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Real growth area awaits smaller hauliers

16th February 1985
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Page 33, 16th February 1985 — Real growth area awaits smaller hauliers
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Which of the following most accurately describes the problem?

Dedicated distribution need not be abandoned to large firms like BRS. David Wilcox talks to one of the smaller companies

COMPANIES such as BRS and Mitchell Cotts have identified dedicated or contract distribution as a real growth area in the haulage industry. They frequently tell us on CM that they have won a contract to take over the distribution for yet another manufacturer or supplier who has decided to escape the problems of vehicles, drivers, scheduling, maintenance ...

But the business is not solely the domain of the BRSs of this world. Terry Priestley is showing that there is potential for the smaller haulier to carve a niche in the contract distribution market too.

Terry Priestley is TDP Distribution of Hitchin, Hertfordshire, a company that now has its entire fleet working on long-term contract to others. This represents a radical change in course for TDP: it started as a "hot-shot" express carrier, did some semi-regular delivery work, had a brief foray into the removal business and very nearly joined the parcels retrace before, in 1979, deciding that contract distribution was the way ahead. After giving up his job as a sales representative because he wanted to run his own business, Terry Priestley dipped his toes in the transport indutry in November 1970 in the classic way — as a man with a van. The proud owner of a secondhand Luton Transit bought from a railway arch in South London, he offered to take anything that could fit in a Transit anywhere.

Luckily, one of his early customers was paper manufacturer Spicer Cowan who needed a one-off load delivered urgently. This was the start of two or three years' steady work for Spicer Cowan, delivering paper to printers in the Home Counties and necessitating a second van and driver for Terry Priestley. With a mixture of this work and many more one-off delivery jobs TDP Express Deliveries (as the company was then called) grew steadily, man

aging to treble its turnover at the end of each of its first three years.

By 1973 Terry Priestley saw the need for larger vehicles and so bought his first 7.5-tonner, a Bedford TK. "I had a simple business philosophy, right from the outset," he said. "I would do the work if it was physically possible and consistent with the law. And I aimed to be utterly reliable, not the cheapest. We picked up a lot of work simply by giving reliability and service."

In 1974/5 TDP struck out on to the Continent as a result of an urgent request to deliver a load of kitchen furniture to Paris. This was the first of many trips to almost every European and Scandinavian country. A Fiat 0M75 bought in 1975 became the company's Continental workhorse. Although a 7.5-tonner it was fitted with a TIR tilt and downplated to just under six tonnes gvw — vehicles under this weight can run permit-free on Continental work.

It signalled a swing towards the Fiat 7.5-tonner for TDP, on both UK and Continental work. Terry Priestley explained that he primarily needed a versatile vehicle because TDP's work varied so much. It had to be manoeuvrable for multi-drop deliveries in London and yet long-legged and comfortable for long-distance motorway work.

TDP felt that the Fiat offered the best compromise in 7.5-tonners at that time. Two strong points in its favour was that it had a long-chassis option as standard that could accept a 6.1m (20ft) body, and that Fiat had service facilities on the Continent. TIR bodywork was also chosen for its versatility.

The growth of the fleet during the Seventies had entailed several changes of premises in the North Hertfordshire area and it was in 1978 that TDP moved to its current depot in Hitchin. It bought the depot complete with 20 staff and 13 vehicles belonging to a longestablished removal company, Deamer Bros. Changing the name to Deamers, Terry Priestley tried to integrate what he described as a "mish-mash" of work with TOP's. Deamers' work included removals for the USAF bases in the area, domestic removals and mail order distribution in London.

This blend was not particularly profitable and Terry Priestley soon sold the Deamers' pantechnicons and sought a more clearly defined future for his company, which then had a fleet strength of 25 to 30 vehicles.

Terry Priestley recalled that he was on the brink of opting whole-heartedly for the parcels business when he met with somebody already in parcels who dissuaded him. He talked Terry out of it on the grounds that it is a business with a high aggravation factor. "We thought about the quality of life that we wanted. With parcels you are forever chasing and losing business. You have to be big to do it properly and if we can't do it properly we would rather not do it all."

Instead, Terry Priestley chose contract distribution and in 1979 won his first real dedicated distribution contract. It was with Zodiac Toys and was to deliver toys to its branches all round the UK. For the first time TDP bought vehilces specifically for the job — three 13-tonne-gvw Fiat 130 boxvans.

That was a turning point and since then TDP has become a 100 per cent contract distribution company, prompting a name change to TDP Distribution in February 1983. Ironically, the company now turns down requests for general haulage work — exactly the opposite of its policy in the early days. "Now, we will not buy vehicles speculatively. We will only buy against contract," said Terry Priestley.

