Easter rush

VOX POP How have you tackled the Brexit border challenge?

Bob Terris, chairman, Meachers

Arranging movements is very difficult at the moment, with each transaction taking much longer to organise. We are also heavily involved in the importing of Covidrelated requirements. Shipping lines are unable to give firm rates or commit to bookings in many cases. There are no signs of any improvement and I would guess this will carry on to the end of the year.

Stuart Charter, MD, Aztek Logistics

The situation has eased considerably on our daily movements into both sides of the Irish Sea. The complexity of the situation thwarted a seamless transition in the wake of the existential Irish border question and special protocols – an issue freighted with economic, security and political uncertainty.

However, we published a Brexit administrative essentials checklist on our website and created a visual guide to display specific information on subjects including EORI notes, commodity codes, declarations, commercial invoicing, packing lists, certificates and licences and tariffs.

None of this material was obvious to businesses looking on the GOV.UK website so we created a visual step-by-step representation.

Some firms had simply stopped shipments until it was sorted out, with one courier company complaining that more than 70% of parcels were accompanied with the incorrect paperwork.

Apart from complex new customs arrangements published by the UK government, businesses dealing with Irish customers now also need to ensure shipments only travel on heat-treated pallets as the UK falls outside of an EU-wide exemption to this rule.

We are also investing additional customs clearance training for our staff and engaging apprentices to take on this role.

Dan Myers, MD, UK and Ireland, XPO

Brexit has presented challenges, but working together with our customers we have found ways to ensure that trade has continued. Further investment in our people and systems has improved the ease at which goods now flow. We are helping new customers navigate this landscape and we will scale our solution, helping more businesses continue their trade with their European partners.

Charlie Shiels, CEO, ArrowXL

We deliver to Ireland and the Republic and our Brexit project was split into three. First, our people and its impact on them. Second, operational compliance. Third, other legal/contractual/regulatory compliance issues like data protection, procurement and client contracts.

Project two took most of the work and involved becoming import/export educated and re-engineering the way we worked to ensure compliant and significant IT work and investment on import/export rules.

We also sourced customs clearance partners, educated clients on the new rules, provided internal training and implemented a new operational solution.

We’ve seen delays, some of our own making, but the relevant authorities seemed a bit overwhelmed at the new rules and it was a struggle for a period. But we were pleased at our January/February operational success and delays were relatively minimal. The situation is now very much improving. We’ve got better and so have our clients and the authorities. We’ve also employed an import/export expert who is doing an amazing job. The next step is Northern Ireland compliance, which has been moved back to October.

Welch’s Transport choc full as Easter demand rockets

Welch’s Transport has resumed normal service after being forced to cancel all its non-contractual bulk collections and deliveries last month due to record freight volumes.

The family-owned firm, which operates a fleet of 80 trucks, said demand over Easter, combined with the government’s decision to ease lockdown and allow nonessential shops to re-open just after the holiday, created unusually high demand for its services. The Palletline member undertakes considerable work into Amazon fulfilment centres.

Welch’s Transport also reported its latest annual results for the year to 31 December 2020, which saw the company climb out of the red despite a fall in sales.

While turnover declined to £12.5m (2019: £14.1m), the company turned a loss of £75,635 in 2019 to a pre-tax profit of £75,635 by the end of 2020.

The company, based in Duxford, said the impact of the pandemic peaked in April and May with revenues down by a third, 30% of staff furloughed and 40% of the transport fleet off the road, leading to “significant” losses in both months.

ALL CHANGE: Kuehne+Nagel’s decision to sell a major part of its UK business last year resulted in a 9.3% fall in turnover in its international contract logistics division in the first quarter of 2021, the group has reported. The results also revealed that when the division was sold to XPO in March last year it had made a loss of £3.9m in the first three months of 2020. The sale, which followed a major review of its contract logistics business, included the drinks logistics, food services, and retail and technology divisions, which generated a turnover of around £617m in 2019 and employed 7,500 staff. Kuehne+Nagel retained its UK pharma and healthcare transport divisions. The results also revealed that in the first three months of 2020 the UK contract logistics division contributed CHF164m (£129m) of net turnover, CHF146m (£114.9m) of gross profit, and a loss for the period of approximately CHF5m (£3.9m).

Former STC launches licence training company

Former senior traffic commissioner (STC) Beverley Bell (pictured) has launched a training company offering operator licence awareness, Driver CPC and transport manager courses.

Beverley Bell Training will begin rolling out its first courses in the North West in June while Covid restrictions remain in place, but the intention is to offer them nationwide.

She said: “I am confident that, through the training company, we will deliver the highest standards of training that will support companies and their staff to promote and deliver best practice and safe operation throughout the commercial vehicle industry.”

The courses are all CILT or JAUPT accredited.

Bell stepped down as STC in 2017 before launching Beverley Bell Consulting, which provides compliance and governance advice to operators, as well as representation at public inquiries.

She received a CBE in 2017 for services to road safety and the freight industry.

Lima Logistics creditors in line for payout

Trade creditors owed money by Gloucester-based Lima Logistics, which collapsed into administration as a result of the Covid-19 pandemic, are expected to receive some money back.

In a progress report from Quantuma Advisory, it said unsecured claims had initially been thought to be £270,806, but it had now received 11 claims totalling £315,594.

The report summarises the progress of the parcel delivery firm’s administration, since Quantuma was appointed in September 2020.

It said the administrators had agreed with Lima’s director Claire Morphew that she would assist with the collection of book debts, given that she was an experienced accountant.

The report confirmed that “the recovery of the book debts has been finalised and that realisations total £88,003.57”.

Photo: Shutterstock

Morphew was paid £9,257.73 for her work.

In addition, the administrators outlined how they instructed solicitors to liaise with a company connected to Lima Logistics called GL Transport Solutions, “in respect of a DPD income stream they had taken on following the company’s insolvency.

“Whilst [Lima] had no contractual entitlement to the DPD income stream, it was agreed with GL Transport Solutions that a consideration be paid to the company in relation to this matter.”

The solicitors concluded that the offer by GL Transport Solutions to Lima of £12,000 plus VAT should be accepted, via 12-monthly instalments of £1,000. The report added that there are no secured or preferential creditors.

The company had grown into a £300,000 turnover business before Covid-19 struck.

Driver admits to horror smash

A lorry driver pleaded guilty to causing serious injury to a jogger after he failed to bring in one of the stabilising legs on his flatbed truck.

Newcastle Magistrates Court heard that Andrew Brady, 58, drove for nearly two-thirds of a mile along Cleadon Lane in South Tyneside with the leg stretched out above the pavement before it stuck a male runner, who suffered serious injuries, including a fractured vertebrae, a bleed on the brain and broken ribs.

Brady, of Skendleby Drive, in Kenton, Newcastle, was released on unconditional bail and will appear at Newcastle Crown Court on 27 May for sentencing.

LETTERS

Send your letters to the editor at steve.hobson@roadtransport .com

DVSis driving us round the bend

MT is probably inundated with moans about this, but add mine to the list.

I’m sure we will be among many to have received our first HGV Safety Permit penalty charge notices from TfL.

Like most operators we have been busy upgrading fleet, buying camera systems, filling in countless applications, photographing trucks from all angles and reflecting on what now amounts to a multi-million pound spending spree to maintain compliance to a nonsensical piece of local bureaucracy. Can anyone actually explain the Direct Vision formula?

