Motor Transport 22 January 2018

Sharp ■ Informed ■ Challenging

22.1.18

NEWS INSIDE Caught red-handed

DVSA checks reveal scale of fraud device problem p3

Trouble’s coming

Concerns are increasing over the driver shortage p6

Pallet network exploring opening a dedicated distribution facility

OPERATORS IN THIS ISSUE

Palletline primed for Amazon site?

CitySprint..............................................p6

By Chris Druce

Safety first

Kier Environmental boosts its vehicle fleet security p8

Culina .................................................p14 Deutsche Post DHL ................................p8 DHL Supply Chain ..................................p3 Eddie Stobart Logistics .................... p8, 16 Fowler Welch......................................p14 GEFCO UK..............................................p8 Hermes...............................................p19 Kier Environmental................................p8 NFT Distribution ..................................p14 Palletline ..............................................p8 Palletways UK.....................................p19 Reed Boardall .....................................p14 Walkers Transport...............................p19 WMB Logistics ....................................p14 XPO Logistics ........................................p3 Yearsley Logistics................................p14 Yodel................................................p6,10

Palletline is considering opening a dedicated distribution facility for Amazon, after its relationship with the online retailer delivered significant volume for the pallet network in the run-up to Christmas.

Speaking to MT, Palletline chief executive Graham Leitch said discussions with the network’s shareholder member hauliers were under way.

“It would be in the Midlands area and a hub for the members. It wouldn’t be Palletline doing it directly. It would be a separate sortation facility for Amazon freight, which would relieve pressure and free up capacity for the standard freight moving through the network.

“The site would likely do other things too, but what we are looking at doing is drawing all the Amazon freight into that site,” he said.

Palletline is the only pallet

network to hold Amazon’s preferred carrier status for inbound deliveries. It handles the bookings and administration for its members, who then run into Amazon’s 12 fulfilment centres around the UK. Leitch said that during the inbound peak for Amazon, around the middle to end of November, 10% of Palletline’s network volume was product destined for the retailer.

With this boost, Palletline’s newly published accounts for the year to 30 June 2017 showed a 12% increase in turnover to £35.4m (this excludes transactions between network members).

The accounts also show a 6% decrease in network services turnover to £17.19m and a corresponding dip in pre-tax profit for the year to £1.2m (2016: £1.6m).

Leitch said he was pleased with the top-line growth and said the reduction in network services turnover – offset over-

all by acquisitions during the year including Mike Watson Transport and ABE Ledbury – was a direct consequence of reducing hub fees in the period.

This had made members more competitive while maintaining enough revenue to invest in the network, said Leitch.

Palletline has seven regional hubs run by members in addition to its central site near Birmingham, and Leitch said: “We have [also] reduced the hub fees to drive volume to where we have capacity.”

Currently 45% of total volume comes through the regional hubs, up from 30% in 2015.

In the period Palletline added eight new members to its roster: David Hathaway Transport; F&G; HE Baldry (Haulage); Alton Transport; BDT Transport; John Truswell & Sons (Garage); Andy Crane Transport; and Door to Door.

Fears follow Carillion collapse Thousands of jobs and businesses are in jeopardy after the collapse of construction giant Carillion, according to the RHA. The association said it was concerned about the potential effects on the road transport industry, and predicted many of its members will take a hit.

Policy and public affairs director Rod McKenzie told MT: “Thousands of suppliers are at risk of not being able to claim all the money they’re owed, putting their future and many thousands of jobs in jeopardy. We urge the government to move swiftly to offer every support to companies vulnerable to the aftershocks of Carillion’s collapse.”

Carillion announced it would enter liquidation last week (15 January). The business had 43,000 employees worldwide, including 20,000 in the UK, and held an O-licence for more than 200 vehicles across the group.

■ Read the editor’s thoughts on the collapse on page 12.

POWERING ON: NFT Distribution recorded its highest-ever annual turnover in the year to March 2017, with a more than 27% increase to £202m. It also essentially halved its pre-tax loss, which was £9.5m (2016: £18.3m). NFT chief financial officer Jay Edwards said the integration of NR Evans had broadened its offer and led to a recent deal outside its traditional grocery market. A three-year renewal with Asda and the recent achievement of Aldi preferred platform status will “see a step change” in the business this year, said Edwards.

Opinion

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Focus:

Warehousing

p11

Temperature

controlled

p14

Interview:

Alex

Laffey

p16

Careers

Hub

p19

18/01/2018 17:18:52

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18/01/2018 13:15:25 18/01/2018 13:00

News

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M&S calls time on Neasden DC Marks & Spencer is to shut the doors of its Neasden, north London DC. However, the high street retailer said it will open a 495,000ft² clothing and home DC in Welham Green, Hertfordshire, early next year.

The plans form part of a fiveyear transformation programme, announced in November 2017, which aims to modernise the business.

This will see M&S continue its journey towards a singletier, or direct supply, model for its clothing and home distribution network. Multiple smaller sites will be replaced by larger facilities.

Neasden, which is operated

by XPO Logistics with DHL Supply Chain contracted to handle the transport, will see its work transferred to other M&S locations.

Both firms have entered into a period of consultation with the 380 affected employees.

A spokeswoman for DHL Supply Chain told MT: “Affected staff have been informed of the situation and will shortly enter into consultation with the company and union representatives to discuss its implications.

“Both DHL and M&S stress that the proposed changes are based on commercial reasons and in no way reflect on the performance of the Neasden operation.”

DONE DEAL: GRS Group has acquired construction and waste materials haulier S Walsh & Sons for an undisclosed sum. The London-based haulier, which runs a 100-strong fleet and employs 175 staff, specialises in the removal, haulage, handling and recycling of construction and waste materials.

The company is working on a number of the capital’s major infrastructure projects, including Battersea Power Station, the Thames Tideway Tunnel, HS2 and the Kings Cross redevelopment. Announcing the acquisition, GRS Group, a construction aggregate trader and handler, said the deal was mutually beneficial, providing GRS with access to key locations in London for the import and export of bulk materials, while giving Walsh access to GRS’s nationwide customer base, supply partners and facilities for construction waste.

Fraud devices including AdBlue emulators found in one in 12 trucks in DVSA checks

HGVs caught cheating emissions regulations

By Emma Shone

One in every 12 HGVs checked for emissions fraud devices were found to be fitted with one during a DVSA crackdown that took place between August and November last year.

Of 3,735 trucks stopped 293 (8%) contained cheat devices such as AdBlue emulators, which prevent AdBlue systems from operating and increase vehicles’ NOx output.

The DVSA announced it would be conducting the searches last June in a bid to crack down on operators using

the devices to cut running costs.

A total of 1,784 trucks from the mainland UK were stopped and 151 (or 8.5%) were found to be fitted with emission cheat devices. However in Northern Ireland, while just 294 trucks were stopped, 60 of these – or 20% – were found to have devices fitted.

The DVSA stopped 1,657 foreign-registered vehicles, 82 of which contained cheat devices (5%).

