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The giant which didn' know its own strengt1
When events overtook Grimsby-based Humber McVeigh, it was very near the to of the UK haulage tree. Since then depot, and fleets have received major surgery i6,1 an effort to get the invalid back on its feet until now, paradoxically, the company is fitter than some to ward off the infection 01 recession. David Wilcox explains
UMBER McVeigh Transport ]d its origins in a small ware)using company in the early fties, and, like Topsy, it just 'ew and grew and by the midaventies had one of the largest mits in the country. It is now )ck to a fraction of that size.
Someone who has lived with e company through all its ups Id downs is David Marsh, rector and general manager of umber McVeigh's main rimsby depot. "When I joined 1956 it was just a small, young orage company called Humber 'arehousing. We had six .hicles then."
As the company expanded, e fleet also grew and became a oney-earner in its own right. A frigerated transport service as started and by 1964 the fleet imbered over 60. In 1965 Assoated Fisheries bought the cornmy, though it continued to aerate under the Humber Wahousing Group name. In the llowing years many smaller )ulage companies were acJired and in 1966 the fleet tailed o'ver 130.
The major acquisition came in PO when McVeigh Transport as bought for Elm from the ass Group. The newly-created Humber McVeigh Transport inherited 230 vehicles and 12 depots from McVeigh, well and truly making it first and foremost a haulage company, overshadowing the warehousing.
It reached its peak in 1975 with no less than 530 vehicles and 22 depots, placing it very near the top of the British haulage tree. David Marsh recalled those heady days: "Myself and other managers were chasing up and down the country from depot to depot like madmen. We were so busy we couldn't stand back and see what we were doing."
What had happened was that Humber McVeigh had outgrown its strength. There was an enormous amount of capital invested in depots and vehicles but the returns were nowhere near enough. Inflation at that time was just beginning to escalate and this added to Humber McVeigh's problems.
Jim Holt, then with a Transport Development Group company, was appointed as managing director of the parent company, the Humber Warehousing Group, with the remit of getting this ailing giant back into shape.
It turned out to be a Doctor Beeching role, requiring an almost ruthless approach. Under Jim Halt's contol, Humber McVeigh has gone from 530 vehicles to 53 and from 22 depots to five. Such a record would not normally be regarded as a success, but it is in this case because the company is now showing proper returns and making a profit.
Jim Holt told me that one of the first things he did when he joined the company was to make each of the depots more individually accountable so that those depots performing best could be identified — as could those with the poorest record.
For similar reasons the drivers' wage negotiations were switched from a national to a depot level. Throughout th period management took a vei firm line but despite some tent moments industrial relatiot have improved.
Tachographs, for instance, ti being used in most of the fiti, depots and have been accept* quite readily and without it 'need for any special paymerlt Humber McVeigh sends th tacho charts to an outside coPi pany for reading and anal4 Jim said it costs about £1.250 vehicle per week but it saves:0 playing somebody to do 'lust ,th and the reading is compre4 sive.
Having assessed the depot the least successful were sot leaving Humber McVeigh NW five:Grimsby, Imminghlin
:amer Transport near Scarbough and Granton Transport at ilsterworth near Grantham on a Al. The fifth depot at Avollouth has no vehicles based are; ills purely warehousing. The vehicle fleet was also ;iously pruned. Said David arsh: "At first we sold them on 3 open market, sometimes in lole batches. But then as the cond-hand market collapsed 3 started cannibalising them parts. We save more money
spares than the complete hide would be worth."
the company does sell a hide it usually tries to ensure 3t the buyer is not going to be lirect competitor with Hum ber ;Veigh. For instance, a lot of 3 trailers were sold to Ireland d another 50 or so went to rica.
While reducing the fleet, Imber McVeigh also used this portunity to rationalise the rious types of units. Having w n partly by acquisition, mber McVeigh had a fleet that is of the Heinz 57 variety and duded units by DAF, Merles-Benz, Volvo, Scania and lers. Jim Holt told me he was "horrified" at the cost of maintenance and spares when he joined the company. The fuel consumption was also poor; the fleet average was down to 50.411it/100km (5.6mpg).
So all the different types of unit were phased out and Humber McVeigh concentrated on just two — the Scania 110 and the Seddon Atkinson 400 with the Gardner 240 engine. The company bought its first Seddon Atkinson 400 in 1978 and these have proved so good that they now form the backbone of the fleet together with 13 Scania 110s arid a handful of ERF B-Series.
The Seddon Atkinsons are averaging around 37.61it/100km I7.5mpg) and so have substantially improved the fleet average. Maintenance downtime has been reduced to 6.7 per cent.
All the Scanias are operated out of the Grimsby depot so the spares are centralised. There is also a Scania distributor nearby.