Don’t get me wrong, we absolutely need to protect vulnerable road users, and as trucks and people are fairly immiscible, the onus was always going to be on operators to provide a solution. However, short of reverting to someone walking ahead of the vehicle with a red flag there were probably no worse solutions than the Direct Vision Standard (DVS) left on the wall in the TfL brainstorming session, and that was only ruled out because the colour red was deemed offensive in certain quarters.

If you followed the guidance for inclusion to the ‘allow list’ (MT, 20 January), as we did, you will no doubt be feeling somewhat assured that these are someone else’s problems. They’re not. Of the PCNs received so far, only three were legitimate. In every other circumstance we have followed the guidance to the letter.

Vehicles that are 3-star rated from the factory are in the haul of PCNs. Now we have the challenge of contesting them. Surprisingly there is no one at home in TfL, and the escalation clock has started to tick – that will be £825 in 28 days, thank you.

I shall set aside my cynical view on the timing of this and the impending mayoral election to lament on how our world-class city could have spawned such an inept body as TfL. We know how challenging London is to serve – logistics professionals rise to that challenge daily, keeping the capital’s shelves stacked, its bins emptied and its infrastructure maintained without fuss. Given what our industry does for London, perhaps TfL can at least get its bit right?

Does it take us to withdraw our vehicles from the city for TfL to realise it actually may need those lorries after all? In the words of Line of Duty’sTed Hastings, “Jesus, Mary and Joseph and the wee donkey, can we just move this thing along before it drives us all round the bend.”

John Fletcher MD, Dawsongroup truck and trailer

Popular Freight in the City Expo set for a welcome return to Alexandra Palace this September Urban issues back in focus

Freight in the City Expo is back with a bang this autumn at London’s Alexandra Palace, so make sure you keep the date –28 September – free in your diary.

Now in its sixth successful year, this popular one-day event brings together the latest commercial vehicles, technology and services for the urban logistics sector under one roof.

In the centre of the exhibition hall, a topical seminar programme will be taking place, with an expert line-up of speakers already taking shape. They will help highlight the latest challenges facing operators delivering into towns and cities and share successful examples of best practice in urban logistics, with safety and sustainability at the core.

We are delighted to announce that Scania will be supporting the event as our headline partner. In addition, we are excited this year to be working with Siemens eMobility on the creation of a new Charging Zone area to help operators explore their electric vehicle charging requirements.

Likewise, we’re thrilled to be collaborating with light commercial vehicle manufacturer MAXUS on our seminar stage, which will be heading up a dedicated session to help operators take those first all-important steps towards electrifying their fleet.

Back by popular demand will be our Knowledge Zone, which is the place to head for expert advice on compliance, training and operational matters. This will feature stands from leading organisations including the Association of Fleet Professionals, CLOCS, Cross River Partnership, FORS, RHA, RTITB, TfL and Zemo Partnership, among others.

Past visitors to Freight in the City have found it an ideal opportunity to conduct key business discussions with manufacturers and technology experts, as well as to meet exciting new contacts to collaborate with on future projects.

It could be one of the first opportunities you’ll have after more than a year of virtual meetings to finally come face-to-face with your industry peers once more – and hopefully spark the beginning of new ideas and projects.

“We can’t wait to get back to Alexandra Palace this autumn and look forward to hearing the live buzz of conversation taking place across exhibitor stands and in lively seminar debates,” said Freight in the City events editor Hayley Pink.

“This past year has clearly demonstrated how essential the urban freight sector is to ensuring our towns and cities remain functional and essential supplies reach shops, homes and hospitals.

“Freight in the City Expo is this industry’s chance to shine the spotlight brightly on some of the sterling work that has taken place during the Covid-19 pandemic, and explore inspiring technology and urban delivery strategies for the future,” added Pink.

To register for your free ticket to attend on 28 September, simply go to freightinthecity.com. We look forward to seeing you there! ■ Why not check out our regular

Freight in the City webinar series on freightinthecity.com to keep yourself abreast of all the key topics in a concise, virtual format?

By Carol Millett

In partnership with refuse collection vehicle (RCV) manufacturer Dennis Eagle, Freight in the City hosted a webinar on 22 April taking an in-depth look at the electrification of waste and recycling vehicles, chaired by Freight in the City events editor Hayley Pink.

At the event, Andy Graves, product marketing manager at Dennis Eagle, gave an overview of the manufacturer’s first electric RCV, the eCollect, which is closely modelled on its best-selling 26-tonne 6x2 diesel refuse truck.

Graves said the eCollect’s design was kept as close to the firm’s traditional diesel RCV as possible, so it would feel familiar to the drivers, with the 26-tonne electric RCV sporting the same Terberg split-bin lift and Olympus 19cu m body as its diesel counterpart.

The cab’s interior also saw few changes, Graves added. “There’s a new gear change pad, new programmable switches, a tortoise icon to alert the driver to return to base, and a state-of-charge display rather than a fuel gauge,” he said.

“Otherwise, it’s just the same as driving one of our traditional vehicles – apart from, of course, the fact that acceleration will certainly pick up much better than on a diesel vehicle.”

Range is another key issue, since the eCollect is required to make on average two or three daily collection rounds of approximately 10 tonnes of waste and retain enough power to get back to the depot.

Graves said the team’s solution was to install five lightweight lithium battery packs, each with a 60kWh capacity for a total of 300kWh, and a 200kW motor.

He said data from demonstrator vehicles had shown the eCollect’s average power consumption was 148kWh per day.

Pointing to research from one customer’s vehicle in Cheshire, Graves added: “The vehicle did over 94 miles and collected around 13 tonnes of waste, but it still got back to the depot with a 15% state of charge, having used just under 270kWh of energy.”

Maintenance and service is also simpler, he continued. “We expect the eCollect to be considerably lower in maintenance cost, since there are no engine oil changes

Freight in the City webinar highlights the true potential of electric RCVs

Greener collections

and no particulate filter and it doesn’t need changing or inspection or need cleaning.”

With no tailpipe emissions, and noise levels at just 60dB(A), compared with 80dB(A) in the traditional RCV, Graves said the eConnect was growing in popularity and currently in action in nine cities including Cambridge, Nottingham, Oxford and York.

Next up was Jack Barrett, ULEV grant project officer at Nottingham City Council, who described the council’s experience of the eCollect.

NCC was the first organisation to take delivery of the eCollect, in September 2020, and Barrett said its performance so far had been impressive.

“Our eCollects do single shifts from 7am to midday. The route is about 30-40 miles and the vehicles come back with around 40% charge left.”

He added: “They simply do the job of their diesel equivalent. They perform the same, lift the same, do about 400 to 500 compacted cycles a shift, yet save us about £50 per day on fuel.”

Barrett said drivers loved the vehicles after some initial apprehension. “They quickly came to appreciate the benefits of driving electric – the increased torque, reduced noise pollution and improved air quality,” he said, adding that some drivers became very reluctant to return to driving diesel versions.

Brian Robinson, commercial vehicle and sustainability consultant at Zemo Partnership, then talked attendees through the recently completed £32m Low Emission Freight and Logistics Trial, in which participating fleets collected data on energy consumption, cost savings and environmental impacts for over 130 trial vehicles including HGVs, refuse collection vehicles and road sweepers.