Hauliers discovered using a cheat device were given 10 days to remove it or face a £300

fine. The DVSA will also visit 100 operator sites to check the rest of their fleets are compliant, and said it had already passed multiple cases to the traffic commissioners.

Gareth Llewellyn, chief executive of the DVSA, said “We are committed to taking dangerous lorries off Britain’s roads. Stopping emissions fraud is a vital part of that.

“Anyone flouting the law is putting air quality and the health of vulnerable people at risk. We won’t hesitate to take action against these drivers,

operators and vehicles.”

RHA chief executive Richard Burnett said: “The industry is making great strides in helping reduce harmful toxins through the adoption of greener vehicles and technologies, so we take a dim view of the few who use emulators and other methods to cheat the system.

“For the short-term savings a haulier may enjoy by illegally modifying their lorry, in the long-term it would cost them a lot more if they lost their O-licence.”

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18/01/2018 10:19:07

“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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18/01/2018 10:19:25

News

motortransport.co.uk

IT’S A GAS: CitySprint is trialling its first hydrogen powered van in London, working towards the goal of having an emission-free fleet in the city by 2020. The courier has developed the van with Renault, and its client Mitie will run the vehicle in the capital for the next six months. CitySprint will compare the van’s performance to that of other green vehicles on its fleet. It already runs four electric vans and a fleet of cargo bikes in the city.

The new van has a 200-mile range and runs on electricity generated by hydrogen reacting with oxygen within the vehicle. The only emission from the chemical reaction is water.

Survey reveals a lack of professional drivers is an even bigger worry for firms in 2018

Concerns increasing over driver shortage

By Emma Shone

The driver shortage is a bigger cause for concern to the industry in 2018 than it was last year, according to a survey.

Almost half of UK transport businesses believe the driver shortage is the biggest barrier to business growth, according to Paragon Software Systems.

The routing software provider spoke to more than 100 UK transport businesses, 46% of which said the shortage of skilled drivers and workers was the biggest barrier to success; a third more than the 36% who believed this when asked last year.

The firm’s annual customer survey asked respondents what

Axis appoints sales director Axis Fleet Management has appointed former Fraikin national sales manager Steve Lymer as its sales director.

The role was previously held by Leigh Goodland, who became MD at the end of 2017.

Lymer has also worked as sales and marketing director at SDC Trailers and as a regional business manager at Volvo Trucks UK. 6 MotorTransport MTR_220118_006.indd 6

needed to be done to tackle the shortfall of young talent in the sector, to which more than 33% said more education and training incentives were needed, including more apprenticeship schemes and more clearly defined career paths.

A quarter of people felt

better pay and conditions would help, while the familiar concerns about the public’s perception of the industry were also raised. The next biggest concern was transport costs, which 13% of respondents cited as their largest issue.

Paragon also found that 86%

CRITICAL CONCERNS Driver shortage Transport costs Congestion Lack of investment Urban transport restrictions Other

Respondents citing it as their biggest issue (%) 46.6 13.4 7.2 7.2 6.2 19.4

of respondents had faced increased customer expectations in 2017. These included calls for greater visibility and more regular delivery services.

Looking at the future, 45% of those surveyed said they were in favour of driverless trucks on UK roads.

Paragon Software Systems MD William Salter said: “The road transport sector continues to face considerable challenges around resource management and service delivery. The findings of our survey highlight the importance of using routeing and scheduling software to help manage all available drivers and vehicles at an individual resource level.”

Senior TC Turfitt to speak at Microlise event Senior traffic commissioner Richard Turfitt will speak at this year’s Microlise Transport Conference.

Turfitt said he will use the event at the Ricoh Arena in Coventry on 16 May to tell the industry about the Office of the Traffic Commissioners’ work to modernise the service.

“By the time of the conference I will have been senior traffic commissioner for a year, and in a position to update the industry on the continuing work we are doing to reform processes and support compliant, responsible operators and drivers,” he said. n To register for free, visit microliseconference.com, where you can also make nominations for the 2018 Microlise Driver of the Year competition.

Peeler steps up to take top role at Yodel

Stephenson back at Ryder

Yodel CEO Mike Cooper will leave the business at the end of this month, leaving chief financial officer Andrew Peeler (pictured) to become the business’s fourth chief executive in just over five years.

Peeler, who joined the parcel carrier in September 2017 from Bupa, has board and executive experience with companies including Cadbury Schweppes, Unilever and Premier Foods.

Cooper joined Yodel as CEO at the beginning of 2016, and is leaving to take on the role of CEO at Eurostar.

In a recent interview with

Shaun Stephenson has rejoined rental and contract hire business Ryder as its director of engineering.

Stephenson was head of operations at Ryder until 2012.

The company said his new role acknowledges the increasing importance that engineering is playing in the ownaccount and logistics sector.

Stephenson has held senior fleet roles at major truck operators – most recently as director of fleet at G4S and, before that, director of fleet at Bidvest Logistics. He has also worked for Biffa and Arla Foods.

MT (8 January), he discussed the four-point plan he had put in place during his time as Yodel CEO in a bid to turn around the habitually lossmaking business.

Yodel executive chairman Dick Stead said Cooper had “put client and customer insight at the heart of Yodel”.

“I am very pleased that Andrew has accepted the challenge. He has demonstrated rigour and focus and provided clear direction. He is passionate and ideally placed to step up to the CEO role,” he said.

Peeler said: “We look forward to completing the business transformation and firmly establishing Yodel as the retailers’ carrier of choice.” l See page 10 for more on the challenges Yodel faces.

22.1.18

18/01/2018 11:32:44

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18/01/2018 10:21:02

News

motortransport.co.uk

The firm upped vehicle security after a member of the public forced entry to one of its HGVs

Kier protects its fleet with security systems

By Hayley Pink

Kier Environmental has introduced two new security systems to protect its municipal fleet from theft and damage.

The first, Ident, was designed by previous MT Innovation Award winner Vision Techniques, and prevents the firm’s refuse collection vehicles being driven away by an unauthorised user.

Kier Environmental director Darren Judd, who is responsible for a national fleet of 750 HGVs, approached the technology firm for a security system after two incidents highlighted a need to boost safety measures.

“One of these involved a member of the public entering a vehicle by force and trying to drive our vehicle,” he said.

“We needed something to safeguard staff and property from the threat of vehicle theft, but ultimately public safety was the decisive reason.”

Judd said: “We looked at systems that use proximity detection, but if tags are left in the vehicle they circumvent the security.

“Ident was the only security system that guarantees vehicle

lockdown when the driver is away from the cab.”

Ident requires drivers to present an RFID tag, which is worn on their wrist, to a reader in the cab before the vehicle can be driven. The system uses

passive RFID alongside sensors that recognise seat pressure and door position.

Once a driver leaves the seat for three seconds, the pressure sensor recognises they are gone and Ident locks down the vehicle. Even if the driver leaves the tag in the vehicle (for example, under a seat) it will remain immobilised.

The system will be fitted to all new municipal fleet purchases and across the Bridgend fleet.

