 2013.”We had the lease for The Duke and we moved from Gloucester and Cheltenham. In the first two years we burst the walls because it was going so well.

“People have said to us that they have never known such a true partnership as you see at

29.10.18

24/10/2018 16:21:53

Sponsored by

SUPER NIGHT: Leigh Goodland, Axis Fleet Management MD, second right, presents the trophies to Elisha Kelly, Clipper operations director and Nathan Brookes, global operations manager (logistics) of Superdry

The Duke. In the office it is half Superdry, half Clipper and over the past few years those walls have come down,” Kelly added.

Sharing information and resources is vital to any partnership, so Clipper and Superdry compiled a comprehensive promotional calendar schedule, detailing when and where items and collections would be released. This also allowed teams to identify the items likely to see the highest demand, which means optimising the stock positioning on the pick floors.

All parties conduct regular project meetings to ensure staff are aware of targets and current progress. Teams from different functions in both businesses work together to support the delivery of more than 100 initiatives; daily planning meetings and operations updates are held between Clipper and Superdry logistics teams, along with weekly trade and volume meetings.

Operations and stock control employees from Clipper also visited a number of Superdry stores, which helped them gain greater insight into store receipt and stock control processes.

US site

When MT caught up with Superdry logistics director Gordon Knox, he was on his way to Heathrow, preparing to fly out to the US ahead of the opening of its distribution centre in Pennsylvania. Run by Geodis, the US site has already benefited from the lessons learned between Superdry and Clipper in the UK – and so has its European site in Belgium where it works with Bleckmann.

“For me it is an attitude. We have to accept that it is a partnership, and not a 3PL doing activity for us. Once you change the mindset and see it as a partner, that is when you see the benefits. I have worked in other businesses where a 3PL is there to beat up and screw down in terms of savings. That has never been the case for us,” he said.

“Clipper had done some work with Superdry and helped us out with issues with capacity.

This had given it an in. It was a competitive tender. Clipper has given a solution that works 29.10.18

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for us rather than ‘here is a solution you can use’. From the off Clipper was different in its approach, it found the solution.”

Across the UK Clipper and Superdry plan and carry out deliveries to 92 stores. This means trunking through six depots, and delivering customer orders in around 1,100 cartons each day. A same-day reverse-logistics service has been introduced, which provides more flexibility to stores regarding range and stock holding.

“The chief operating officer at the time, Suzanne Given, had this kind of view as to the next generation of 3PLs, working very much hand in hand. She wanted to find a company that would truly partner with us. [With Clipper] it was like we were both on the same page,” said Knox. “It is a coming together of minds. It can input in certain ways that we can’t.”

Following the consolidation of Superdry’s retail and wholesale channels into The Duke e-commerce sales at Superdry have risen by 60%. Implementing the omni-channel picking process has seen increased daily e-commerce output to more than 60,000 units per day, increasing pick efficiency by 40%.

“In 2014 we were traditionally set up, with an e-commerce warehouse that was replenished from our retail stockpool. E-commerce was seen as a big shop. In 2014 we found we could not keep up with the replenishment cycle,” explained Knox.

“We went to the same physical location. All the inventory was available for the website, before then we could only see the e-commerce stockroom. In the peak of 2015 the website was exceeding 3 million units. Retail and e-commerce worked together. If e-commerce took off, the retail worked hand in hand with the retail stockpool… that has led on to evolution after evolution.

“Clipper was there as part of all of that. The changes were reflected through all of that period and it resolved the issues very quickly,” he said.

Remember what the R stood for in GROW? Relentless innovation. It’s not something Superdry and Clipper are staying clear of. In

2017 Superdry worked with Clipper to implement a tailored version of its click and collect service across all 92 stores. This has reduced store returns to The Duke by 60%, and reduced stockholding by 2 million units. Click and collect also cut peak risk in 2017, reducing cost per order and helping Superdry protect its margins.

Artificial intelligence

Innovation is taking off in different ways too.

In the middle of October robotics came to the DC. Clipper and Superdry are currently testing them, with the robots carrying the shelving to the picker. RFID has also just been rolled out to the US and further in the UK. “Having end-to-end RFID gives us massive amounts of data, which means we can introduce business intelligence into Superdry,” said Knox.

“This has taken off to the next level with machine learning and artificial intelligence, where we’ve been talking to IBM Watson.”

Kelly too expanded on AI, saying that it is more than just a concept for both parties: “We are working with Leeds University on artificial intelligence, looking at the last mile and how we can make that customer experience more pronounced. How do we take it to the next level?”

Last year Clipper bagged a five-year extension with Superdry, keeping the partnership going until September 2023. Kelly said that the renewal doesn’t just give The Duke a big boost, but the company was well.

“We certainly work in e-commerce and want to do more. Gordon has allowed us to bring in [potential customers] to The Duke and has given us a reference. Pretty Little Things in Sheffield wanted a reference, and Gordon gave it to us. For us that was massive, that Superdry was willing to give us that endorsement.

“When Gordon opened in Belgium [with Bleckmann] and you’re seeing it now in the US [with Geodis], Clipper people went to help open those sites. We do work really closely, for the same goals, to make SuperDry successful and give the customer the best experience,” Kelly said. ■ MotorTransport 27

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