PURSUIT OF EXCELLENCE
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Frigoscandia operates from five depots around Britain, uses hand-picked owner-drivers who have passed rigorous ability tests to meet the high standards demanded, and has an extensive computer system. Wih these strengths, it is optimistic about 1992.
• Frigoscandia Transport's UK managing director Neil Kirk believes the Government must change its policy on the European Monetary System and artic legislation if the refrigerated haulage industry is to compete effectively in the post-1992 Single European Market (SEM).
Kirk reached this conclusion after "finding out what 1992 was all about" by means of a company study of the SEM because of its strong commercial interest in EEC developments — around 25% of Frigoscandia Transport's business is in mainland Europe. With an annual turnover of 210 million, the company feels it has a lot to lose if it cannot get an adequate footing on the SEM ladder.
Five weeks were spent collating facts and figures relevant to 1992, then Kirk travelled around European transport firms gathering opinions and forecasts. Although what he heard was not always encouraging, Kirk says it was a worthwhile project which highlighted two important areas.
DRAWBARS
The first of these is legislation on artic weights and dimensions. Kirk says that German road transport is dependant on drawbar combinations, while in the UK artics are predominant. Of course an 18m drawbar's payload is generally limited by its weight, while the payload of an artic is usually limited by load space. Kirk believes that if the weight limit for both drawbars and artics is increased to 40 tonnes, with attics still restricted to 1,5.5m, drawbars will gain such a massive ,.t.st advantage that artics will no longer be t.,:onomically viable.
"If .his happens," says Kirk, "it's game, set and -natch to everyone who has invested in drawbars — and tough luck on those who have invested in attics."
To give attics any chance of competing with drawbars in this situation, Kirk says the maximum artic length must be raised to 16.5m with a blanket 40-tonne limit. This would put both vehicles at level pegging with only a slight difference in cost, says Kirk. "Then everyone could compete. Nobody would get caught with an Investment in uneconomic refrigerated trucks," but he warns against assuming that this will happen: "Although our policy towards 1992 has yet to be hammered out at head office (Frigoscandia Group), if things did not go our way we would have to move into drawbars. We have around 23.5 million currently invested in our fleet so it could not be done overnight."
The other area that Kirk sees as critical to haulage in the SEM is Britain's economic policy and the European Monetary System.
"This system is designed to stabilise a country's currency, but it is not in use in the UK," says Kirk. "The system will only give our major competitors in 1992 a stability of currency whereas we in Britain may have to suffer giant swings in sterling, which have been as much as 40% in the past.
He poses three questions: 3 With such swings, can British transport services be strong enough to defend their market share despite the swings? o Do British food manufacturers and services be strong enough to defend their market share despite the swings? 0 Do British food manufacturers and transport operators have profit margins capable of absorbing 40% swings?
0 Can we expect multi-nationals to expand their manufacturing capacities in the UK where currency fluctuations can greatly increase production costs?
Kirk reckons that a fluctuating currency might well give British refrigerated hauliers a windfall market with the opportunity of short-term investments—but it would not be a suitable for long-term investment.
HAULAGE RACE
He believes it is a problem of when, rather than if, the Government will enter the European Monetary System, but still urges hauliers to make their fears known to MPs: "The longer it takes for the Government to enter the European Monetary System, the more difficult it is going to be to win the European refrigerated haulage race," warns Kirk. In the run up to 1992 Frigoscandia Transport is working in close co-operation with the industry's trade association, Transfrigoroute — Frigoscandia's operations manager, Barrie Shrosbree, is the organisation's treasurer.
He says: "We prefer Transfrigoroute to other trade associatons because it has good access to the ministerial ear and seems to get things done. If there is a problem in the refrigerated transport industry, Transfrigoroute can track it down and pinpoint what need there is for action. It also promotes better standards in this industry and helps customers become aware of the service excellence that they should demand, and that many of its members provide."
The pursuit of excellence is something which Frigoscandia Transport stresses in all areas, especially in its driver recruitment. The company mainly employs owner-drivers, with only five permanent drivers on its books. The owner-drivers supply their own tractive units and Frigoscandia supplies the refrigerated semitrailers (mostly Gray and Adams-built trailers with Thermoking units).
The owner-drivers, who work solely for Frigoscandia, have to prove their ability in three areas: firstly, they must prove their work rate and reliability. Secondly, they must show a good attitude to customers, because "they are the face of Frigoscandia which our customers see," says Kirk. Finally, the drivers must demonstrate financial and administration knowledge.
RIGHT CALIBRE
The company says it never has a shortage of drivers applying for jobs, but it often has to wait to find the right calibre.
Drivers taken on by Frigoscandia have to complete a three-to-six-month probation period. They are then expected to paint their tractive units to match the Frigoscandia-liveried semi-trailers.
The drivers operate from depots at Bristol, Glasgow, Liverpool, London and South Kirkby: each is served by a cold store and 24-hour security.
Frigoscandia buys fuel in bulk and supplies it to the operators at cost price. Insurance is also arranged at discount, and the company can arrange contract hire for tractor units for drivers without their own trucks. "One of our biggest strengths is our drivers," says Kirk. "They are businessmen who drive trucks. We do not encourage them to be wage slaves — we like them to make their own decisions."
Another of Frigoscandia Transport's strengths is its extensive computer system, says Kirk. It has 31 computer terminals linking the five transport offices with the company's head office in Hoddesdon, Hertfordshire. All staff are trained to use the computers and Kirk proudly reports that of the 33 staff employed in Frigoscandia Transport, excluding drivers, 31 are computer literate.
A 2100,000 system has been installed in the company's headquarters to pinpoint the traffic trouble spots in the UK. When it goes into operation, drivers will be contacted via their cab phones and warned to avoid the congested areas. Kirk says: "Traffic has not affected our business so far but I like to be ahead of problems".
Around 85% of the -drivers now have in-cab phones and Kirk says this has also helped to improve customer relations: "If there is a problem along the way a driver can warn the customer that he is going to be late, then they don't mind so much. If a customer doesn't know why a delivery is late it just creates a bad atmosphere. We at Frigoscandia Transport have never lost a customer."
Despite Kirk's predictions for 1992, Frigoscandia Transport feels there is a lot to be optimistic about, as the refrigerated haulage business is currently enjoying an encouraging rate of growth.
More than 60% of his company's business is in the frozen sector of the market, but Kirk sees particular potential in the chilled and fresh food sectors.
"We estimate the frozen sector of the industry is increasing at a rate of 2% to 4% whereas the chilled and fresh foodstuffs are growing at 6% to 10%," he explains. "When you look at the whole of the European refrigerated transport business, all countries, apart from Scandanavia and Italy (which are static), are undergoing a boom."
Frigoscandia attributes this growth to the general economic condition of Europe and a rise in eating standards. "The increasing pressure of time for people has meant a boom in ready meals," says Kirk.
The company says it is number three in its market, serving most British food manufacturer& Its main competitors are Christian Salvesen and Wincanton Chilled Distribution — and they never underestimate smaller companies like Hargreaves.
Frigoscandia pulled out of distributing tq retail outlets in 1985 to concentrate on transporting foodstuffs for food manufacturers, exporters and importers to distribution centres. The retail distribution market "did not have as much potential" says Kirk, and since concentrating on transporting for manufacturers he says the company's fortunes have gone up and up.
In 1983, Frigoscandia Transport had 58 trucks and an annual turnover of £.4 million. Today it has a fleet of 140, an annual turnover of 210 million, a growth rate of 20% — and a cautiously optimistic view of the European market.
0 by Tanya Cordrey