Kier has also partnered with Brigade Electronics to install four-camera systems in its 40-strong fleet of 18- to 26-tonne RCVs in Walthamstow, London.

The company holds a waste and recycling contract with the London borough and made the decision after sustaining vehicle damage on the routes. The systems record even after the ignition has been switched off, providing 24-hour surveillance for the depot.

8 MotorTransport MTR_220118_008.indd 8

Leeds City Council is asking businesses for their views on its proposed Clean Air Zone (CAZ).

In December 2017, it proposed the introduction a category B charging zone in the city centre, which would affect HGVs, buses and coaches.

The consultation asks for views on whether a London-style charging regime, whereby HGVs would have to pay £100 if they were not Euro-6compliant, is appropriate for Leeds.

It also wants to know whether a ‘sunset period’ should be considered, which would allow certain vehicles more time to comply with the CAZ requirements.

■ To participate, go to leeds.gov.uk under the business section.

Brexit briefing

Three added to UK Mail team UK Mail has made a trio of appointments to its senior management team after significant growth following its acquisition by Deutsche Post DHL in 2016.

Former director of sales and marketing for Palletline and GEFCO UK Martin Rantle has joined as vice-president of sales, and will be responsible for increasing parcel volumes at UK Mail.

Scott Laird, who has been with the business for 12 years, is now vice-president of operations. He will oversee health and safety and network development.

Former director of marketing Ross Hunt has been promoted to vice-president of marketing.

Consultation on Leeds CAZ plans

TRAINING DRIVE: Eddie Stobart Logistics has opened a second training academy after the facility it made available to the public last year proved highly successful. Stobart opened its formerly in-house academy in Appleton to all in September 2017 to satisfy demand from customers and “safeguard the flexibility and agility of our industry”, according to CEO Alex Laffey. The new academy in Crick, Northamptonshire, will have instructors providing training in driving, Driver CPC, FORS and CLOCS, among other qualifications.

■ In the year to 30 November 2017, Stobart more than doubled its e-commerce turnover from £49m to £103m. Its overall group turnover increased 12% to £618m in the period. Read MT’s interview with Laffey starting on page 16.

Get the latest Brexit news with a free online briefing next month from the FTA in association with MT. Every road transport operator in the UK will be affected

by Brexit, not just those undertaking international journeys.

Any delays clearing vehicles and loads at UK borders – especially with Ireland– could have serious implications.

Limits on immigration could make recruitment of foreign drivers and warehouse staff harder when the UK leaves the EU on 29 March 2019, worsening the skills crisis.

These and other issues will be addressed in a free webinar

by James Hookham, deputy CEO of the FTA, to be held on 12 February at 12.30pm.

■ To register, go to the events section of fta.co.uk.

22.1.18

18/01/2018 11:22:27

News

motortransport.co.uk

Transport body has identified ‘strategic development corridors’ in which it will improve connectivity

TfN reveals plan for 2018-50

By Emma Shone

The volume of freight moved on roads in the North could increase by 50% by 2050, according to Transport for the North (TfN).

In a draft of its strategic plan for 2018-50, which was released on 16 January, the transport body outlines its plans to tackle the increased demands on its road infrastructure.

This growth, it said, will be crucial to projected gross value added increases in the region, and will help to close the economic gap between the North and the rest of England by 2050.

It adds that the road transport industry would not currently be able to meet the needs of future heavy bulk markets.

To support the sector, TfN said it will strengthen links between key sites such as ports, and improve journey times and route reliability.

The body has identified seven key areas in which it will improve connectivity. One of these ‘strategic development corridors’ is focused on improving road links between Scotland and Yorkshire.

TfN has also outlined plans

for multi-modal improvements in four key zones: the central Pennines; the southern Pennines; the West and Wales; and the energy coasts of the East and West of England.

The plan outlines numerous developments within each of these corridors to boost transport in the regions, including better access to airports and ports and improved A-road corridors.

The RHA said it welcomed the vision for a boosted economy in the North, but questioned whether the estimated yearly funding for the transformation plan would be enough to bridge the gap between the North and the rest of the country.

Chief executive Richard Burnett said: “An extra £700m to £900m a year investment might sound like a lot, but we still don’t know what the changes to the road network to accommodate future generations of vehicles is going to cost. So we need to understand how robust this plan will be against competing demands for funding.”

TfN will run a public consultation on the draft until 17 April. A final version of the

CORRIDORS IDENTIFIED FOR IMPROVEMENT

E

A

B C D

plan will be submitted to the government later this year.

The Federation for Small Businesses said work should get under way immediately to prepare the North for the growth outlined in TfN’s plan.

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Its national chairman Mike Cherry said: “Small businesses need a dense, reliable and wellmaintained road network to be able to grow and become more productive, so investing in roads and rail is vital. This

GMB wins employment status battle with Amazon courier

Tructyre added to Michelin Group stable Michelin Group has acquired truck tyre supplier Tructyre Fleet Management in a move aimed at expanding the group’s regional presence in the commercial business sector.

The acquisition will see the Tructyre service brand run as part of a strategic alliance with Michelin’s tyre distributor ATS Euromaster, which has 335 service centres across the UK. Tructyre, which has 26 service centres across the UK, said the deal was part of a business plan to provide a strategic partner to enable further growth and giving founder and MD Glen Sherwood an eventual exit strategy.

Multi-modal: A: Connecting the energy coasts B: Central Pennines C: Southern Pennines D: West and Wales Road: E: Yorkshire to Scotland

is an important next step for businesses and communities.

“Although this is a longterm plan looking ahead 30 years, small businesses need work to begin without delay.

It’s critical that small firms are given a chance to secure any procurement opportunities before work starts,” he added.

The Confederation of British Industry described the draft plan as a significant milestone in the development of the North.

CBI MD for infrastructure and people Neil Carberry said: “The publication of Transport for the North’s Strategic Transport Plan is a significant milestone in delivering the infrastructure that is needed to boost productivity across the whole of the North.

“Their plans for improved connections between the towns, cities and economic centres, which will drive longterm growth, reflect many of the priorities highlighted by businesses in the North.

“Reaching this stage is a testament to the hard work and collaboration of elected and business leaders, who will be looking to see progress continue at pace.”

GOLD STANDARD: Wimbledon, London-based haulier ELB Partners has maintained its FORS gold status for a fourth consecutive year. The Pallet-Track member runs a 40-strong fleet, and has spent around £5,000 per vehicle on additional technology to safeguard vulnerable road users. This includes a fifth camera on the driver’s side to remove blind spots, transparent panels behind the driver’s shoulder to improve visibility, and left-turn audio to warn cyclists if it is about to turn.

“I am delighted,” said Peter Eason, MD of ELB Partners. “It is a massive investment in time for our staff, who work incredibly hard on this.”

A courier firm that works with retailer Amazon has settled four cases with its drivers and the GMB over an employment status dispute.

The GMB union, representing drivers at UK Express, argued that they were employees rather than self-employed and should therefore be given the benefits that come with employment, including annual leave and the minimum wage.

The GMB initially brought the action against UK Express last April.

