The Road Transport Blog

Tesco DC closures and all that

2010-03-11T14:35:14Z

Talking to the press officer at the USDAW union last week regarding Tesco's plans to close its Middlewich DC, what quickly became apparent was that the union found itself in a strange position. Of course, in public anyway, USDAW was bound to get placard-shakingly angry about the closure - it's what trade unions are there for after all. However, we suspect that in private it is shrugging its donkey-jacket-clad shoulders and accepting it as just one of those things.]]> The problem is that Tesco is a massively growing business and its older DCs, which in some cases have been there for 20-odd years, are hopelessly out-of-step with the volumes that the retailer now needs them to handle. The union - probably all trade unions in fact - know this is the case and, I'm guessing, expect further closures as the years roll on.

In Tesco's defence, it points out that it will be creating more jobs than it's shedding this year (albeit that not all will be identical roles to those lost) and that it will look to redeploy affected workers where it can. To add to that it says that it is making environmental savings through the new DCs as they are cleaner and more efficient than those they replace.

It also says that, at the minute, there are no more closures planned. However it's pretty inconceiveable that there won't be further announcements at a later date, as the business will almost certainly dictate this. For instance, there must still be a big question mark hanging over its Weybridge, Surrey depot. Although Tesco has abandoned (well, there was an issue with the local council and then an apparent rift with the developer, but it's a long story) plans for a new DC at Andover, it would be strange if the business imperitive that pushed it to pursue Andover and look for Weybridge's closure in the first place had vanished into thin air, especially with Tesco still growing.

Of course, if you were of a cynical mind you might look a bit closer to London along the M3, where a new 1.3 million ft2 distribution centre is proposed at Pyestock in Hampshire. There's no end-user for the site yet, but given the current state of the property market, no-one builds these things speculatively... There's the small issue of a High Court challenge against the decision to grant planning permission for the depot to overcome first, but clearly, watch this space.

Bulmers Transport - a year on

2010-02-27T08:29:46Z

The fall-and-rise-again of Bulmers Logistics - reborn as Bulmers Transport - last year is pretty well documented. However, Johnathan Bulmer has stayed resolutely silent about how the new operation is performing, feeling, probably rightly, that speaking about it was only likely to inflame passions again.

That said, a quick chat at the Asda carrier awards last night (where the company was handed the Container Carrier of the Year title) gave some indication as to how the business is going.

]]> The long and short of it is that it's turned a profit in its first year - more or less. There will be some exceptional items carried over - notably £140,000-odd of redundancy payments relating to the administration - but it is now trading within its means.

Bulmer himself says he has "learned some important lessons" over the past 12 months which hopefully augers well for the future. Apparently it's even started back-loading containers where possible which sounds like a first to me.

Another hard lesson has been the valiue of a company when its in administration (lest we forget he paid a whole pound for Bulmers Logistics - with a bunch of other costs obviously). It has already looked at making on acquisition - trying to pick up the business and assets of N Irving in Morpeth when that went under but decided not to "as we couldn't keep the thing together". Now Bulmer says there is another acquisition being lined up which is "75% of the way there". Apparently it's outside of its Teesside heartland but didn't reveal any more details. Watch this space.

Asda Carrier Awards - results

2010-02-26T23:34:21Z

OK, so it's 11.30pm and I'm sat in the Novotel in Leeds drinking Ardbeg from a mug (for reasons best known to the hotel the room is not supplied with glasses). It is, dear reader, all glamour, albeit that the Ardbeg is its usual medicinal self.

Anyway, just back from Asda's carrier awards - essentially an import from US parent Walmart - where the distribution arm of the supermarket tries something different... no hang on... makes sure every little helps... er...oh...rewards and recognises the transport companies that work so hard for it.

So without further ado - here's the winners:

]]> All the following have the phrase "carrier of the year" somewhere in the title, feel free to put it where you like.

So, most improved (carrier of the etc etc): Freshlinc (an award presented terribly badly by yours truly);

Primary: NFT Distribution;

Domestic Irish Sea: McBurney Transport;

Primary Irish Sea: (The recently disaquired) Norfolkline.