Unsurprisingly, the results showed battery electric HGVs and vans were the “star performers”, he said, cutting greenhouse gas (GHG) emissions by 50% to 80%.

The trial also assessed the performance of two retrofitted dual-fuel RCV vehicles – one a Euro-5 and the other a Euro-6.

Robinson said the trial results showed little reduction on well-towheel GHG emissions if the hydrogen was not from renewable sources. “While tailpipe emissions went down because 15% and 20% less diesel was used, if the hydrogen does not come from a renewable source then it can result in a very high carbon impact, wiping out any GHG savings,” he warned.

However, 96% of the hydrogen used in the trial was from on-site electrolysis with green tariff electricity, which is 100% renewable.

He also pleaded with organisations still running Euro-5 diesel RCVs to replace them with Euro-6, if they cannot go straight to electric RCVs, as Euro-6 RCVs deliver a 96% to 98% reduction in pollutant emissions.

Zemo Partnership has recently launched a ‘Renewable Fuels Guide’ to help operators reduce fleet carbon emissions with the latest liquid and gaseous fuels (Download at zemo.org.uk).

After the presentations, delegates put several incisive questions to the speakers, including: ■ What are the whole-life costs of electric RCVs? ■ How developed is the charging infrastructure? ■ What is the lifespan of electric RCV batteries? ■ What are the maintenance and testing requirements? ■ Is driver training required? ■ Are there variants of the eCollect in the pipeline? ■ Are trials planned on split-body vehicles? ■ When will electric RCVs become mainstream?

For the answers, watch the webinar on demand and free of charge at freightinthecity.com

Many economic indicators are looking more optimistic than they were... albeit not for everyone

Some signs of resurgence

New truck registrations

The European market for heavy trucks (16 tonnes GVW and over) is beginning the long haul back into shape.

Last year was disastrous for truck makers, hit hard by Covid and the inevitable contraction following 2019’s surge to beat new tachograph requirements. But the latest provisional data from ACEA, the European vehicle manufacturers association, show that the market is accelerating after a sluggish January.

EU heavy truck registrations in February were 8.8% up on the same month last year; the March total was 18.1% above last year’s. And registrations early last year were unaffected by the pandemic because those trucks were ordered before it took hold, so this growth is not merely a Covid-distorted statistic.

Our chart shows Q1 registrations in Europe’s six largest truck markets, comparing this year with last. Only UK registrations (so far, only estimates) are flat. Perhaps this is evidence of the additional uncertainty caused by Brexit: Irish registrations are down by 7%. The numbers in Germany and France are up by around 10%, while those in Italy and Spain have risen by over 20%. First-quarter growth of 63% saw Poland overtake Italy to become the EU’s third-biggest heavy truck market.

Inflation

Consumer prices index (CPI) inflation jumped from an annual rate of 0.4% in February to 0.7% in March.

Prices are picking up as Covid restrictions are eased, with rising diesel and petrol prices identified by the Office for National Statistics (ONS) as the largest single contributor to inflation in March.

Across the piece, it was once again rising prices in the service sector that really drove inflation. It is a year since a rise in the overall price of the goods in the ONS shopping basket: their prices have been either falling or flat every month since then.

The Covid-related downturn began in April last year, so its deflationary effect is disappearing from the 12-month inflation rate. So April’s data, published next week, are likely to show inflation in both service and goods sectors, probably taking overall CPI inflation above 1.0% for the first time since March 2020.

That upward trend is expected to continue throughout 2021. The Office for Budget Responsibility forecasts that CPI will average 1.6% in Q4. The Bank of England (Monetary Policy Report, February) reckons it will be just below 2.0% in Q4; and the median of recent independent forecasts reported by the Treasury in March is even higher, putting CPI at 2.1% in Q4.

Pay settlements will reflect this trajectory, feeding into the inflationary loop.

Haulage rates

Haulage rates in the first quarter of this year were 0.5% up on the previous quarter, according to the ONS Services Producer Price Indices (SPPI).

The good news is that this is the largest quarterly increase for a year – rates in the previous three quarters were either flat or up by just 0.1%. The bad news is that if Q1 is compared with the same quarter last year (as shown in our chart), the picture is less rosy. On this basis, Q1’s haulage rates are only 0.7% higher than a year ago. This is the smallest annual change since Q2 2017, and almost certainly due to Covid-related demand factors and the fact that diesel was slightly cheaper in Q1 this year than in Q1 last year.

Haulage rates are lagging behind the general movement in the price of services bought by UK industries. Q1’s overall SPPI, covering services from IT to cleaning and from administration to advertising, was 1.7% higher in Q1 than a year ago.

While road haulage pulled down that average, warehousing pushed it up, recording a rise of 3.3%.

Oil

After five straight months of rises, the price of Brent oil stalled in April, staying close to its March average of $65.4/barrel. So where is it headed next?

The dominant factor on the demand side is the balance between Covid-19 infections and vaccine roll-out, which determines the speed of global economic

TRUCK REGISTRATIONS (16 TONNES+ GVW)

Registra � ons, Jan-Mar

16000

14000

12000

10000

8000

6000

4000

2000

0

Q1 2020 Q1 2021

Germany France UK Poland Italy Spain

CPI INFLATION

0.8 %

0.7 %

) % ( e t a r l a u n n A

0.6 %

0.5 %

0.4 %

0.3 %

0.2 %

0.1 %

0.0 %

Aug ´20 Sep Oct Nov Dec Jan ´21 Feb Mar

HAULAGE RATES

1.6%

g n i d n o p s r e r o c n o e g n a h c % r a e y s u o i v r e p f o r e t r a u q

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

0.2%

0.0%

Q3'19 Q4'19 Q1´20 Q2´20 Q3´20 Q4´20 Q1´21

recovery. Massive countries like India and Brazil are still deep in Covid crisis. On the supply side, the power is wielded by the 10 oilproducing countries in Opec and their 10 non-Opec partners in the so-called Opec+ group.

They are progressively easing their production limits between May and July, aiming to balance supply and demand.

Evaluating these factors, the US government’s Energy Information Administration (IEA) reckons Brent will continue to average $65/barrel in Q2, but then drop to average $61 in the second half of the year.

Viewpoint Testing shake-up needed now

Steve Hobson Editor Motor Transport

It is now over a decade since Motor Transport ran its campaign ‘Stop the VOSA closures’ to halt the closure of old VOSA (before the agency merged with the DSA to become the DVSA) vehicle testing stations before the private sector Authorised Testing Facilities (ATFs) had a chance to fill the gaps.

Eleven years on, and the issue of annual testing has been thrust back into the spotlight by the Covid-19 pandemic (see feature on p20). The government claims that HGV testing is not in crisis, a statement that few in the industry would agree with. The suspension of testing in the pandemic was understandable, but the gap has left a backlog of tests that is proving difficult to clear under the current regime.

This time it is not a shortage of testing stations that is causing the problem, but a lack of examiners, who all work for the DVSA. Even before the pandemic, the ATF operators wanting to book examiners complained of inflexible working practices – no testing on a Sunday for example – and cancellations at short notice. The DVSA argued that there were enough examiners to go around and it was the operators cancelling or over-booking slots that wasted resources.