Evidence that the drivers were employed, the union said, included the fact they were subject to poor performance reviews and were forbidden from working for competitors.

The union said UK Express chose to settle with the drivers outside of an official tribunal to prevent more cases being brought forward.

The GMB’s legal lead Maria Ludkin told MT the union would be “seeking meetings with the company to now resolve this matter through negotiations, to avoid further litigation”.

In a statement on the case, Ludkin said: “Some employers seem to think they can avoid paying the minimum wage, or giving their workers the protection.

“However, as Amazon and UK Express have now realised, this is not optional – it’s the law.”

MotorTransport 9

18/01/2018 14:33:25

Opinion

motortransport.co.uk

As the courier’s third CEO in five years steps in, analyst Frank Proud argues that its future remains hopeful

Does Yodel have a clear calling?

While the full story of peak 2017 has not yet been told, it looked like, this year, Yodel had sailed through the Christmas period with only positive headlines. The company announced it had seen a 20% improvement in its TrustPilot rating between Black Friday and Christmas Day, and that 82% of customers had reported a “good” or “great” delivery experience via its feedback programme.

However, there was a jolt earlier this month with the announcement of the departure of its CEO, Mike Cooper (pictured), who will be returning to the passenger transport sector as the new head of Eurostar.

This inevitably put Yodel in the spotlight once again. We have sometimes been asked whether we think the company has a future in the competitive UK delivery market. The answer, of course, is that it depends.

Financial performance

Yodel’s financial performance since its formation from the combination of Home Delivery Network Limited (HDNL) and DHL Domestic in 2010 has been such that, had it been a standalone commercial entity, it is unlikely it would have survived.

Cumulative losses of almost £500m since the merger mean that it has had a requirement for funding from its owners, the Barclay brothers, for the past seven years. However, the question of whether Yodel has a secure future is not one that can be answered on purely commercial grounds.

There are four good reasons to believe that Yodel will continue to be 10 MotorTransport MTR_220118_010.indd 10

a fixture in the market.

Firstly, and most importantly, it might be taking a while, but the company is visibly being turned around. Yodel might have represented a very large pit for its owners to sink their money into but, certainly since the arrival of Dick Stead as executive chairman in 2012, it has not been a bottomless one.

Each set of results has shown progress being made, with losses reducing, market positioning becoming clearer and initiatives implemented.

Yodel’s misfortune has been that its turnaround task has been made ever harder because the market has not stood still while it has gone about fixing its issues: rather its competitors, in particular Hermes, have continued to innovate and to raise the bar for Yodel to get back on terms.

Secondly, Yodel and its predecessor businesses, Home Delivery Services

and White Arrow, owe their existence not to their own standalone commercial attractiveness, but to their strategic importance to much larger businesses.

That is, to the big home shopping groups with which they have always been associated – originally Littlewoods and GUS respectively, and now Shop Direct – for whom delivery capability is critical.

The biggest recent threat to Yodel’s future might have been in the middle of last year. Press reports then suggested that the Barclays were close to selling Shop Direct to private equity investors but could not agree a price.

Had the sale gone through (and had Yodel not been included in it) then the strategic case for them continuing to fund Yodel would have disappeared.

Following the failure of that deal, Shop Direct was refinanced last October via a £700m high-yield bond issue, which suggested that sale plans were no longer an immediate prospect..

Thirdly, as Rentokil demonstrated during its painful ownership of City Link after the Target merger, exiting from a parcels business in the absence of a buyer (there are no very obvious candidates), is not necessarily straightforward. Faced with heavy ongoing losses, Rentokil could not close down City Link because the exit costs, including unexpired leases and redundancy payments, were always far higher than the trading losses.

Finally, the level of investment that has been made in Yodel does not suggest a lack of commitment to its future. New depots have been opened, information systems been upgraded,

processes have been re-engineered and, in the run-up to peak, the business control tower was opened to co-ordinate all operations.

In addition, a succession of managers with impressive experience at leading organisations has been recruited.

It’s hard to imagine that a series of people with such strong CVs would have been persuaded to join the company had they not received convincing answers to the question of Yodel’s future. This includes new CEO, Andrew Peeler, who joined the company in September as chief financial officer.

Work in progress

Yodel’s turnaround has further to go.

It still does not have as clear a market positioning as its rivals such as Hermes, DPD and Royal Mail. While peak volumes were up, its latest accounts show it is still lossmaking, and, while customer satisfaction metrics have improved significantly, its brand still has negative associations for many consumers.

Would the Barclays have backed Yodel when it made its first big losses in 2011 if they knew that they would still be funding it seven years and half a billion pounds later? Possibly not, but those losses are sunk, and having seen it through much worse times, it’s hard to see why current performance would cause them to pull the plug now, given the progress that has been made.

■ Frank Proud is the founder and director of market analyst Apex Insight.

Go to apex-insight.com for more details.

22.1.18

18/01/2018 08:57:04

Focus: Warehousing

motortransport.co.uk

Consents rife but more Fresh perspective needed to meet demand A spate of major planning consents has been welcomed by distribution property experts, but they say more will be needed to tackle the shortage of development sites in key locations.

At Magna Park in Lutterworth two extensions are planned.

A 3 million ft2 scheme by DB Symmetry was approved by Harborough District Council in November. So, too, was a 4.5 million ft2 development by Magna Park Lutterworth’s original developer Gazeley, but this decision was overturned at an Extraordinary Council Meeting on

GLP buys Gazeley Global warehouse provider GLP has completed the $2.8bn (£2.1bn) acquisition of one of the UK’s largest logistics developers, Gazeley.

The acquisition will allow GLP, which is listed on the Singapore stock exchange, to expand into Europe.

Gazeley has a land-bank that could support 16 million ft2 of development in the UK, Germany, France and the Netherlands.

GLP chief operating officer Steve Schutte said: “We are committed to a long-term growth strategy in Europe and are excited to be building on the Gazeley brand.”

GLP’s move follows the entry of another leading global player, the US-based Panattoni Development Corporation, into the UK market last September.

This was via a merger between its European division and Midlandsbased First Industrial.

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10 January. Gazeley has the option of revising its plans or appealing against the decision – it already has consent to build a 1.1 million ft2 warehouse from a separate application at Magna Park.

Other major consents have been granted to Goodman, which is building a 430,000ft2 unit at its 40-acre Leicester Commercial Park (below), and Prologis, which received planning consent for 887,000ft2 of space at Hams Hall near Birmingham – it also has plans to build 7.8 million ft2 of space at DIRFT in Daventry.

Despite these schemes, more

land is needed in major distribution locations, said Burbage Realty director John Burbage: “There seems to be insatiable demand for logistics space.”

Popular areas such as Northampton, Coventry, the southern M1 and the M25 would continue to have tight supply. “It would help if planning was to get swifter and less costly but there doesn’t seem any hope of that happening,” he added.

Kevin Mofid, head of industrial research at Savills, said although the new developments will add to land supply, it will be used up sooner than previous tranches because of the increasing size of warehouses.