UK Container: Bulmers Transport (yes, that one);

European: MacAndrews;

Small: John Lea Transport;

Environmental: Reed Boardall;

Most Outstanding Service: Essex Cargo/PD Ports/DHL Fuel;

Overall best-of-the-best: NFT Distribution (for the 2nd year in a row).

Whatever you might think of supermarkets and their power in the transport industry, this is a great initiative by Asda to reward its supplier hauliers. Oh and the night raised £10,000 for charity.

Interesting to see Bulmers Transport back in the fold. More on that tomorrow.

Driver wages to fall?

2010-02-26T15:43:26Z

I had an interesting interview this morning with Peter Brown, the managing director of Jack Richards & Son in Fakenham. As part of the conversation he mentioned that the company was currently inundated with job applications from drivers - around 10 per day in fact - and most were, he said "from cracking guys who really want to work".

Now bearing in mind this over-supply in the market - caused by both licence holders coming back to the industry and redundancies through company failures and the recession - I asked whether there was now downward pressure on wages?

]]> In response Brown said: "There's undoubtedly a downward pressure. The issue for hauliers is that other costs are going up so wages is one area where you have to show restraint. It's pretty common across the industry that wages are frozen and I just don't think that's going to change this year."

This isn't to single out Jack Richards or Brown for making the comments, as I expect that the vast majority of hauliers are in the same boat. Most have come through 2009 intact but are now faced with rising costs - particularly new truck prices and fuel - and rates that are under pressure which means that driver wage increases are on the back burner,

There will be some variations across the industry of course, but I can't imagine that there will be mny rises in 2010.

Anyone out there in a similar situation?

And as a postscript I bumped into a driver from car transport firm ECM last night,. Although the firm had been busy thanks to low VAT and the scrappage scheme he wasn't terribly optimistic about the next six months for that particular sector either. More lay-offs this year?

What has the Transport Secretary ever done for you?

2010-02-23T12:08:19Z

As the election looms there is every chance of a change in Transport Minster (again) this summer. To mark this somewhat inauspicious occasion we look back at the past five transport state secretary's -which only takes us back to 2002- and ask: What did they do for you?

1) Lord (Andrew) Adonis - the current holder of the role took office on 5 June 2009 after his predecessor Geoff Hoon resigned. Lest we forget Lord Adonis is not actually an elected MP - he became the Baron of Camden Town in 2005 before being moved into the House of Lords.

Biggest achievement: Backing the Freight Transport Association's (FTA) Logistics Carbon-Reduction Scheme (LCRS)

Biggest flop: Because Adonis sits in the House of Lords, he is unable to make speeches or answer questions in the House of Commons, restricting his influence and accountability.

]]> 2) Geoff Hoon - 3 October 2008 to 5 June 2009. In eerily similar circumstances to his departure Hoon became Secretary of State for Transport in 2008 after his predecessor Ruth Kelly resigned suddenly. Hoon is perhaps more famous for being defence minister during the Iraq War.

Biggest achievement: Meeting with Stobart Group boss Andrew Tinkler to discuss a tax on empty running

Biggest flop: Spending fewer days in the role than Ruth Kelly

3) Ruth Kelly - 28 June 2007 to 3 October 2008 . Former Bolton MP and die-hard Blair-ite Kelly stepped down from the post to spend more time with her family.

Biggest achievement: Floating an idea for priority lanes for trucks and buses

Biggest flop: Admitting she would need "a lot of persuading" to allow LHV's onto UK roads

4) Douglas Alexander - 5 May 2006 to 27 June 2007. Yes, we had to look him up too: he is the current Secretary of State for International Development.

Biggest achievement: Losing the battle to introduce road user charging

Biggest flop: Losing the battle to introduce road user charging

5) Alistair Darling - 29 May 2002 to 5 May 2006. Darling probably now has more influence over the road transport industry as chancellor than he ever did as transport minister - particularly with successive fuel duty rises.