At present, only goods vehicles under 3.5 tonnes GVW can be tested by a private examiner in a car test station (if they have the right equipment such as lifts etc).

Surely the time has come for the government to liberalise annual testing of commercial vehicles and allow accredited ATFs to employ their own examiners, as has been the case in car and motorcycle MoT tests since the 1960s. It is increasingly difficult to see any justification for the current restrictions and a trial of liberalised testing needs to be undertaken as quickly as possible.

Time to change retail logistics (again)

Carl Lyon COO Hermes UK

Record numbers of people turned to online shopping in 2020, driven by lockdown restrictions alongside the ongoing growth in the sector, and 2021 shows no signs of this changing. So what does this mean for retailers and home delivery companies?

The increased volumes have enabled some organisations to invest more heavily in their supply chains – for example at Hermes we had to implement our five-year growth plan in just five months to meet demand. It has also forced retailers and their delivery providers to review their processes and become more flexible and agile. However, this is no time to be complacent as, looking ahead, the challenge for the industry continues to be the uncertainty and volatility which make planning and volume predictions a challenge.

The key will be scalability with the ability to ramp operations both up and down in response to this unpredictable marketplace. At Hermes we will be continuing to expand our ‘out of home’ services as people start to go back to work and begin to regain their weekends, making it even more important that we maximise our ability to deliver seven days a week.

Some retailers were slow to grasp the need to change, with many continuing to maintain the traditional method of having different supply chains for home delivery via a carrier, delivery to their stores and delivery to their own warehouse. This pandemic has proved that this is not always the best approach and in fact having a single supply chain that can be easily diverted should be considered.

This should also include the ability to fulfil from store – something that became increasingly common as a result of regional and national lockdowns closing shops that have valuable and possibly time-sensitive products. In addition, utilising more stores as part of the overall supply chain for ‘out of home’ collections or as an option for redirecting parcels is a great way to keep stores relevant. It also helps support a more robust e-commerce proposition and keeps stores evolving into a channel for both traditional retail and e-commerce.

The retail and home delivery sectors have proven their resilience and ability to embrace significant change, even before the pandemic, and I have no doubt that we will be able to adapt to the changing lifestyle needs of consumers, as long as we remember the three most important words – scalability, flexibility and agility.

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Jolly green giants

Pallet networks were created to reduce empty running, but what are they doing to cut carbon emissions now? Carol Millett reports

Pallet networks appear to be well ahead of the curve when it comes to sustainability. Launched around 25 years ago, when the world was largely oblivious to the looming climate crisis, the pallet network model introduced a collaborative form of road transport which has helped deliver big cuts to hauliers’ fossil fuel emissions by cutting both mileage and empty running.

Paul Sanders, head of the Association of Pallet Networks (APN) is rightly proud of the pallet networks’ contribution to sustainable road transport.

He says: “The collaboration which lies at the heart of the pallet network model is a crucial contribution to the sustainability of modern logistics – and could be a blueprint for far more sustainable methods of distribution and delivery going forwards.”

The model also ticks the box when it comes to cost efficiencies, claims Sanders. “Carbon initiatives must also be commercially and operationally valuable in order to succeed and inspire wider change,” he says. “The collaborative approach of the networks does that – it minimises mileage while giving network members a pay-as-you-go, profitable method for dealing with small freight consignments. It also gives customers an excellent, reliable and rapid method of delivery on the same pay-as-you-go basis.”

Making a difference

Recent figures from the APN show how hub-and-spoke operations help consolidate freight, delivering an average fill of 76%, compared with an industry average of 54%, reducing the number of vehicles on the road by around 800 per day and helping members cut congestion, emissions and noise pollution.

Then there is the multi-hub model adopted by most pallet networks. Palletline MD Graham Leitch says this strategy plays a central role in cutting Palletline’s emissions. “It is one of our biggest sustainable strategies,” he says, pointing to the network’s web of hubs in Glasgow, Manchester, Leicester and London, Birmingham and Coventry. “Last year, as volumes really increased, we found that members running to six multi-hubs saved around 4.5 million miles compared with operating into one central hub in Birmingham. That makes a real difference, equating to a saving of 7.5 tonnes of CO2 over a 12-month period last year.”

Pall-Ex group CEO Kevin Buchanan is another staunch believer in the sustainability of the multi-hub model. The network recently opened a 120,000sq ft Northern Hub in Rochdale within easy reach of its members across the North and Midlands.

The network has also added hub capacity by opening a 210,000sq ft facility at Watling Park, Northamptonshire – the Pall-Ex South Central Hub – which Buchanan says will help reduce mileage and driver journey times for members across the South.

Similarly, The Pallet Network (TPN) also strives to

The Palletforce Alliance Sense platform uses AI to maximise operator efficiencies

APN’s Paul Sanders says the collaborative nature of pallet networks is the original ‘green’ initiative and could be a model for other sectors

Palletline has succeeded with a multi-hub model and hitting ISO 5001 energy standards, says MD Graham Leitch help its members cut empty running miles under the mantra “optimal loading, minimal mileage”.

Commercial director Allen Rees says: “We are very careful about selecting which partners we put into our regional hubs to maximise the efficiency of using those regional links. There’s no point in someone bringing up 100 pallets and then taking half a trailer of fresh air on the way back.”

Rees also believes that being commercially sustainable is central to being environmentally sustainable.

“We are careful to help support our members’ commercial health,” he says. “This may not seem an obvious sustainable strategy, but opening a depot and then having to close it – and the impact that has in terms of wasted assets – is environmentally unsustainable.”

Appliance of science

Palletforce is using ground-breaking technology to help its members cut their carbon footprint. Its Alliance Sense platform, based on neural learning and artificial intelligence, has the ability to identify where delivery problems may occur and highlight the need for members to intervene, reducing failed deliveries and redeliveries.

It also runs bespoke software that provides a pallet space report to each member identifying the most efficient way trucks can be loaded to and from the Palletforce SuperHub, to help members reduce journeys.

Dave Holland, Palletforce sales and marketing director, says that, by leveraging the technology platforms, Palletforce “offers a number of initiatives to help our members reduce road miles, unnecessary deliveries, fuel and emissions – we are also incredibly proud to be the only network that offers artificial intelligence to help reduce the need for re-deliveries while enhancing service.”

Some networks have signed up to the ISO 5001 energy management accreditation, which requires the holder to make incremental sustainable improvements to the business every year. This is no greenwashing, box ticking exercise, says Leitch, who is proud of what Palletline has achieved since becoming accredited in 2018.

“We have to show that we are reducing our energy usage every year to keep our accreditation. It isn’t easy, but between 2018 and 2020 we have cumulatively reduced

the energy we use by just under 20%,” he explains. “We have also cut the kilowatt hours of energy used to move each pallet, down from 2.76kWh in 2018 to 2.2kWh in 2020.

“One way we achieved this was to switch all our hubs to using hybrid forklift trucks with hydrostatic drive, which reduces floor spin and dramatically cut our gas consumption. We’ve also put full LED lighting inside the hubs linked to infrared sensors and replaced all of the heating within our hubs with smart temperaturerelated heaters.”

The network is also trialling some electric forklift trucks ahead of contract renewal later this year. “These may be small wins, but these incremental gains really start to add up,” Leitch explains.

