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Pieces of el
Page 16
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NI Alliances in haulage are nothing new—after all logistics giant -DG started out as a group of regional big player's coming together. In more recent times the co-operation between Jack Richards, Garn Transport and Knowles Transport as Wisbech Roadways has proved that even close rivals can benefit from teamwork.
Now eight of the UK's bigger regional hauliers have come together to form a new transport operation called Jigsaw. The intention is to compete for business that has previously been out of their league, aiming for the sort of contracts usually tendered for by dedicated logistics operators.
Well recognised
The companres involved hereStoford Transport, Widdowson Group, Elddis Transport, CM Downton, Pollock (Scotrans). Macfarlane Transport, F Swain & Sons and Currie European— are all well recognised, profitable operators in their own right, all running over 100 trucks with turnover in the £15m-plus ballpark. Between them, they have 30 depots, more than 1,200 trucks and 2,000 trailers.
Although most say that they could continue as they are, achieving reasonable year-onyear growth, all believe that this alliance is the only way to com
pete with the market's big players. That said, Jigsaw thinks it can do a better job through the 'personal touch' offered by the family-run firms and thinks it can do the work cheaper too.
Paul Smith, the man behind the project and Jigsaw's commercial director, claims that an over-reliance on subcontractors by third and fourth party logistics firms means that service levels suffer and prices are pushed up. He claims that by removing that link in the chain and the overheads associated with a logistics firm, plus the hauliers agreeing to rebate transport costs, Jigsaw can offer a large saving on rates.
The structure of the new firm is such that there are nine equal shareholders—the eight hauliers plus management consultants Labyrinth Solutions, to which Smith belongs. Interestingly there is the possibility of any one of the shareholders, Labyrinth included, being voted off by the others if certain circumstances arise.
Additionally the firm will have two partnerships, one with Great Bear Distribution to provide warehousing and one with Palletways. However, although some of the member hauliers
are already part of various pallet networks, they say there will be no conflict as it will be Jigsaw, not the individual companies, putting specific work through Palietways. As it is, each individual haulier will continue to run as a stand-alone entity, so only vehicles working on Jigsaw contracts will change livery.
Although there are no contracts in place at present. Smith is ambitious: "This is not about £500,000 annual transport contracts. This is about major contracts in excess of £.5m a year." He adds that negotiations are ongoing for two contracts although he declines to give specific details.
Fraser Pollock of Pollock (Scotrans) says he believes that the eight hauliers have one big advantage over their logistics rivals: "All the firms involved in Jigsaw are family-run businesses—we feel that we can give our customers a lot more personal attention and the concept of on-time delivery actually means something to us.
"We take a lot of pride in our fleets and delivering customer satisfaction, something that other firms maybe lose track of."
At present Pollack runs about 120 trucks, has a turnover of 112m per annum and operates two depots.
However, Pollock says that Jigsaw will now give it access to around 30 depots across the country, a massive leap by any reckoning and a development which he says will also help with the Working Time Directive requirements.
Jigsaw is promising that no subcontractors will be used in any of its contracts. Despite this, Pollock, like any haulier, will continue using its preferred subbies on its own work where it needs to. Indeed, at least one company within Jigsaw is actually a subcontractor to another larger operator—Currie European handling some Continental work for Securicor.
Jigsaw's members already have close working relationships with one another—geography dictates that Pollock and Currie European have close ties, but further south Macfarlane and CM Downton are closer still with their joint magazine distribution company, Fastmag. Boss Ian Macfarlane thinks that links like these will stand Jigsaw in good stead: "It's given us a lot of confidence to know that hauliers can work together. Since we've been in discussions with the other Jigsaw partners we've got a lot closer to them and there's a little bit of trading between the companies, or just offers to help one another out when the need arises."
He sees Jigsaw as very much the future for Macfarlane: "I can't speak for everybody else," he says. "But it's going to be good for us. We'd survive without it but it's certainly going to benefit us long-term."
Macfarlane says that Jigsaw is aiming to pick up at least one client in its first year, two in the second and another two in the third. Macfarlane is already on course to hit a turnover of Slim this year, up £5m on last year.
Mick Swain at Cheshirebased F Swain & Sons believes that eventually, Jigsaw could add over 20% per year to its profits, although he says it is more likely to be around 10% in the first year. He adds: "In the past if I was offered a piece of work in the 25-6m mark I would have struggled to do it—it would be too large an increment which would unbalance us.
"But when you divide the bigger contracts by eight then you are left with much more sustainable portions."