Biggest achievement: Being the longest serving transport minister since John Prescott

Biggest flop: His four years make up a large chunk of what was described as ten years of transport policy failure by the Labour Party, according to a joint study between Glasgow and Plymouth University.

Interactive tables added to MT Top 100 page

2010-02-22T15:06:56Z

There's now another way to browse the latest Motor Transport Top 100 data: by using our new interactive tables.

Click on the tabs at the top to swap between individual tables; then click on any column header to sort the table data from highest to lowest (or click again to sort from lowest to highest).

Of course, you can still view the data in PDF form using the viewer at the bottom of the page.

MT Top 100 2009: Interactive tables and PDF viewer

Eddie Stobart and Tesco: a conspiracy theory

2010-02-19T11:52:19Z

Following the news this week that yet more of Tesco's distribution operation is heading Eddie Stobart's way it's prompted a reawakening of a rumour that's been doing the rounds for about a year or so, namely that Stobart Group (Eddie Stobart's parent) is actually part-owned by Tesco, hence the migration of large chunks of work to it.

]]> It's certainly an interesting one that we keep hearing time and again. On the face of it, it would explain - sort of - why so much of Tesco's work is being given to Stobart. We say sort of explain because when you stop and think about it for any length it makes less and less sense. Why would Tesco, who are many things but not stupid, pump money back into a transport operation that has been successfully outsourced for any number of years? Nope can't see it either.

The driving factor behind the switch to Stobart would appear to be cost - and in the case of some Tesco-run DCs or transport operations (Middlewich for example) - the desire to rid itself of expensive unionised labour.

Also, to look at Stobart Group's shareholders, the top five are all investment companies: Invesco with 26%; Artemis with 11%; Aviva 6%; Legal & General 4%l; and Moore Capital with 1%. So if Tesco does have a stake, and it could of course, then it's a piddling sub-1% tranche. Hardly the sort of investment that would either give it a massive say, offer substantial financial support, or, dare we say it, offer much in the way of return.

While the jury is still out on this rumour, it's one we are treating with a healthy level of scepticism.

Costing the Earth: Keep on Trucking

2010-02-09T16:56:30Z

Earlier today Road Transport Blog asked if anyone listened last night to the Radio 4 broadcast Costing the Earth: Keep on Trucking which posed the question - could there be a way to cut down emissions from freight transport?

Well here is a potted summary...

It makes a change to hear an intelligent documentary on road transport broadcast by the BBC with some of the voices of the industry making salient points as to how road transport delivers for the UK economy. You cannot argue with the closing statement by present Tom Heap that the UK has lorries because as an economy and society we are addicted to the convenience they deliver.

First up is William Stobart - a predictable voice for road transport but one with no less gravitas. He tells Heaps that rail freight accounts for 4% of the goods it moves and he believe that the company can get that up to 10 or 15%.

Furthermore he believes the future is in longer vehicles, no suprise there then, and that empty vehicles should have to pay tax for doing so.

We move on to the Road Haulage Association's Geoff Dunning...

]]> ... who mounts a sturdy defense of the industry's green credentials. He says that with fuel being so expensive (the tax alone is 30p per mile) that hauliers are used to running as efficiently as possible. He believes the industry has taken its role in the carbon debate "very seriously".

Up next, to make road transport blood boil, is Freight by Rail - who argues that there is "not actually a level playing field between the sustainable modes and road transport" and then goes on to call for more rail freight subsidies. Best to move on...

The under-secretary of state for transport, Paul Clark, then says the government absolutley wants to see more freight going on low carbon alternatives: "It is not about 'road is bad'" he stresses, "but having alternatives that are there in terms of the big issues; reducing the carbon footprint and getting congestion off the road."

The rest is devoted to an advert for return loads service shiply.com. Presenter Heap is astounded that return loads services exist - despite the fact there are hundreds and have been running for years. Never mind.

We would love to know your thoughts on the content - please share them here.

Ill-advised comparison 101

2010-02-09T16:20:25Z

Just had a press release from PD Ports talking about its container ship feeder service from Felixstowe to Teesport and how it's saving Asda millions of lorry miles each year because of it.

