OVERNIGHT SUCCESS
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One year old this month, Network Overnight believes it has found the key to success in the parcels market. Karen Miles reports.
• If you ask 32-year-old Clive Churchward if he wants to make lots of money, he isn't bashful. "Yes, I want to be rich," he says.
Churchward is a director of the latest entrant to the overcrowded parcels market, Network Overnight. He also states: "I think there's a lot of money in it, with the right approach of keeping strong personal contact with the customer."
I-le rejects gloomy reports of the state of the parcels market. He believes that the major companies have not faced any big new competition for a long time, and adds: "There's so much potential for growth with a new service."
Network Overnight is still in its infancy. As the brainchild of Churchward, it began life last July with 25 hauliers across England, Scotland and Wales working in co-operation, under the Network Overnight trading name. One of these is Churchward's own Manchester-based FTS Express, which also serves as the operation's hub.
The Network Overnight formula is one of autonomous companies — each retaining close customer contact — combining forces. "There needs to be a boss at every depot otherwise the whole concept of the Network is defeated," Churchward says. This, he believes, keeps alive the primary success ingredient — customer contact. "It just seems logical that small companies should combine forces," he added.
Half of those original 25 companies, or "depots" as they are now called, have been replaced because of reliability problems but there have been no changes in the last six months.
Network Overnight's physical distribution system is hardly revolutionary.
The depots either run their vehicles — mostly 7.5 tonners — direct to the hub, or loads are consolidated through England and Scotland before trailing overnight to Manchester.
With the help of British Telecom's Prestel system loading is organised and the vehicles return home. At present around 500 consignments, of any size or type, are carried back each night for delivery.
The regular service offered is nextday in England and Wales and all of Scotland except the Highlands and Western and Northern Isles. A premium beforemidday service is also offered.
There are 48-hour deliveries to Northern Ireland and the Isle of Man, a 72 hour service to anywhere in the UK, timed delivery agreements, and in most areas, Saturday morning deliveries. Same day deliveries are also available, The rest of Network Overnight's operation is more original.
Each depot decides on the rates it will charge according to the price the local market will bare. The depots receive their income from the number of consignments they deliver.
Each depot (business) is therefore dependant on the marketing performance of all the other depots. But Churchward says that no depot has been thrown out through lack of sales. "We don't step on the toes of the depots. Providing their performance is good then they have their job for as long as they want," he said.
There is also no contractual obligation and the depots still continue their other types of haulage work.
As manager and hub of Network Overnight, FTS Express escapes the costs of trunking. Instead it conducts the administration, charges a 250 membership fee to the depots, and takes a minimal fee for the handling of the consignments. Most of FTS's profits come from its delivery of Network Overnight consignments in its allocated patch of Cheshire, Greater Manchester and Merseyside.
NEW HUB
The Manchester hub site is not permanent. Churchward wants a hub that possesses more doors for easy access, and thinks Network Overnight may have to build one. He also thinks that Warrington, to the west, is better geographically placed to be the hub. Compared to the Trafford Park site, 10 minutes would be knocked off the Scottish and Southern England trunking operations, he predicts.
Over the next year the system will become more noticeable to the general public. Although there is no compulsion to livery vehicles with the Network Overnight logo, Churchward is hoping that the profits from the service will encourage the depots to do so.
At present around half of Network Overnight's 150 vehicles are liveried up. The flagship is the 12.2m curtainsided trailer owned and run by the London depot, Avett Haulage at High Wycombe, which is emblazoned with "Network Overnight". Churchward confidently states that there should be enough profits to persuade the depots.
Churchward is looking for others to help. There are gaps in Hull and midWales and he wants two or three hauliers interested in becoming part of the Network Overnight operation to contact him.
He also wishes to hear from any international courier who wants to tie in with the plans for international expansion.
Every month there is a 12-15% increase in freight through the whole system, and this is sure to continue, he says. "Each company is still in its infancy and finding out its own market. I don't see our growth rate slowing down for at least two years."
This increased business has also created around another 60 jobs for the individual depots.
However, there is a problem. Like a family made up of strong singleminded individuals, laborious and stormy debate can still conclude with no major decisions. There has to be 75% agreement for major issues among the depots. The area suffering most from this is national promotion. "We would like to get the national advertising sorted out. Maybe we need to agree on a budget and then draw up a committee to spend it, otherwise we'll never do it," Churchward reflects.
Meanwhile he insists Network Overnight is onto a winning formula. Whatever happens, with 25 depots and 25 individual bosses, CM readers are unlikely to read news of its buy-out.