A helping hand

But how sustainable are the pallet networks if their members fail to take any action on the environmental front? UPN MD David Brown says that members across the sector are largely free agents when it comes to their sustainability strategies, but believes networks can play an important role by leading by example and supporting members’ green aspirations.

“With around 90 to 100 members in each network, there is bound to be a spread of focus on sustainability, according to the size, scale, professionalism of the organisation and the attitude of the leaders within those organisations, with some more committed than others. And network influence varies depending on how much pallet work is part of their overall portfolio,” he says. “So, I think as networks, we have an ethical rather than a policing power. It has to be partnership where we guide, communicate and encourage our members to be more sustainable.”

To this end, the network is currently backing UPN member F&G Transport’s involvement in test driving the Volta Zero as part of Volta Trucks’ Pioneer Programme.

The Sussex haulier, which has already cut carbon emissions by switching 80% of its forklift truck fleet to battery power and using 100% renewable energy, joined the trial in January this year.

Designed for inner-city freight deliveries, the Volta Zero has an operating range of up to 125 miles, which Emma Lindsley, MD of F&G Transport, says is ideally suited to the haulier’s needs, “specifically for safety, distance, and weight capacities”.

Lindsley adds that the trial will enable both F&G Transport and Volta Trucks to assess how the vehicle performs in the pallet distribution sector and is hoping it will help F&G Transport fast-forward its target of replacing the entire fleet as quickly as possible.

UPN member F&G Transport is trialling a Volta Zero for inner-city deliveries

Palletforce’s Dave Holland (above) is backing new technology, though Pallet-Track CEO Caroline Green (below) is skeptical about a rapid switch to EVs

TPN PALLET RECYCLING DELIVERS RESULTS

The Pallet Network (TPN) is helping members cut their emissions and costs through its free pallet recycling scheme.

Launched last year, the scheme encourages members to use spare trailer space to bring unwanted pallets to the network’s hub in Minworth. From there, pallets are sorted then transported to a recycling centre and made into plywood or MDF. The service helps members avoid the cost of taking their old pallets to landfill, or worse still burning them. The pallets are also transported using spare trailer space, further reducing the scheme’s carbon footprint.

TPN says the scheme has been a resounding success. By November last year it had recycled 144 tonnes of pallets, an average of 28 tonnes a month. By midFebruary this hit 300 tonnes, with January alone contributing 78 tonnes. “We’re very proud of this scheme and of how wholeheartedly our partners have committed to ensuring that their end-of-life pallets do not meet unsustainable ends,” says commercial director Allen Rees.

He adds that the scheme is a win-win solution for all. “We can provide a free solution for our partners, which saves them the cost of disposal,” says Rees. “More importantly, we are also lowering the carbon footprint of the industry and removing the strain on local landfills all over the UK.”

Brown comments: “It’s really exciting news for UPN and I am really pleased to be working with F&G Transport on this ground-breaking evaluation.”

Pallet-Track CEO Caroline Green, who took over from founder Nigel Parkes on 1 April this year, warns that any transition to electric vehicles needs to be carefully planned in partnership with government.

“The price point differential between fossil fuel and EV is nowhere near there yet, not to mention the re-charging infrastructure to make carbon-free distribution a viable reality,” she says. “And, longer term, the industry and wider government have got to have a grown-up conversation about the environmental impact of mining and importation of lithium and the sustainable strategies required for the safe disposal of the batteries that we will need, so we don’t sleep-walk out of one environmental crisis into another of our making.”

Powering forward

Leitch also has reservations about the use of EVs, believing gas-powered trucks are the way to go.

“I am personally not convinced electric trucks are the solution for the transport industry. My view is HGVs will skip a generation and go straight to hydrogen,” he says. “The interim solution is gas-fuelled trucks. However the lack of refuelling infrastructure is holding back operators from adopting this technology.

“We have a few members running gas trucks, including Gregory Distribution and, if we can get a critical mass of members prepared to operate gas-fuelled trucks, then we will look to invest in a refuelling facility at our Birmingham hub. But first we need more members to express an interest in this before we can commit.”

Pall-Ex is also backing gas trucks. The network was considering switching its in-house fleet to gas and was involved in trialling a number of Volvo gas trucks last year – but plans are now on hold. Buchanan says: “Until February 2020, we were working with Volvo trialling their CNG trucks. We found their performance to be very good, both economically and environmentally.

“However, because of refuelling issues, caused by some providers closing down their refuelling stations, that trial has been suspended for the time being.”

Despite this setback, Buchanan is confident the takeup rate by Pall-Ex members will be significant, once adequate refuelling infrastructure is rolled out.

“You will not see haulier reluctance, providing the infrastructure is there, because they make economic and environmental sense and because hauliers are open to innovation – they have to be given the margins in this industry,” he goes on.

“We found the trucks several miles to the gallon cheaper in comparison with diesel so, once the infrastructure is there, I am sure we will see plenty of hauliers rallying to the opportunity.” n

Vehicle testing Tested to the limit

Has your annual testing regime turned into a headache in the last year? Well look away now; it’s predicted to get a lot worse in the next few months, writes Chris Tindall

It was a year like no other, but unfortunately the pandemic’s impact was not neatly bookended by the start and end of 2020, and its e ects on several areas of transport continue. HGV testing is a good example of this. In fact, the effect of the DVSA’s decision last year to suspend annual testing for heavy trucks and trailers will probably only really be felt over the next four months.

Right now, in the second quarter of 2021, we are still in the eye of the storm. “The DVSA has exempted so much, it’s quiet!” says Paul Glover, ATF manager at Stan

Robinson. “But August, September and October are going to be absolutely horrendous.”

It’s a warning echoed by Scania’s aftersales director

Mark Grant, who says the summer months are likely to reveal the full scale of the problem. “We are concerned we will struggle for test dates in July, August and

September,” he confirms. “We work with our customers where we can and we are very flexible; we can work seven days a week. But it’s the availability of the testers from the DVSA which is the restricting factor for us.”

That’s not to say testing has been plain sailing ever since the government extended the regime, of course.

In fact, in Grant’s words, there was “a lot of confusion” in the early days.

Extension problem

If an operator has a green OCRS for roadworthiness, it could qualify for a 12-month extension – but not everyone wanted to and not everyone is in receipt of just one operator licence, which muddies the waters. “You could have a single customer with several operator licences – one being green and one not being green,” Grant says. “We continued to test vehicles on our R&M contracts to keep the flow correct.

“We do 36,000 tests per year on average, so all our planning systems had to be changed. We continued to get as many of our vehicles on our maintenance contracts tested as we could. Some customers didn’t want to.

“Supermarkets were very busy and other customers were happy to have vehicles tested because their business was at lower levels.

However, he goes on: “Once exemptions are withdrawn, there’ll be a massive issue with tests. The DVSA is now asking us if we can pull vehicles forward for testing.”

Mark Palin, head of customer support at Volvo Trucks UK and Ireland, says its dealer network did “a terrific job” in responding to the changes imposed upon it, but that the initial three-month extension caused problems until this was eased with the introduction of a year’s holiday.

The DVSA’s initial response to the coronavirus did

TERRIFIC JOB: Mark Palin, head of customer support at Volvo Trucks UK and Ireland, praises the response of its dealer network not go down well with everyone. Robert Wilcox, MD of Massey Wilcox, describes the withdrawal of the agency’s testing staff as “a knee-jerk reaction that was not really thought through”.