The current TDP contract lineup is as follows:

AEI. Seven Ford and Dodge 7.5tonners are operated for air freight agents Air Express International at Staines, delivering and collecting air freight in the South.

Browne & Day. TDP Distribution runs three 13-tonne-gvw Mercedes-Benz 1213s on this contract, delivering corrugated board packing cases from Browne & Day's Luton factory to industrial users. The vehicles have demountable curtainsided bodies.

Coulter Electronics. This Lutonbased company makes electronic equipment for the medical industry and TDP is contracted to carry out national distribution delivering to hospitals. It uses three DAf 2100 16ton boxvans equipped with air suspension, sleeper cabs and cantilever tail-lifts.

Du Pont (UK). TDP delivers Du Pont's chemicals and agrochemicals to industry in the South East of England using three Daf 2100 16-tonners. They have Boalloy Tautliner bodies. W. H. Smith. Two 13-tonne and one 7.5-tonne-gvw Fiats are used to deliver to W. H. Smith branches from its Dunstable distribution centre. TDP operates this contract alongside BRS contract vehicles.

Zodiac Toys. Demountable bodies are used on the six Daf 2100 boxvans operating this toy delivery contract. There is 2:1 ratio of bodies to chassis to enable day-time loading.

While explaining that "utter reliability" has been the key to TDP's success, Terry Priestley said that he in turn demands similarly high standards of service from his vehicles' manufacturers and their dealers. "I'm amazed at the kind of treatment that some people put up with. Not me."

He had some strong words to say on the subject, recounting how dealers and certain manufacturers' representatives have single-handedly dissuaded him from buying particular vehicles. He named poor reliability, bad value for money and highhanded attitudes by some manufacturers as some of the reasons for TDP's choice of Daf 2100 as its 16-ton chassis. TOP moved up to 16-ton operation in 1983 and bought 12 chassis in this category that year. Apart from the other manufacturers virtually de-selecting themselves Daf won the order because of its combination of sleeper cab and air suspension on a 16-tonner.

Air suspension was a prerequisite for two reasons. First, TDP wanted the superior ride it gives for contracts like Coulter Electronics where delicate loads are in transit. Second, the air suspension is cleverly used to give the necessary lift for the Ray Smith demount system used on the Zodiac Toys contract vehicles; the electrohydraulic lift pack is not needed. Terry Priestley is a firm believer in air suspension and said that in years to come people will wonder what steel springs are.

The high specification of these 16-tanners is continued with sideguards and anti-spray equipment.

For most of the contracts TDP can choose what type of vehicles to operate; Terry Priestley usually presents an entire distribution plan based around the customer's required service level. The vehicles are naturally in the client's livery but TDP is careful to ensure the contract allows the TDP name to appear as well, normally on the cab.

The contract term is commonly five years to coincide with the written down life of the vehicles. However, the contract price is reviewed annually to allow for the change in the cost of fuel, wages and so on, and TDP presents its case to the clients each year. Terry Priestley reports that a reasoned, itemised cost review rather than an overall, blanket request for an increase, has, so far, proved successful in justifying the necessary rise.

Terry Priestley said that in retrospect he is pleased that he switched to contract distribution, preferring its long-term stability to the ultra-competitive life in the parcels business or the fast-moving mercurial express carrier that he used to be — "exciting stuff," as he recalled.

"Our contracts are based on a mutual need and a mutual respect between us and the client," he said. TDP also finds the fleet easier to manage as it is effectively compartmentalised into six small fleets. Most of the vehicles and drivers return to TDP's Hitchin depot each night — "that's the way we can best manage it."

With 25 vehicles out on contracts TDP carries a high proportion of spare vehicles. There are six that stand ready to help with short-term peaks and to cover for servicing or breakdowns. And there are a further four detaxed and parked up ready to step in for the huge pre-Christmas peak on the Zodiac Toys contract. Terry Priestley said that this level of reserves is necessary to guarantee the reliability that he guarantees his customers.

Admitting that if a 20-vehicle contract came along he would probably take it ("we've got the capacity") Terry Priestley said he does not intend to expand TDP for the sake of sheer size. "We are not into multi-depot networks and we don't want to be another BRS. We have a personal touch that we don't want to lose."

BRS has depots at nearby Stevenage and Dunstable and although Terry Priestley said that BRS has salesmen on the road, selling the concept of contract distribution, he does not feel too threatened. "I know BRS has some good people but I would pit my ability against any BRS depot manager."

While developing the contract distribution theme, Terry Priestley is also branching out into contract hire where he supplies just the vehicle and its maintenance without a driver — TDP is shortly to put an 11-tonne-gvw Mercedes-Benz 1114 into service with its first contract-hire customer.

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Locations: London, Paris

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