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subbies are on the 'trim list'
Page 8
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• by Dominic Perry Subcontractors working for Wincanton could be facing hard times ahead as the logistics giant attempts to trim its £50m per year haulage bill.
The news came as Wincanton announced a 12% rise in profits to 1,33.3m, including three month's revenue from the recent acquisition of P&O Trans European. Turnover at its existing operation rose by 8.9%, but including the P&O business it rocketed by 33.9%.
Chief executive Paul Bateman admitted that the firm was currently undertaking a company-wide study to determine how it can save money on its third-party haulage costs. He says that this will either involve a reduction in work for subbies or a reappraisal of rates—the company has already conducted similar cost-cutting at its German operation.
"Part of the study is to revise how we agree rates with subcontractors; it doesn't take toe much intelligence to realise that if you do it on a national rather than regional basis, then you'll get a better rate.
"However, far more important is looking at increased use of backloadIng and reducing overlapping routes—general operational efficiency."
Bateman says that although the conclusions of the study are not yet known, It Is almost certain that subcontractors will be receiving less work when Its findings are Implemented.
He adds that the Integration of the Trans European business has progressed well, and it envisages an annual cost saving of over 12m. Additionally It has returned its German division to break even, and is confident for the future: "We believe there are opportunities to build the business on both a pan-European and UK level."
The company's shares were trading at 192p as CM went to press (Tuesday).
U dominic.perry@rbi.co.uk