“Responsible hauliers continued to operate and maintain their fleets; their workshop staff pretty well continued their daily duties without the need to withdraw their labour wholesale as the testing staff did,” he states. “Every fleet has a well-thought-out MoT plan that neither overloads their workshops nor denies the traffic office resource when it’s most needed. This was all thrown into confusion and resulted in MoTs being bunched up in an effort to play catch-up.

“To then go about smoothing the flow back to where it was meant in some cases MoTing the same vehicle twice in 12 months.”

Wilcox says it is now finding it difficult to book tests due to the subsequent backlog and is having to send vehicles to wherever they can find a slot, incurring additional costs in fuel and workshop time.

“This is instead of having the annual flow through two local ATFs who struggle to find DVSA inspectors just when their customers want to have their vehicles MoT’d,” he adds.

“An ATF may find they can only have an inspector for two days but then their customers, the vehicle operators, may not wish to push all their MoT traffic through on those particular days.”

Grant says an industry-wide lack of DVSA testers compounds the problem and the summer peak will pile pressure on the agency: “The problem with MoT testing is they don’t pay the testers enough. The government should put its hand in its pocket. It’s an important person and they need to recognise that.

“The DVSA is hamstrung by the government and the inflexibility of the workforce.”

Proving the point

The scarcity of the resource is aptly illustrated over at Stan Robinson’s ATF. Operators must put in a request to the DVSA for the testers they think they will need, and for June, the response Glover received back “disgusted” him, he says.

“I requested a tester every day for June and then 11 days for a second tester,” he explains. “They have given us a second tester for five days. It’s just not enough for what we do here.

“We are a two-lane ATF; we are quite busy and picking up more customers all the time because of the service we provide,” continues Glover.

“It’s really peeved me, because we make the effort. I never put in for too much – I’m not greedy – just enough

to satisfy customers. What they have come back with is an absolute joke.”

Stephen Smith, chair of the ATF operators association (ATFOA), says postponing MoTs won’t just be a feature of the current pandemic. “It will be there for years,” he says. “It’s knocked out all the existing patterns – the preChristmas period, for example.

“It’s always been a challenge for the DVSA; they couldn’t handle the existing supply and demand. It was only because they forecast they couldn’t deliver testers to sites [during 2020] and to save themselves embarrassment that there was a moratorium on testing to protect their supply lines. It’s practically an industry in crisis.”

The recent review of HGV testing (see box) suggests ending the moratorium on new ATFs, but Smith points out that this will cause more problems because of the lack of DVSA testers.

“Their pool of testers gets smaller every year,” he says. “They can’t handle the attrition rate. In all of the discussions I have had, the wages are not nearly enough to retain these guys. So, in order for them to increase ATFs, they need to increase testers.

“They will first have to get testers up to a level where they can maintain the existing sites, so that’s maybe 150. Then, they’ll need to increase the testers by another 150 to start when they open more sites.”

The revenue lost by ATFs last year is obviously significant. Smith estimates that the exemptions process has meant ATF capacity has fallen by around 40% and he explains that it’s not just the £50 or £60 test fee that’s lost each time. “For every vehicle put through, it will be in the workshop for a few days prior to the test,” Smith says. “It’s a business that literally works towards the test – preventative maintenance, repairs and so on. It’s had a massive effect.”

But creating a decent revenue stream from testing is not the only concern and Glover is worried about the UK fleet trucks that are likely to have covered 600,000 miles by the time they are finally tested in 2022.

“At some point, an accident will occur and a lawyer will say ‘the vehicle hasn’t been tested for 18 months’,” he warns. “I understand we are in a pandemic and in strange times, but we should have the option to go to the RHA or the FTA or the AA for inspectors.”

Challenges ahead

But whatever concerns the DVSA may have about its ability to sort out the backlog when the exemption is lifted, its official line betrays very little.

Neil Barlow, DVSA head of vehicle policy and engineering, says: “To keep vehicles on the road and ensure the safety of our customers and staff during the pandemic, we issued an exemption to every heavy vehicle due for a test.

“This had a significant impact on the industry, and we know many operators and authorised testing facilities had to make changes to accommodate those exemptions, which has also led to uneven test demand.

“Looking at test expiry dates for 2021, we know there will be challenges later in the year if a significant number of tests do not move to earlier months.

“So we will work with industry over the coming months to help even out test demand. Doing this will help ATFs, vehicle operators and industry to avoid these issues this year – and in the future.” ■

TESTING TIMES: ATFs are expected to face a massive surge in demand later this year as test extensions end

CRISIS? WHAT CRISIS?

The heavy vehicle testing system is not in crisis. That’s the conclusion of the DfT’s review of HGV testing, at least – but it’s a view that has not found much favour among those at the sharp end of the test booking process.

However, the review does make a number of recommendations for future potential work.

Acknowledging that there is “dissatisfaction and ambiguity” about how the DVSA-ATF-operator relationship works, it suggests there could be some value in refreshing the main obligations and responsibilities of each group, before pointing out what everyone already knows: “The rapid suspension of mainstream vehicle testing in March 2020, lasting more than a quarter, has damaged the relationship between DVSA and parts of industry.”

As a result, one of its recommendations is that the agency works towards “reinvigorating relationships with stakeholders” on the communications front.

There is a fine line between what the review calls a “healthy and effective service” and how much operators will cough up for it. “Aspirations may need to be constrained by fees, or the willingness for customers to pay for improvements through fees,” it says. “Longer-term service improvement should also include consideration of altered testing intervals for earned recognition operators, with an analysis of the road safety effect and whether this could be implemented practically.”

It also recommends reviewing the current moratorium on ATFs – which would bring cheer to many – and that proposals for this change be developed for a review.

But reflecting the ATFOA’s concerns, it adds that its stakeholder panel was not unanimous in its approval to lift the moratorium, pointing out that existing ATFs would “lose out” should more open, and there are issues over how the DVSA would resource a greater number of testing sites.

In addition, consideration should be given to increasing tester capacity, to enable testing facilities to compete more effectively and operators to have more flexibility.

“Increases in tester capacity would mean higher fees than would otherwise be the case,” it cautions. “Any proposals for fee changes would need to be consulted about and introduced via regulation. This is not expected to be a ‘quick fix’.”

So, it’s not a system in crisis, according to the government, but it certainly isn’t cruising down a smooth road either.

MT Awards 2020 winner profile Service to Industry Award

‘I love growing businesses…’

Through shrewd acquisitions, Culina Group chief executive Thomas van Mourik has built a logistics business with a turnover of more than £1bn. But as far as he’s concerned, it’s all just an enjoyable hobby

Ayear as challenging as the past one has only served to enhance the reputation of Culina Group boss Thomas van Mourik. It has also underlined the resilience of his business model.

The winner of our 2020 Service to Industry Award insists that when a company stands still, it goes backwards. So, even in the grip of a pandemic, he has continued with the highly successful acquisition strategy he has developed since launching the company back in 1994.

Last June, for example, he surprisingly splashed out £98m to buy third-party logistics giant Fowler Welch – a business with a great reputation in the marketplace, giving Culina a strong foothold in the fresh produce logistics sector.