“For example, at Magna Park in Lutterworth, which began development in 1988, the average size of a building is 180,000ft2 to 190,000ft2, whereas at the more recent Magna Park Milton Keynes, where John Lewis has several large buildings, the average size is 600,000ft2, he said.

Sheds and beds gets go-ahead A mixed industrial and residential development – claimed to be the first of its kind – that will provide 230,000ft2 of industrial space and 1,300 homes has been approved

by Hillingdon Council.

Segro and Barratt London will develop the different elements of the scheme, using a ‘sheds-andbeds’ approach, aimed at preventing former industrial sites being lost to purely residential uses. The site, a former Nestlé factory

(below) in Hayes, is less than a mile from junction 3 of the M4 and is seen as a base for regional distribution and as an urban logistics location for companies serving central London.

Segro business director for Greater London Alan Holland said: “It is the first time that an industrial property company has created a vision that will deliver industrial space alongside a highquality residential scheme.”

By Peter Ward

Infrastructure has to match changing needs of society The logistics industry needs the support of a government that understands the challenges the sector faces and is prepared to meet the changing needs of a growing population.

In his autumn statement last year, chancellor of the exchequer Philip Hammond announced plans to build 300,000 new homes a year by the mid-2020s. Development on this scale will bring challenges and opportunities to the logistics industry, but, it is clear that the needs of our sector must be considered from the outset if this strategy is to succeed.

The occupiers of the new homes will have to be fed and clothed and, with events like Black Friday and Cyber Monday continuing to stoke the nation’s love of online shopping, land must be allocated for the construction of logistics hubs if the residents of these extra estates want their internet orders to be delivered within 24 hours.

The logistics industry is ready to meet the changing needs of a growing population housed within our expanding towns and cities but needs the government to understand the challenges and be prepared to act accordingly.

The UKWA was therefore delighted by Hammond’s recent announcement that the National Infrastructure Commission (NIC) is to carry out an in-depth study on the future of freight in the UK. UKWA has already undertaken a lot of work to bring the lack of available development land and fit-forpurpose warehousing space to the government’s attention and we aim to support the NIC in every way possible.

To this end, we are hosting a summit in February, at which key industry stakeholders will come together to consider the challenges facing urban logistics and help to develop a coherent plan to present to the NIC. The Feeding Cities Summit will take place on 6 February at the British Museum, London and is a chance for industry players to contribute to shaping our future infrastructure.

I urge you to attend and have your say. n UKWA’s new free warehouse space brokerage portal, MarketSpace, unites those with warehouse space to fill with those seeking storage and logistics services. ukwamarketspace.com

Peter Ward is chief executive of the UK Warehousing Association. pward@ukwa.org.uk. ukwa.org.uk

MotorTransport 11

17/01/2018 09:51:37

Viewpoint

motortransport.co.uk

Retailer-collect model is not ideal B William Walker Founder, Walker Logistics

y using their own returning vehicles to collect products bound for their warehouses from their suppliers, are retailers really improving supply chain efficiency?

There is a trend for retailers to collect orders bound for their warehouses from suppliers, or their 3PL partners, using their own vehicles.

As a result, rather than picking and packing pallet loads of a client’s goods before dispatching them to a retailer’s DC, many logistics services businesses are picking and packing pallets and storing orders until they are picked up by a retailer.

The theory is that by using returning, empty delivery vehicles to collect products bound for their warehouses from their suppliers, retailers can cut the number of miles travelled and emissions produced while earning revenue.

Advocates of retailer-collect transport planning solutions claim other benefits. For example, by even partially filling returning vehicles, the retailer can offer competitive prices. And some retailers will offer to get the supplier’s products on the shelf more quickly if its own vehicles are used.

But some 3PLs see this as a potential disruption to a smooth-running operation and contend that the need to factor in more in-bound collection

slots adds a different level of administration.

From our experience, processing retailer-collect orders requires additional planning. And those retailers that impose heavy penalties on companies that miss their delivery slot do not always expect this to apply to their own vehicles when they fail to ‘book in’ at the allotted time.

Some are even reluctant to confirm a time.

This process may also put the 3PL company under pressure to process orders more quickly than is practical. For example, the 3PL may receive an order that requires an amount of kitting or rework on Monday and then be told the retailer’s vehicle will be collecting the order the next day.

Conversely, a 3PL may pick and pack a large, 30-pallet order for collection on a scheduled date, only to be told that the retailer will not be collecting it for another 10 days.

At Walkers we have expanded a dedicated area in the storage facility to accommodate stock awaiting collection from our clients’ retail stockists to maintain a smooth process.

The retailer-collect model is set to become more commonplace, so 3PLs need to work with clients and their retailer partners to ensure the process functions as efficiently as possible.

Learn from Carillion: get close to your client T Steve Hobson Editor Motor Transport

he disaster that is the collapse of Carillion will undoubtedly cause problems for all its subcontractors, including transport operators, still owed money by the failed company.

We just hope not too many firms were so far in hock to Carillion that they too go under as a result.

It would be uncharitable to such operators to say they should have seen it coming, but the model of a handful of prime contractors that – like the banks – wrongly believed they were too big for the government to allow them to fail has been unsound for years. These companies’ business models have been based on winning contracts with below-cost bids and then desperately trying to make them profitable by screwing their subcontractors. Retentions, 120-day payment terms and just a plain refusal to pay what they owe are all familiar tactics to suppliers.

This is not an argument for returning all public contracts to public ownership. Whatever the rights and wrongs of PFI, those of us who remember the Thatcherite days of compulsory

12 MotorTransport MTR_220118_012.indd 12

competitive tendering of local authority contracts know that some very inefficient public sector operations definitely benefited from the new broom of private sector competition. But the companies winning the refuse collection and street cleaning contracts in those days were real businesses with skills in running those operations, not empty shells with few assets other than armies of quantity surveyors exploiting the real businesses and people who actually do the work.

If there is a lesson to be learned from this mess it is one that successful transport firms have known for a long time: get close to the end client, never become over-reliant on one company – especially one known to have the business ethics of an alley cat – and don’t carry on working for someone if the last bill goes unpaid.

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 Aftermarket editor Roger Brown 2168 Vans editor George Barrow 2156 Urban editor Hayley Pink 2165 Senior legal reporter Ashleigh Wight 2167 Reporter Emma Shone 2164 Group production editor Clare Goldie 2174 Chief sub-editor Rufus Thompson 2143 Key account managers Andrew Smith 07771 885874 Richard Bennett 07889 823060 Display telesales Barnaby Goodman-Smith 2128 Group sales manager 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 22.1.18

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18/01/2018 12:02:48

Sector report: temperature-controlled

M

aking money in haulage is always hard, but some sectors are harder than others. One of the most notorious for narrow margins and fierce competition is temperature-controlled haulage and it’s not just the loads that can seem chilling.

Even the sector’s trade association, the Food Storage and Distribution Federation (FSDF), admits transporting chilled and frozen food can be a challenge.

Chris Sturman, the federation’s chief executive, says: “Many of our members tell me that margins are very, very slim. The key thing to increasing margins, it seems to me, is to use transport as an integral part of a larger offer.

