Refrigerated vehicle hire specialist Cool it! is the expert everyone
Page 44
Page 45
If you've noticed an error in this article please click here to report it so we can fix it.
from high street retailers to van manufacturers seems to go to for advice on keeping cool... PROFILE:
Company: LAC Vehicle Management (trading under the brand name "Cool it!"). Specialisation: Temperaturecontrolled vehicles.
• Short-term spot hire;
• Long-term contract hire and fleet management. Headquarters: Preston, Lancs. Founded: LAC established 1977; the Cool it! concept was established in1995.
Chief executive: Chris Warburton.
Total workforce: 27.
Fleet facts:
• 350 vehicles from a variety of chassis manufacturers, of which, 250 are temperature-controlled; • 150 additional vehicles in build; • 85% are refrgerated;
• Nothing over 23 tonnes. Business credentials: Used by retailers such as M&S and Budgen, and logistics companies such as Exel Logistics and Wincanton. Company ambition: 2,000strong fleet within three years. Most unusual request: A van for cooling down tyres. t few people want to own temperature-controlled vehicles, there are plenty around who want to hire them for longer and longer periods. "in the old clays business in January was dead and you got 75% of the fleet back," says Cool it! chief executive Chris Warburton. "In January this year we had 91% utilisation. The vehicles are going out and not corning back."
With few temperaturecontrolled specialist rental companies around and a fleet of around 250, he can claim Cool it! is the UK's leading operator in its class. Warburton's ambition is to dominate that sector: "We have financial backing in place to take this company to 2,000 vehicles in three years," he says. "That is not an idle boast."
The evidence for growth is in the order books. The company is already on course to double the present fleet with 150 vehicles in build. An additional site has been identified in the south of England to cope with expansion plans; the company is due to move towards the end of the year.
About Go of the new vehicles will go straight into long-term contracts for high-profile names such as M&S and Russell Hume, the catering butcher with a royal seal of approval.
Cool itl's expansion has certainly been helped by rising demand for temperaturecontrolled transport. But Warburton believes that the additional services the company provides have also been a significant factor: "We are not an out-and-out rental service," he explains. "We act as a facilitator for companies that need to operate temperaturecontrolled vehicles.
"For example," he adds, "there is a supermarket out there wanting to acquire 500 fridge vans. It had contacted us in the recent past, before going to a logistics company. The logistics operator subsequently contacted Cool it! The supermarket then approached a vehicle manufacturer, which also subsequently contacted us. Increasingly, we are the common link in the supply chain for refrigerated vehicles. That's because we have a reputation not just for providing hire vehicles, but also for designing and building specific vehicles to suit particular applications."
Most vehicle rental companies have been through the painful experience of getting things wrong to acquire the necessary experience to get things right. And if operating in the rental market itself can be a risky business, specialising in temperaturecontrolled vehicles can be even riskier. So do the rewards for getting things right justify that risk?
"From the supplier point of view—if you can control the costs—the marginal revenue stream you receive is far in excess of the marginal cost of owning the refrigerated vehicles, and significantly higher than that for traditional van rental," says Warburton. "However, it has taken us five years to get to the position where we know how we can control those costs."
Control is achieved in a number of ways. For example, a headquarters in the north of England has reduced overheads. Vehicle maintenance is largely contracted out to TNT's network of workshops; costs are also reduced by working dosely with vehicle manufacturers which are keen to extend their customer base.
Fridge van
"The vehicle manufacturers approach us and say we would like to get a vehide into such and such a company, would you work with us on the specification of a vehicle?'" he says. "For example, if you are the transport division of a large supermarket and you require a fridge van, you might call the manufacturer for a demonstrator but it is unlikely to have one. You might telephone the dealer, but the dealer won't have one either. Rather than keep a vehicle that they have no idea how to run, the manufacturers approach us. We run vehicles in our fleet on their behalf. These can later go into other companies as demonstrators."
A few years ago about 2% of vehicles had some form of temperature control. Warburton predicts that by the end of next year that figure could be closer to ro%. He believes there are several reasons for this increase.
Health and hygiene legislation has been tightened in recent years and this process is bound to continue. Changes in consumer demand have created new markets, such as home deliverieshome-shopping services via the internet will certainly increase this demand. Businesses are also developing new ways to approach their work.
"Who can tell where the temperature-controlled market is going?" asks Warburton. "For example, some drug companies supply vaccines to pharmacies in separate parts. Pharmacists make them up, but it is a very inefficient way of doing it. If the companies want to complete the packages themselves, they will require some form of refrigeration."
"Opportunities will also continue to arise from unexpected sources," he adds. "For example, last year an insurance company had three buses travelling around the country full of reps selling new products. Each bus was trailed by a Cool it! fridge van that was supplying the food for the mobile catering units. Cool it! was even asked to supply a fridge van to a tyre manufacturer so that tyres at the test track could be cooled down!
"The drive for efficiency and greater market share means that companies will continue coming up with better ways of achieving their aims," says Warburton. "It will mean a need for temperature. controlled vehicles that so far have never even been considered." He plans to be running the business that provides those vehicles.
In an industry as competitive as haulage demand inevitably generates supply, so how does he see the future? "Few specialists in the market now will be capable of supplying the growth in the market in the way that we will," says Warburton. "We will also be a couple of years ahead of any other company that decides to come into the market meanwhile."
A COOL OPERATOR
When Exel Logistics Retail Services began operating a pilot home delivery service for retailer Marks & Spencer, it expected there would be seasonal peaks.
It also appreciated that it would require some strong, short-term commitment from a fleet rental operator.
After providing initial support during the Christmas period, it soon became clear to Exel's operations manager John Couch that Cool it! could help to develop the business, because it was not just a hire company. "It doesn't just say 'here's the vehicle, where's my £200 a week, thanks very much'," he says. "It is also very prominent in the design of refrigerated vehicles. It kept in touch with us about how the business was changing, what designs would best suit the business—and our requirements have changed. People shop for food at M&S, but they also see a jumper, a pair of trousers and a lamp while they are in there. There's nothing more disappointing than reaching the checkout only to be told 'yes we can take your food and wine home for you, but we can't take the rest of it'.
"Cool it! conceived an innovative chassis-cab design that takes account of the need to carry chilled and other consumer goods on the vehicle at the same time," he says. M&S has since increased its refrigerated vehicle requirements still further by introducing a new service for businesses called Lunch Direct.