The group now boasts a turnover of more than £1bn, boosted by numerous acquisitions that complement a core focus on ambient and chilled food and drinks. The list now includes the likes of IPS, CML, Morgan McLernon, MMiD, Unity, Warrens and Great Bear – a portfolio impressive enough to see Culina also scoop our 2019 Haulier of the Year Award.

But it’s that Fowler Welch deal that van Mourik feels is of most significance: “What we are doing now is injecting investment and funds into Fowler Welch that will make it, over the next two years, of equal size, importance and profitability to Culina Logistics,” he says. “But with a market proposition that’s different. That’s fantastic.”

Until now, he has been happy to limit his ambitions to complementary businesses, but times may be changing: “That’s our playground,” he agrees, “but we’ll end up exploring ventures as part of an acquisition that do not necessarily need to stick to the core principle. Some targets are small but fit into the Culina Group jigsaw and some may be a new pillar to the group. We don’t have any boundaries.”

Understandably, he is guarded on targets, but retaining any existing management structure remains key: “Maybe a small acquisition gets absorbed, which is what we did with Robsons in Spalding,” he says. “When we bought Fowler Welch, which came from nowhere, there was no point in Robsons doing the same thing separately. But that’s an exception. If we buy a business of substance, we want to keep them the way they are. We don’t buy businesses that are broken.”

Van Mourik also remains refreshingly upbeat on the likely longer-term impact of the pandemic. “By 2022 we’ll have forgotten it to a large extent,” he says. “Humanity has got one thing sorted – we forget the bad things and always remember the good. And Covid will be another one where in a couple of years we’ll say, ‘Can you remember those times?’”

His positivity is fuelled, to an extent, by the spike in demand that many of Culina Group’s customers have enjoyed. “We just carried on with the customer base that we have always had and have done it with bigger volumes than we were expecting,” he explains. “That’s the Covid effect.”

But have soaring volumes translated into spiralling profits? “Well, under normal circumstances you would say yes, and we have been up a little bit,” he says. “But people have had to work in less than ideal circumstances. They’ve got to be 2m apart, people have been off work unwell, and we have had to hire more people while implementing a large amount of increased health and safety procedures, which puts a lot of cost into it. We’ve done better, but it has not been exceptional.

“We are in the fortunate position to be in the sector where demand has gone up. We are warehouse to supermarket predominantly and supermarket deliveries are a bit bigger than they used to be. But volumes will stabilise. I’m not counting on a benefit in the second half of the year as we come out of lockdown.”

Drinks are down

The only area of the business that has struggled, he admits, is the bonded drinks business in Hoddesdon, where volumes dipped at the start of the pandemic. But Culina Group furloughed only about 50 people here out of a total workforce of 11,000. Most have since been re-employed at other sites.

One major downside has been the “nightmare” of Brexit, where van Mourik’s views are already well documented. Suffice to say, the situation has cost Culina Group “a boatload of money” and he fears it will take a long time for trading between the UK and Ireland to return to previous levels of profitability.

He adds that the government didn’t consult with the industry in the run-up to Brexit. “The only meeting they have ever had with me was on the future of transport,” he says. “It was all about driverless trucks.”

Future challenges

For the future, he identifies two major industry challenges – labour and storage. With logistics heavily reliant on immigrants, he fears that, once restrictions ease, many workers will want to go home for a break. Others will want to go back permanently.

The storage challenge, meanwhile, stems from the impact of Brexit: “We are inevitably putting far more product through our supply chain before it gets to the consumer than was necessary,” he says. “I know storage is now at a premium. Anything that gets built gets taken.”

He admits he has missed interacting with customers, but has probably visited more of his 65 depots than he has ever done previously: “I just go off and see that everyone is doing a good job or give them a bit of thank-you. People will want to go back to work. It’s nice to talk with the technology, but it’s even nicer to meet face to face. We have people at Culina Group who can’t wait to get back in the office and have a bit of banter.”

Meeting people, he says, is his favourite part of the job – his proudest moment being the group’s 25th anniversary last year. “To be able to celebrate with the whole family of employees and do something special has been the crowning moment of my career,” he says. “It’s not about achieving any financial goal or turnover milestone, just 25 years in business. We hired Alton Towers for the day. You see thousands of people walking round there with kids and grandmas and you think: wow, what a responsibility we have as an employer.”

‘FAMILY’ MAN: van Mourik says his proudest moment was the group’s 25th anniversary last year

Returning to strategy, van Mourik is clearly a man who does things his own way, rather than following anyone else’s lead.

However, he admits to being particularly impressed with Amazon. “I like to know when my goods are being delivered,” he says. “With Amazon, their service is fantastic. What I really admire is how Amazon started at a similar time to Culina Group out of a single site, yet they have grown into one of the biggest businesses in the world. I can’t comprehend how they have managed to grow so fast.”

The conversation finally turns to alternative fuels. “I don’t think you can do electric with an HGV,” he says. “A 44-tonner needs so much battery power, it will fill the trailer and you’ll have four pallet positions left to do your delivery.”

He also rejects Siemens’ e-Highway system: “I can see it working in Sweden or Germany maybe. But in this country, we have not spent a penny on our motorway structure for years. All we have done is turn the hard shoulder into a motorway. We call it a smart motorway, but there’s nothing smart about it. We have a problem. We are a nation of patching up.

“If I were a betting man, I’d say hydrogen is where we’re going. We all need to go electric, but unless we get an opportunity to charge the vehicle in a very speedy way, wherever we go it’s not going to work. The infrastructure isn’t there. At the moment we’re dreaming.

“Biofuels are far more of a goer. But again the availability of that is not that great. And it needs to be pushed by the big boys.”

However, like many big operators, he admits he doesn’t want Culina Group to end up being the guinea pig for failed experiments. “And then you also have customers that were very keen on us going down the green route until you tell them what it’s going to cost,” he laughs. “All of a sudden they’re not green any longer.”

Ultimately, van Mourik seems far more focused on acquisition and expansion than fuel options. “I love growing businesses and seeing things become even more successful,” he smiles. “I’ve grown up with it. It’s not stress, it’s 24 hours a day for me. I have my phone switched on even when I’m on holiday. It sounds a bit awful, but it becomes a bit like a hobby. I truly enjoy it. It’s a lot more than work.” ■

MT Awards 2020 winner profile Home Delivery Operator of the Year

Home and dry

If you’re named Home Delivery Operator of the Year for four years running, you must be doing something right. And what DPD UK did right was to make exhaustive efforts to get proper feedback from customers and then act on it

NEVER STANDING STILL:

DPD UK executive director of sales, CRM and customer services Elaine Kerr For DPD UK to have won the MT Home Delivery Operator of the Year award for the fourth year running is no mean feat. Every year, competition is erce and submissions impressive. So what made DPD stand out from the crowd yet again, this year? According to the judges, DPD’s ‘X factor’ lay in its ability to communicate with customers, consumers and its supply chain, plus its commitment to using that feedback in innovative ways to improve its services.

DPD described 2019 as being a “stagnant” economy, but this was turned on its head early in 2020 as coronavirus struck and the first lockdown took hold.

“Volumes leapt by 55% within 10 days of the start of the coronavirus national lockdown,” says Elaine Kerr,

DPD executive director of sales, CRM and customer services. “We were hit by one and a half years’ worth of growth in just three months and by the end of the year we had handled three and a half years of projected growth in just nine months.