Operating transport alone is very tough.”

The larger offering Sturman refers to includes services such as warehousing and relabelling, which logistics firms are increasingly coming to regard as part of an overall package.

Like others in the sector he also predicts further consolidation in the market, as some companies are either bought by rivals or drop out of chilled and frozen logistics altogether, which might help rates in the medium term.

“If capacity drops operators might become more choosy about what work they are prepared to take on,” says Sturman.

But although it is a challenge to boost profit margins in a competitive market it is clearly not impossible.

Major companies including Fowler Welch, Culina, NFT, Yearsley and Reed Boardall have all carved out solid shares of the market, while a number of smaller players have shown that while being big might help it is not a prerequisite for success (see panel on WMB). A positive thinker would take this as evidence that there are few areas of logistics the UK industry is not willing to take on.

A stable year

What has 2017 been like? Alistair Brown, commercial director at Culina, characterises it as a “stable” year, but in truth it has been a bit better than that for the chilled specialist.

For one thing, Culina has increased the number of its chilled customers from 108 a year ago to 120 today with new contracts, including milkshake brand Frijj and Sun Magic Juices, added to established customers such as Tropicana and Innocent. Just as important, says Brown, Culina didn’t lose a single chilled customer in 2017. For Brown, one of the biggest challenges of temperature-controlled distribution is, and will continue to be, the timescale of deliveries.

This is because the chilled specialism means that there are just 15 hours between receiving an order (typically at 6am) and delivering it to one of the big supermarkets’ RDCs.

Rising to the challenge In an already notoriously competitive sector changing demands mean temperature-controlled hauliers might have to consider expanding their offering to stay ahead of the market. David Harris reports 14 MotorTransport MTR_220118_014-015.indd 14

22.1.18

18/01/2018 11:44:57

motortransport.co.uk

There is also the tendency for shoppers to do their big weekly shop at the weekend, which means the busiest day for many food delivery hauliers is Wednesday, as stock is built up in time for the weekend rush.

If some demand is predictable then one of the features that keeps many hauliers on their toes is that much is not. Seasonal and meteorological factors can alter the need for chilled products overnight.

When the weather turns hot, for example, fruit juice “flies off the shelf” and needs to be quickly replenished.

Brown says one of the things that would help the temperature-controlled logistics business to operate as smoothly as possible would be better forecasting.

This might happen, but there are other changes that are more certain.

Big developments

For Nick Hay, chief executive of Fowler Welch, big developments in the wider industry are among the key features of the refrigerated logistics business.

He says: “The grocery retail market is undergoing a huge amount of change. There has been the demise of Palmer & Harvey, the acquisition of Nisa and the onward march of Aldi and Amazon.

“There are more ways for the consumer to get an ever-widening choice of produce and each of those has its implication for the supply chain.”

In addition, all companies are now dealing with the technical changes to financial reporting which mean that all lease liabilities need to be clear on balance sheets.

Hay says: “It’s difficult to get progress in profit while all the time finding that these changes and new legislation are adding to our costs.”

Whatever those changes might be in the wider industry, Hay agrees with the FSDF’s Sturman that what logistics specialists do for their customers is going to have to develop further.

“There is no doubt that we are going to have to do much more in future with things such as putting things in different-sized packaging and relabelling,” he says.

In the meantime, Fowler Welch’s performance remains solid, he says, mirroring that of many other big firms in the sector.

Figures released by Reed Boardall last year exemplify the stable but not spectacular performance around the industry.

The Yorkshire-based cold storage and transport business experienced a slight fall in turnover to £64.3m in the year to 31 March 2016, down from £65.9m the previous year. Pre-tax profit in the same period was slightly up at £3.4m against £3.2m in 2015.

In a changing market this was a good performance and Marcus Boardall, deputy chief executive, notes: “With consumers shopping more frequently at outlets with restricted storage space, our customers are demanding smaller and swifter deliveries. Our business model [enables] us to respond quickly with ‘order today, deliver tomorrow’.”

It is a pattern that will immediately be recognised by other operators in the chilled and frozen logistics business and one to which the industry as a whole will have to continue to adapt to in 2018. n

THE EFFECTS OF BREXIT Nobody seems very confident about predicting the potential effects of Brexit and the temperature-controlled haulage business is no exception.

One thing everybody does seem agreed on is that the industry will have to be less reliant on labour from eastern Europe.

Culina commercial director Alistair Brown says: “The wider industry is very dependent on eastern European labour.

One of the things we will be looking closely at over the next year is how that population makes up its mind over staying here or going home.”

Replacing those workers with Brits would be challenging, adds Brown,

22 .1.18

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because they are, generally, less willing to work in the sector than foreigners.

But even if there is an exodus of eastern European workers, it might not be all bad news, says FSDF chief executive Chris Sturman. His view is that the potential withdrawal of foreign trucks offering cheap rates will not necessarily be bad for UK hauliers.

“It might be that the process takes out a lot of the Romanian, Estonian, Latvian and Lithuanian trucks that loiter in our lay-bys at the weekend. They offer cheaper rates because they don’t abide by the minimum wage. A lessening of that effect could help rates rise for UK operators,” he says.

SMALLER SUCCESS It’s not all about size when it comes to making a name for yourself in the refrigerated haulage sector.

One smaller firm that has successfully entered the market in the past couple of years is WMB Logistics, the Gloucesterbased firm better known as a specialist in transporting motorbikes. Many of its trucks spend the summer carrying Harley-Davidson motorcycles – the first marque WMB transported – around Britain and Europe to shows and demonstrations.

Although there is some winter work for a motorcycle specialist, such as Motorcycle Live in November at the NEC, to which WMB took 260 motorcycles last year, it is mainly a summer affair.

To compensate, the firm looked elsewhere for supplementary year-round work. Temperature-controlled haulage turned out to be one of the answers and WMB now runs six reefer trailers, all capable of carrying frozen and chilled goods.

The move began with a request from food group Samworth Brothers, makers of Ginsters pasties and recent buyer of West Cornwall Pasty Co, to deliver products from its cold store in Tewkesbury to various Marks & Spencer DCs. Tony Davis, co-owner of WMB, says: “It went really well so we bought three fridge trailers and in winter 2015 they wanted us back.”

However, when the cold storage facility was moved to Scunthorpe the contract no longer made economic sense for WMB. What the company demonstrated then was the sort of adaptability any firm needs if it is to survive in the modern world. It started transporting bananas for Fyffes, carried out some work for Conway Bailey and now has a regular contract with a local abattoir.

The important thing, says Davis, is to get jobs on your own account at the right rate, to avoid being “busy fools”, working for turnover rather than profit.

He adds: “Sub-contracting is useful sometimes but the problem is that whoever gives you the sub-contract usually gets the lion’s share of the money.”

