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T he building CM enters is within spitting distance of Coventry

20th September 2007
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Page 58, 20th September 2007 — T he building CM enters is within spitting distance of Coventry
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Airport, and it looks as though it could accommodate several large aeroplanes itself. But this is no hangar. It is Parcelforce's national hub, announces Gary Simpson, director of international and UK network operations.

This warehouse is the size of four football pitches. It was purpose-built in 1999; the adjacent international hub is the size of two football pitches.

Parcelforce, which is part of the Royal Mail group, fields 2,500 vans and 7.5-tonners. It has a large vehicle pool, but with a lack of heavy trucks.The reason for this, explains Simpson, is simple. Parcelforce concentrates on local drops, while the Royal Mail's fleet looks after the long-distance trunking side of things.

Peak times at this site are 6am-2pm and 6pm-3am. December is the busiest time of year,with 270 staff working within the depot during the most frantic spells.The summer months are relatively quiet, although at peak times some 200 personnel come and go across the vast floor space.

Divided market

Parcelforce's customers are split 50:50 business and consumer.The internet has changed the way many people communicate, especially socially, although the business world is still characterised by the transaction of formal documents, parcels, etc."The business-to-business market is growing by 0.5-1% a year." Simpson reports. Internet shopping is also expanding rapidly.

Pareelforce is the sixth-biggest parcels carrier in Britain, though recent times have been rocky. Six years ago, the firm made a loss of £200m on a turnover of £600m; cost bases were too high, Simpson says, and customers were demanding ever-cheaper parcels services.

To counter the losses, the company put a rationalisation plan in place — known as the Apollo programme.The workforce, once 11,000-strong, was cut to the current level of 5,000. Half the depots were closed, and some regional sorting centres were shut. "After this four-year plan we returned to profitability," he says. In the year 2005-6. Parcelforce's profits stood at £6m.

It was a difficult feat to pull off, but there

were no doubts:We were sure we were going to do it," says Simpson.

Watching the facility's internal comings and goings from a balcony, we notice that the parcels rest on trays attached to the conveyor belts rather than sit directly on the belts themselves, Scanners identify the parcel labels and then, as if by magic, the trays tilt, releasing the parcels onto other colour-coded belts.

There are 48 LGV bays for incoming traffic, but 100 outgoing bays. Booms, linked to the belts,feed the bays. Simpson says this disproportionate bay make-up is due to the fact that some areas, such as London North West, are so large that they generate four or five booms' worth of parcels.

CM watches Ian Dewey, control room

manager, as he oversees the operation. With 011" computer systems displaying the progress of Quentin Abel, 00 the conveyor belts, the scene resembles the managing director nucleus of a busy railway system. For the most of APC Overnight part the system looks after itself, Simpson says, although it needs human hands.

"Everything works automatically, unless it doesn't," he quips At the touch of a button, Dewey can tilt a cradle and place a parcel on to another belt. It's only lunchtime, but 25.884 parcels have already been handled. If the scanners cannot recognise a particular barcode, the parcel ends up in what is known as the -lobster", a manned facility that allows them to be correctly directed.

The range of consignments is mindboggling. Outsized or awkwardly shaped objects stand on the floor. There is a child's toy car and a wheelbarrow. Simpson confirms that kitchen sinks do appear from time to time.

Dean Harris, transport shift manager, • LGVs come and go at and transport manager Nigel Brownson Partelforce's national hub explain that 132 drivers are employed at this site, backed up by 30 to 40 agency drivers. The light fleet runs as far south as Exeter and as far north as Carlisle. Servicing and maintenance are carried out in-house by 18 full-time technicians. As well as the main transport fleet there is a pool of 24 shunters at the Coventry hub.

Nocturnal operation There is some activity to be seen when we visit, although, of course, this is primarily a nocturnal operation-90% of the work is done at night.

The headquarters of APC Overnight, similarly,is quiet during a daytime visit. But, this Essington,West Midlands-based firm differs from Parcelforce, most notably due to its structure.

Managing director Quentin Abel explains. APC has 37 shareholders, each an independent road transport firm in its own right. Many were shareholders from the outset, and put £1,000 into the company when it began life in 1994.

The rest of the members, he says, are agents. They have no shares in the firm and don't attend the AGMs. With the shareholders and the agents combined, though,Abel's reach extends across Britain.All told,128 depots make up the APC network.

Essington serves as APC's national sorting hub. In addition, the firm has an RDC in Bellshill, North Lanarkshire;Abel confirms that the company is looking to open another depot in south-east England. APC turns over 145m.

With multi-party operations like these, its important to understand exactly how the system works. At the start,APC members pick up parcels from their respective areas. Lads are then trunked into the Essington hub.The trailers but not the tractors belong to Abel. After sorting, parcels are redistributed back to the fellow members,then dropped to the customer.

Some loads, though, are not destined to travel long distances, and so they remain in a given agent's district and do not go near the hub.

Speaking of the wider sector,Abel says: -The same-day sector is not growing, but the overnight market is. It's hugely competitive, there's no two ways about that."

The reason why competition is so strong, he says, is down to the sheer number of firms vying for position in the overnight sector.

Large firms have bought smaller overnight outfits. Abel says the parent firms have had the finances to allow for "external financing" -injecting cash into the subsidiaries, which has made the smaller companies stronger.

APC,by comparison, has grown under its own steam. He says:"We've grown through our own efforts and reinvested in the business.This has had dividends, literally and metaphorically."

In the week we visit, Abel reports that the firm achieved a 99.8% success rate, which means that just 0.2% of parcels were delivered late.

This is not had going, but we wonder exactly what it means for the bottom line.-We aim for [a profit margin of] 3.5%. wh ich we achieved last year," he reports.

-11tere's not a lot of room for error there. We try to give value for money while giving excellent service." •


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