“Handling this surge has meant following three key imperatives that have driven all our goals and objectives during lockdown: stay close to the business; be agile, speedy and responsive; maintain our amazing culture.”

While DPD does not publish the split between its B2B and B2C deliveries, it does reveal that 10 years ago, only 12% of its traffic went to home addresses and since then all the growth has been in B2C. “Having said that, B2B has been a key part of our business for 50 years and that absolutely remains the case today,” says Kerr.

Secret of success

Other parcels companies have struggled to mix B2B and B2C deliveries in one network – so what is DPD’s secret?

“We can’t really comment on why other companies have struggled or gone out of business,” says Kerr. “We do know that great planning and attention to detail works for us and means we can provide leading service levels for both B2C and B2B services. Some of our customers require both anyway, so it’s not always as black and white as one might think.”

As well as the ‘red’ DPD network, the ‘blue’ DPD Local (formerly Interlink Express) is a franchise operation specifically geared to providing a more local service for shippers with smaller volumes. So would DPD ever consider merging the two?

“They are run totally separately, except in peak periods when there’s a bit of synergy between networks for

DRIVERS ON THE FRONT LINE

The best IT systems in the world are useless without a motivated driving workforce, who after all are in the front line of any home delivery operation.

Since 2019, DPD driver numbers have exploded from 5,000 to 12,000 today, following a huge recruitment drive during lockdown. Kerr says keeping drivers happy is about more than merely earning money.

“They earn a very good living with us, but the rewards go beyond just the financial as we have several recognition programmes in place for drivers on the front line and indeed for warehouse operatives and other colleagues working hard behind the scenes,” she says. “Motivation has been more crucial than ever in the last 12 months, as we’ve been asking our people to go above and beyond every day.

“To that end we invested £2m in 2020 on 100,000 morale-boosting gift items for our people including sunflower seeds, kids’ games, chocolate brownies, curry sauces and a special 12 days of Christmas advent calendar – plus another £200,000 on 1,000 laptops to help our people who were home-schooling their children, but who didn’t have their own computer.

“As a company I’d also say we’re now better than we’ve ever been at sharing our strategy with all 22,000 members of Team DPD and this also helps people buy into the DPD ethos, as they understand very clearly how their individual roles contribute to our overall success.”

efficiency reasons,” says Kerr. “No, they won’t ever merge.”

The criteria for the Home Delivery Operator award say the winner has to position themselves as the “home delivery operator of choice for both the retailer and consumer”. DPD’s rise to market leader in the B2C parcels market shows it is meeting this criterion, so how does it stay at the top?

“Staying at No 1 means never standing still,” explains Kerr. “Our aim is to keep raising our game, keep innovating, and keep asking ourselves: what’s the next thing that will make a customer go wow? Also, how can we make life easier for shippers and shoppers alike? In recent years that approach has really delivered results, as we partner with engaged users of our app to co-create new services.”

Personal service

DPD’s campaign to make its delivery service more personal, launched in 2019, is a good example. Dubbed ‘Tiny Noticeable Things’ (TNTs), the campaign was inspired by DPD’s regular customer feedback sessions, in which one chief executive suggested that “it is the tiny noticeable things that separate the truly great companies from the rest”.

With this in mind, DPD used its consumer app to create a 45,000-strong (now 60,000) focus group with which it worked to formulate and launch six new consumer offerings. They include ‘Message the Driver’, which lets consumers send drivers useful information, such as accessibility or precise location; ‘You’re Next’, which alerts consumers when the driver is five minutes away, so they can listen for the doorbell; ‘In-flight’, which allows recipients to make changes to their delivery once it’s already out on the road; and ‘Rate My Driver’, which customers can use to give doorstep experience feedback.

The results were rapid, with DPD producing its best ever service level for on-time delivery of 98.95% in 2019, up from 98% in 2018, with 2.75 million more parcels delivered right-first-time compared with the previous year.

The improvements were also reflected in DPD’s ranking in MoneySavingExpert’s 2019 poll in which 9,475 home shoppers rated the delivery services of all the major UK delivery companies. For the seventh successive year, DPD led the field, with 63% of voters rating its service as ‘great’, compared with 41% for its nearest competitor.

Nearly 70% of DPD’s top 100 retail customers have been with it for five years or more, which is unusual in a fickle market where customers sometimes move to save pennies on a delivery, especially bearing in mind that DPD is often more expensive than rival carriers.

“First of all, it’s worth saying that this kind of loyalty is priceless, as it means we can keep investing for the future in our people and in our network,” says Kerr. “There are lots of carriers out there and therefore lots of choice for retailers, but I wouldn’t say the market is fickle. It is probably less price-driven than in the past, and customers these days take a much broader view of value – they want a right-first-time delivery, flexible options for consumers and, most of all perhaps, a doorstep experience that reflects the quality of their own brand.

“Many of our loyal customers tell us that it’s worth paying a premium to use DPD because right-first-time deliveries mean far fewer consumer complaints in their contact centres, which in turn reduces their costs.”

“They also really value loyalty from their customers and if they get a first-class doorstep experience from DPD, repeat purchases are more likely. This comment from a consumer is typical of many testimonials we get and probably answers the question better than we can!”

TAKE A BOW: (Left to right) Steve Hobson, MT editor; DPD UK CEO Dwain McDonald; and Kevin Buchanan, group chief executive officer of sponsor Pall-Ex

When asked to put herself in the shoes of a retail customer and say what DPD does well and not so well, Kerr says: “What we do well – we provide great insight into what consumers value most in the delivery experience: choice, convenience and control; great tech; great people. As for not so well, again that’s where Design Space on the app comes into play. It’s a space where 60,000 home shoppers can improve what we do. That makes it one of the biggest focus groups in the world and the ideas people come up with are ones that neither we nor retailers have thought of ourselves.”

Emissions reduction

DPD has also led the market in cutting its carbon footprint. From 2017 to 2020, the company grew its EV fleet from just five to 622 (now 800), making it the UK parcels sector’s largest electric delivery fleet. It has also created the first network of all-electric micro-depots in London, cutting its CO2 emissions by 95.8 tonnes a year.

After scouring the market without success for a suitable zero emissions e-cargo bike, last year DPD decided to invent its own, in partnership with British start-up EAV. Dubbed the EAV P1, the cargo bike is suited for pedestrian zones, roads and cycle lanes and once fully deployed will not only save DPD 30 tonnes of CO2 a year – but also lower costs.

Our judges were impressed by DPD’s “outstanding customer service levels and innovative introduction of electric vehicles”, with one saying it was “a fantastic submission which answered all the questions”. One commented: “DPD displayed significant innovation in two key areas. First, improved end-recipient engagement; and second, innovating in its vehicle fleet – not just through procuring cleaner vehicles, but by working with the supply chain to develop new products.” ■

30 September - 2 October 2021 Harrogate Convention Centre

NEW DATES ANNOUNCED

In order to comply with recently announced government guidelines the show will now run from 30 September - 2 October 2021.

REGISTER NOW

Register for your FREE tickets at tipextankex.co.uk

For all exhibitor enquiries, please contact Vic Bunby Tel: 07771 812990 Email: tiptank@roadtransport.com