MotorTransport 15

17/01/2018 10:03:05

Interview: Alex Laffey

We can go anywhere

Eddie Stobart Logistics CEO Alex Laffey has big ambitions to grow the business in traditional transport and new areas such as e-commerce, as he tells Steve Hobson

A

lex Laffey spent 25 years with Tesco before becoming CEO of Eddie Stobart Logistics (ESL) in May 2015 as it prepared to float on the Alternative Investment Market (AIM) of the London Stock Exchange in April 2017. Just before the listing, William Stobart stood down as director and the flotation broke ESL’s link with the Stobart Group, which is listed on the main Stock Exchange. It also gave Isle of Man-based private equity firm Douglas Bay (DBAY) an exit route from the business.

“In 2014 Stobart Group sold down control of ESL to DBAY and I knew when I joined the business its horizon was three to five years,” says Laffey. “We set about putting the business in the best possible financial shape and being listed on AIM achieves that goal.”

Stobart Group, now an infrastructure, energy and aviation services business, had owned almost half of ESL. It realised £120m from the flotation while retaining 12.5% of ESL and ownership of two of its sites.

Images: Paul Burrows

Growth ambitions

The flotation raised £130m for ESL, which, according to the prospectus, will be “used primarily to reduce gearing, partially fund the acquisition of iForce Group and provide ESL with a financial platform to support its growth ambitions”.

Laffey declines to put a number on those growth ambitions but confirms he is looking to maintain double-digit annual increases in revenue. “What we have is working in the market place but if we don’t innovate, don’t deliver the service and aren’t competitive, we won’t grow,” he says.

“It is up to me to describe the value we can bring to organisations – and then deliver it.”

Since the flotation, the ESL share price has had a bumpy ride, and at the time of our interview in early December 2017 was 5p off the 160p flotation price at 155p.

Laffey is a down-to-earth Geordie who would rather spend his time running the company than in the City. But he is keenly aware of the importance of the share price, and our meeting is in a smart London restaurant ahead of a day of investor and broker briefings.

“I don’t spend all my time looking over my shoulder at the share price,” he says. “The focus is doing the right thing within the business. The share price will look after itself if we do that.”

Laffey is surprised the shares have not done better, bearing in mind the excellent set of half-year results for the six months to May 2017 with underlying revenue, excluding its discontinued Irish operation, up 13% to £286.8m and underlying pre-tax profit increasing 14% to £16.9m.

The company also put out a bullish trading update in July, saying operational efficiencies had seen modestly expanded profit margins and that “operations continue to trade well as 16 MotorTransport

MTR_220118_016-018.indd 16

we move into the second half of the financial year, and we look forward to delivering a full-year performance in line with market expectations”. The flotation helped fund three acquisitions – 100% of e-fulfilment specialist iForce; 50% of same-day courier Speedy Freight; and the remaining 50% of recruitment business The Logistics People – to expand ESL’s capabilities beyond its core trucks and sheds. Laffey says further acquisitions are on the cards.

“Our strategy is acquisitive and both iForce and Speedy Freight add to our capability,” he says. “iForce is a specialist operator in e-commerce, which is growing as bricks and mortar sales are cannibalised by online, while Speedy Freight’s sweet spot is urgent B2B same-day or next-day cargo. It tends to be one or two pallets and if it’s more than that they will pass it to Stobart.”

Acquisitions have to add something the company doesn’t already do for itself. “We run the most modern fleet in the UK and we use the best technology,” says Laffey. “Unless it was bringing some sort of specialism to ESL and giving us a skill that enhances our credibility, capability and scalability, then I don’t think bog-standard transport is where we want to be buying.” iForce provides e-fulfilment services including returns management for a wide range of retailers that include John Lewis, Maplin and Cath Kidston. It was in the vanguard of e-commerce, sending out John Lewis’s first online order in 2003, and operates from eight leased multi-user sites with 1.5 million ft2 of warehousing space. It is also in two customer DCs where it handles the e-commerce channel from mezzanine floors above the main store distribution operation. “iForce delivers e-com services for a diverse range of customers and handles everything from a jacket for John Lewis through to plants and furnishings,” says Laffey. “If you order a John Lewis jacket you may click on a John Lewis website but immediately behind that your order will start to be processed in an iForce DC. They select the carrier, inject it into the courier network and track it to your front door. If you don’t want the item, iForce will handle the reverse logistics back to the DC. If given the OK by the customer, it can then sell products online, but it never owns inventory.”

Middle-mile service

ESL does not make final-mile deliveries but the green and white trucks do carry out middle-mile services for several home delivery operators. iForce has no transport and Laffey is keen for the two companies to exploit the opportunities for crossselling. “We have had some success providing transport to iForce customers,” he says. “We are also working with a number of couriers to support them. ESL has 47,000 vehicle movements a week and we are networking them to reduce road miles. That gives us a competitive advantage, which ➜ 18 22.1.18

17/01/2018 10:30:59

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22.1.18

MTR_220118_016-018.indd 17

MotorTransport 17

17/01/2018 10:31:50

Interview: Alex Laffey we are pushing into the marketplace.”

Laffey says the iForce network is at capacity and will need to expand, including exploiting opportunities for the e-commerce business to share ESL sites. “Because of the operating models, putting iForce into an ESL DC is the right thing to do,” he says.

“They can operate on mezzanines so we can leverage the footprint much better than we do today, add real value to the customer and deliver real value to our shareholders.”

While Laffey has no intention of getting into the ultra-competitive B2C final-mile home delivery business, he does say “never say never”. “Maybe a white glove, high-end service – but we have no plans for that at the minute. The nearest we get to final mile is Speedy Freight and that is all B2B.” Speedy Freight is in 41 locations but does not own any vehicles, preferring to use local owner-drivers. ESL also operates an asset-light model, renting its 28 UK sites and leasing all its vehicles and equipment.

Despite confusion over the future of trading relations between the UK and the EU post-Brexit, Laffey wants to grow the Eddie Stobart brand on the continent. For his customers it is business as normal for the time being as everyone watches the negotiations between the UK and the EU. ESL sold its UK automotive transport operation because Laffey felt it was not an area the company could grow, but retained the European business. It also has a continental general cargo business working for UK as well as European customers – Laffey worked in several European markets while at Tesco.

“We are active there now, with 200 trucks operating across Europe,” he says. “It represents just less than 10% of our revenue and we want more of a presence in Europe, including some

motortransport.co.uk

DELIVERING SUSTAINABLE DISTRIBUTION Many of Eddie Stobart’s green and white trailers proudly state ‘Delivering Sustainable Distribution’ – a questionable claim bearing in mind it is being pulled by a non-recyclable tractor burning non-renewable fossil fuels at the rate of 10mpg.

While Laffey accepts diesel is not a truly sustainable fuel, he argues that modern trucks remain the most efficient means of delivering goods.

“Where is the viable alternative at the moment?” he asks. “Our fleet is 100% Euro-6 with the cleanest engines.

We continue to look for alternative fuels but all these technologies still have issues to iron out. Sustainable means we run the fewest miles to deliver, because of our network, on the cleanest vehicles.