However we were tickled that it made an interesting comparison within it about the amount of CO2 it's cut.

The release adds: "By utilising the Logical Link service, ASDA, which opened the first portcentric import centre at Teesport in 2006, has considerably reduced the volume of ASDA trucks on the already over-burdened UK road network. This has led to a marked reduction in its overall supply chain costs and a significant cut in CO2 emissions of some 2,200 tonnes. This is the equivalent volume of CO2 generated by 284 passengers on a return flight from Newcastle to Sydney, Australia."

According to my big book of Australia (or Google maps) -
View Larger Map'>Newcastle and Sydney are but 159km apart and you could drive between them in two hours and 15 minutes... Perhaps they meant Newcastle-upon-Tyne?

Costing the earth: Radio 4

2010-02-09T16:12:54Z

Has anyone actually listened to this?
http://www.bbc.co.uk/iplayer/episode/b00qhl63/Costing_the_Earth_Keep_on_Trucking/

Grateful for any comments.

Banking on help for haulage? Don't count on it.

2010-02-09T14:24:34Z

There was an interesting report published this week by the Committee of Public Accounts whcih said that nationalised banks - you know, the ones that we as taxpayers own - aren't lending enough to businesses or homeowners.

They had pledged to lend a total of £39bn by the end of February 2010 and will almost certainly fall short of this target.

]]> For haulage firms struggling with the recession - both in terms of cash flow and servicing any debts - support from the banks is vital.

We can't imagine that haulage is a particularly attractive sector for the finance industry at the moment. With profit margins inevitably dented by the downturn (and let's face it, they were never that great to begin with) there won't be a rush to lend to what's percieved as a 'risky' sector.

That said support is vital - just ask Gunns Transport which had the rug pulled from under it by Lloyds TSB. Perhaps the company was unsaveable? But without bank support it became impossible (and it was the bank that chose to lend to fund the MBO in the first place).

That's not to say that we want unqualified support - it was the indiscriminate lending to companies that could ill-afford it that got us into this mess in the first place (Innovate Logistics as a for instance).

But the pendulum has swung too far the other way right now - there will be plenty of perfectly decent haulage companies that go to the wall simply through lack of bank support.

Wanted: your road transport photos

2010-02-05T09:43:24Z

On the Roadtansport.com homepage, you may notice a new feature called 'Transport Photos'. This is simply a scrolling gallery showing the best pictures from the world of road transport.

If you would like your photos to feature on the homepage, please email them to yourpics@roadtransport.com

They will also be uploaded to the new Roadtransport.com album on Picasa, where other users can enjoy them and comment on them.

You never know - send us some great snaps and they could appear in the pages of your favourite transport publication...

Extra data added to MT Top 100

2010-02-03T14:46:56Z

We have now added two more tables to our Motor Transport Top 100 rankings for 2009 - namely 'sales per employee' and profit per employee'.

These tables are exclusive to Roadtransport.com - they did not appear in print in Motor Transport. However you can download them as a PDF (along with the rest of the Top 100 data) by visiting:

Motor Transport Top 100: 2009

A 'hole' lot of misery for the UK

2010-01-26T11:23:09Z

Is your suspension taking a hammering? Are you bouncing up and down in the cab? The weather has certainly taken its toll on Britain's roads and it is in a 'hole' lot of trouble (some might say it's all gone to pot - Ed). We want your pictures of the worst potholes in Britain, so get emailing to yourpics@roadtransport.com

The deeper they are, or the more inconveniently located, the better.

The best shots will appear on www.roadtransport.com

Motor Transport Top 100 now available

2010-01-20T12:48:55Z

This is just a quick post to say that the Motor Transport Top 100 for 2009 is now available to view and download on Roadtransport.com.

The Top 100 ranks the top companies in road transport by turnover, return on sales, growth in turnover, and growth in profit.

You can use our built-in PDF viewer to search for a particular company or keyword, and it's easy to zoom in and out of the tables. We're also looking at ways to make the data in the Top 100 even more interactive: I'll have some more news on that in the next week.

Motor Transport Top 100 2009