Despite having sold so many vehicles, the Humber McVeigh trailer fleet is still relatively large — there are around 300 trailers in all, giving a trailer to unit ratio of six to one. Jim said that having had such a large fleet it made better sense to keep a lot of trailers; their usefulness for advance loading outweighs the price they would fetch on the second-hand market.
As Humber McVeigh reduced its depot network and fleet, Jim Holt and his management examined every aspect of the business to see if it was really making a worthwhile contribution. One of the activities on which the axe fell was international haulage.
This had been operating under the name of Humber International Transport Services and was running mainly to France, Germany and Italy. By September 1980 the rates had fallen so much that Jim Holt gave it six months to sink or swim. That six months was up in March this year and there has been no improvement so Humber International Transport Services was sold to another operator.
The only international involvement that the company still has is with Ireland, sending unaccompanied trailers over there and working in conjunction with an Irish haulier.
Humber McVeigh has also withdrawn substantially from the general haulage scene. Said David Marsh: "The rates for these one-off haulage jobs have fallen so low that it's just not worth doing them. Steel haulage is a good example. We used to do a lot of it but now we just do it for a few regular specialised steel customers."
Most of Humber McVeigh's haulage work is now part of a combined storage/haulage contract. "We're really primarily a warehousing company now," said Jim Holt. "The haulage is subservient to the storage."
All the company's warehouses are dry goods stores (there is no cold store) and a whole range of products are warehoused. A major customer is Courtaulds and fibres are stored and then transported to various ports for export.
About 60 to 70 per cent of Humber McVeigh's work is still export/import work based on the docks — mainly Hull, Immingham, Grimsby and Felixstowe. David Marsh spoke highly of the Hull dockers in particular — they will load unaccompanied trailers whereas some docks demand one unit per trailer.
Jim Halt's remit to get the continued overleaf ompany back into shape wasn't astricted to cutting back the iast profitable parts — he could e constructive as well as desuctive. His opportunity came arlier this year.
"I wanted to diversify a little nd utilise this site at Grimsby etter." said Jim. The answer he ame up with was to take on a irry franchise. "It came about imost by accident when our olsterworth depot (Granton ransport) had a Renault TR2B0 n demonstration,
"We were very impressed rith it. It performed well and we 'ere getting around 7.5mpg, quailing the Seddon Atkinsons. he only criticism we had was -let it seemed too fast!"
Renault approached Humber IcVeigh in March this year and he franchise idea was iscussed. Jim Holt initiated ome market research and as a 3sult he is pretty confident that ew commercial vehicle sales re going to pick up soon,
"Operators have been putting if their vehicle replacement for uch a long time now that soon tere must be a change. Beyond certain point the cost of main]ining the old vehicles will be come too much," thought Jim.
With its new Renault franchise Humber McVeigh hopes to be in the right place at the right time.
This new venture is due to open at the Grimsby depot today, August 1, and is under the name Humber Commercials. The official opening is scheduled for mid-September. The whole range of Renault lorries will be sold, together with parts and servicing. When I visited the depot earlier this month the workshops and stores were bemg refurbished in readiness for the launch.
There were already two Renault TR280 units in yard and these were destined to become demonstrators. Another three will be going into Humber McVeigh's own fleet at Grimsby — but with the addition of road speed governors restricting them to 105km/h {65mph).
I asked Jim Holt if he felt that taking on a lorry dealership was the right sort of expansion, bearing in mind that the company's traditional activities had been cut back.
"There's very little risk attached" he replied. "The market research we've done suggests this and the contract we've negotiated with Renault is very favourable."
The investment in the Grimsby workshops is no risk at all since Humber McVeigh hi always tended to be strong c the engineering side, sometirm taking on work for outside cu tome r& One would have thought th. the present recession migl have been the final nail Humber McVeigh's coffin. In fa the reverse has been true. Mo operators have had to adal only recently to the idea of eve capacity and the need to slii down the fleet or lay'-off men, But Humber McVeigh hE started a similar exercise undi Jim Holt several years earlii and so were not caught on th hop. The majority of the slin ming down had been done bu fore the current recession and v. many vehicles were disposed 1 at reasonable prices.
Jim Holt and David Marsh bi lieve that at 53 units the fleet about the right size. "We won be getting rid of any more bi neither do we want to buy ar more units unless we've gc definite contracts for them.
"It's extremely unlikely thi we'll get any more vehicles fc general haulage. Combine warehousing and haulag contracts are the sort of thing v. are interested in."
The last five years haven been easy for Humber McVeigl It can't be a pleasant job to la duce a fleet to one-tenth of ii original size.
Jim Holt: "I haven't enjoye doing it. How can you make s many people redundant pair lessly? But it's been necessary t survive. We're small compare with what we used to be, but z least we're doing reasonabl well now and I think everybod is happier."