“And we run trains from Daventry to all points southwest, south-east and north-west – not quite north-east yet because there isn’t the traffic, although we do go to Aberdeen via Glasgow. We have a rail terminal in Widnes and take containers in there by train from Felixstowe. We run our own trains and dedicated trains for the likes of Tesco, which we have done for approximately 10 years.”

As well as conventional boxes, ESL uses its own design of low-height containers on rail so its trains can divert around any hold-ups on main lines.

“Rail is still not that competitive with road,” says Laffey.

“We compare rail with double-deckers and we can just about make trains competitive. It is still relatively small and it needs a lot more work.”

warehousing footprint that we haven’t got. We can do that ourselves and will continue to balance acquisition and investing in the network. I’m aware of the challenges in Europe and we will always have local expertise on the ground.”

Full service offering

Laffey wants to offer more services to new and existing customers outside ESL’s traditional primary full trailer load trunking.

“I want to give customers a full service offering, not just transport,” he says. “That includes warehousing (dedicated and multi-user), container inbound, e-com etc. The job starts when we win the customer, and if we are not delivering our full proposition and looking for further value, the next time they come to re-tender it we will be climbing a hill.

“I want to build long-term, strategic relationships with customers, not short-term tactical ones. Good is helping them with services right across the supply chain so they see us as the go-to organisation. We have no right to that relationship – we have to earn it.”

Flexibility is also improved by the fact that hardly any of ESL’s trucks are in customer livery, meaning “we can go anywhere”, says Laffey.

“A truck with a retailer’s brand on it cannot go into another retailer’s premises,” he argues. “We have a universal currency because 98% of our trucks are in Eddie Stobart colours. Some of our bigger competitors are driving trucks that belong to retailers and are in their livery.”

Eight of ESL’s 28 sites are dedicated, rather than multi-user, but the haulier no longer runs any Tesco DCs. “We do some storage and operate transport for Tesco, but I believe Tesco runs most of its DCs now,” says Laffey. “I designed that network but I am no longer that close to it. It uses our transport because it only pay us when it needs us. Our network is how we manage that for it and many other customers.”

Since Laffey’s arrival, the proportion of ESL’s revenue coming from Tesco has fallen from 34% in 2014 to about 20% today as non-Tesco work has increased. “Every customer, large or small, is important and our relationship with Tesco is no different to any other. I always say a small customer is the next big customer,” he says.

“We have expanded other sectors of our business strongly and brought balance rather than losing work from Tesco. We are only as good as our last delivery and we work hard to deliver the service levels we have committed to, but also innovate beyond that.” ■ 18 MotorTransport MTR_220118_016-018.indd 18

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17/01/2018 10:32:27

Careers

motortransport.co.uk

Matthew Hanson joins Hermes team Hermes has added to its senior team with the appointment of head of marketing and product Matthew Hanson (pictured).

Hanson joins the business from Cox Automotive, and has also held the role of head of marketing products and planning at Manheim UK. Before that Hanson spent eight years with Asda as the head of advertising (print).

He said: “This is a fresh and exciting challenge working for a highly innovative company that operates within a fast-paced and constantly evolving sector. Backed by significant board investment, Hermes has enjoyed a period of sustained growth and I look forward to playing a vital role in the company's future success and helping to cement its position as the market leader.”

CEO of Hermes UK Martijn de Lange added: “Matthew’s vast experience and knowledge will be a fantastic asset to Hermes as we look to further grow our business and develop our portfolio of worldclass delivery services and solutions.

“I am sure he will hit the ground running, making a significant impact, and providing strategic direction that will support the business in its objectives.”

bought the operator out of administration in 2015.

Roberts said the acquisition “safeguarded the jobs of hundreds of employees”.

She added: “I’m really proud to have spent 15 years here with the company, working closely with many of the same members of staff, through all its change and playing a key role today in growing the business.

“The industry has seen many changes over the past 15 years including the growth of technology, pricing and competition, but with a strong and dedicated team and positive working ethos we continue to invest, learn and expand.”

Zac Brown, director of owned operations for Palletways UK, said: “Vanda is much valued by the Palletways team. She’s been a stabilising influence for the Edinburgh team during a period of major change that led to a complete overhaul of the business.

"Her progression from the bottom to the top, has been hugely beneficial. The business is doing well and going from strength to strength. That’s largely down to Vanda’s leadership – so long may it continue.”

Victoria Reynard to head up sales at Walkers Walkers Transport has appointed a new group sales manager to support recent growth in the business.

Victoria Reynard (pictured) has joined the business from Portakabin Hire in Leeds, and previously worked at TNT and UK Mail.

Reynard will be responsible for recruiting for Walker's expanding sales team and training employees, as well as working to win new customers while maintaining current relationships.

She said: “There is a real culture of empowerment and a huge desire to learn and grow throughout the entire business. It’s great to be in at the start of what is a significant growth initiative and the recent MBO just emphasises the ambition of the company. I’m really looking forward to having the chance to play a key role in developing the sales strategy to make sure that Walkers’ ambitious plans are realised.”

22.1.18

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By David Coombes

The real and present danger of reforming customs

Vanda Roberts hits 15 years at Palletways Edinburgh

The general manager of Palletways Edinburgh has celebrated 15 years with the business.

During that time Vanda Roberts (pictured) has overseen the transition from former haulage company Dalkeith to a Palletways business after the network

Staffing Matters

This isn’t going to be a passionate polemic. I’m quite certain that we’ve all heard enough about the rights or wrongs of Brexit. The motivations explaining how we all voted are numerous.

That’s not what I’m writing about now.

What really concerns me is that we’re only 14 months away from leaving the EU and there is so much yet to be done. The clock is ticking.

Some statistics: ■ 70% of EU trade enters the UK on a lorry.

■ An increase of two minutes in the average time it takes a lorry to clear customs at Dover will cause 17-mile tailbacks.

■ Rules of origin certificates to the EU will cost £48 after Brexit.

■ It’s not unusual for manufacturers to hold only an hour’s worth of parts.

■ The sector is losing more drivers than it is recruiting.

■ Donegal to Louth has more crossings than the line from the north of Europe to the south of Europe.

■ After Brexit, 132,000 businesses will have to make customs declarations for the first time.

We are 14 months away from the biggest change to our customs processes in any of our lifetimes. There is evidence to suggest that HMRC will have to process five times more customs declarations. HMRC CEO Jon Thompson says that it will take five to seven years to have a new streamlined process in place. HMRC bosses themselves think that they need £800M and 5,000 extra staff.

I don’t worry about the long term. But I look at the enormity of changing our customs system and see only 14 months. I’ve been involved in supply chain contract negotiations that have taken longer. Recruiting and training 5,000 skilled and competent people in 14 months feels like on the edge of what’s possible.

It’s time to stop the talk and instead walk the walk. In March 2019, we leave the EU. What are going to be the mechanics of importing from and exporting to the remaining member states? Please, DfT, give us some confidence that it’s all going to be OK.

Tel: 0117 9859 119 logisticsjobshop.co.uk admin@logistics jobshop.co.uk @LJSJobs MotorTransport 19

17/01/2018 10:43:14

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18/01/2018 10:24:48