Rider on the storm
Page 25
Page 27
Page 28
If you've noticed an error in this article please click here to report it so we can fix it.
After posting a loss in 2008/09, what stopped Caledonian Logistics joining last year’s roll call of transport fatalities? CM talks to MD Derek Mitchell
Words: Ian Norwell /Images: Anthony Bramley and John Henderson
No one running a logistics operation has had
it easy in the past couple of years, and although Aber deen’s Caledonian Logistics has been around for only 12 years, it clearly has the maturity to cope with tough market conditions. Its secret lies in the lineage of the management team and the important partnerships it has forged. Behind company founder Derek Mitchell stand most of the management and staff from the former Munro Transport of Aberdeen.
When Munro departed the scene in the late 1990s, securing the contracts it had left behind was an important frst step in building Caledonian’s business. From the outset, Manchester was the key and Derek was supported by Tony Worthington, boss of AK Worthington and now a fellow Partnerlink member, who stood by the new venture from day one.
When he launched Caledonian in early 1999, Derek had a seasoned team who knew how to manage any business and inancial storms ahead and he continues to invest in new professionals.
The Mitchell family make up four of Caledonian Logistics’ team of 77 full-time employees. Sons Scott, Darron and Nicholas are systems manager, warehouse manager and trafic clerk respectively.
After just about a decade of carefully planned and managed growth, the bad times set in with a vengeance. Speaking in calm Scottish tones from his Aberdeen ofice, Derek relects on the past few years. “We had four clients go down in 2008/9 and that dropped a £300,000 bad debt into our laps with not a lot of warning. While we were busy sorting that out, the Inverurie paper mill followed them down the tubes. It was a pain in the tonsils for us and seriously bad for the local community. It took more than 370 jobs and 200 years of history with it.” As for 2009/10, Derek concedes it’s been tough. “Yes, it’s been a recessionary year for sure, but we’ve won new clients as well as taking a hit on business failures,” he says. “It’s our broad client base, not dominated by any one individual, nor reliant on any one sector, and a strong balance sheet that’s seen us through the worst.” Although an independent haulier, Caledonian Logistics is a member of Palletways and its yellow and black liveried trucks cover more than 4,500 miles every week on the regular trunk to Lichield. This partnership and others are vital to the Caledonian business.
In good company
Partnerlink is probably the most signiicant transport consortium of its kind and Caledonian is a key member. It’s in good company, with the two biggest members being AK Worthington and Knights of Old.
“Trusting the partners is vital for the enterprise and it works exceptionally well. We’ve worked with Worthington since day one,” says Derek.
With 14 active members and seven shareholders, it’s a symbiotic relationship that serves them all well. The joint operation gives a combined leet that has heavy clout, enviable lexibility to win new business, and true national coverage. Although the group’s structure has undoubted green operating beneits, such as the consolidation of shared loads and cutting empty running, it obviously helps the bottom line too.
Looking at the workforce, CM asks how easy it is to not only come by good drivers but, more importantly, keep them. Derek smiles. “Drivers are always a requirement and a good driver is like any other employee,” he says.
“They fulil an important role and they can be hard to hang on to.
“You must remember that Aberdeen is an area of low unemployment and somebody else offering a slightly higher rate elsewhere can lure people away. Distribution drivers on multi-drop work with 10 or 20 drops a day are doing a tough job and there is other work around.
“There’s also the offshore factor here in Aberdeen and the tales of high salaries out on the platforms, or even ashore in the businesses associated with the oil industry, are often not as they irst appear. Of our 77 staff, 53 are drivers. They are a good group of lads.” Like everyone else, Caledonian has had to endure the big dipper of truck supply lead times over the past few years, with feast following famine, but getting credit has not been too much of a struggle. Even so, it has changed banks recently, and while inance is available, it’s still tight.
As for growth areas, Derek says they are there, despite the doomsayers. “Pallet distribution has always been healthy and the partnerships we have in place make it a good business for us,” he says.
“Long distance haulage is growing too, but in both cases it’s the margins that are getting tighter.”
The other side of the Caledonian coin is its warehousing operation. This has grown in line with the business and Caledonian currently works with 40,000ft2, but increasing this capacity is an urgent priority as it is bursting at the seams. A local move that will double this capacity is imminent.
With a new reviviied leet, growing warehousing space, key partnerships in place and a pragmatic MD at the helm, Caledonian has ridden out the storm and is moving on, older and wiser. Not bad for a 12-year old. ■