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• There are big moves afoot at Road Operator Associated
Page 48
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Delivery Services (Roads), the hauliers' cooperative which offers members a credit card for fuel, breakdown and other services.
The most obvious signs are a new office and a new managing director, but behind these are plans to extend its range of services and boost membership fivefold within five years.
Bob Sturgess takes over the running of the 11-year-old organisation from founder Dave Allen, following Roads management merger with Sturgess's company Thames Valley Training in August. He plans to make Roads more commercial and improve its buying power.
Although the two companies will share offices in Milton, Oxfordshire, Roads will stay financially independent. "It is not a financial merger," says Allen. "We found the services we offered were complementary and, as I was retiring, we decided on a management merger."
Now Roads, which currently has 180 members and says it gains an average of one a week, is broadening its range of services. It has just signed a deal with finance group Abbey Life under which Roads will get a commission for every policy sold to one of its members. Abbey Life says it can offer Roads hauliers personal schemes on everything from mortgages to pension. It is considering extending this to commercial mortgages and vehicle insurance.
PROFIT-MAKING
Roads was set up in 1978 by 16 "friendly competitors" in the south of England. They wanted to establish a purchasing club to share overheads and seek return loads. It has 40 shareholders — each restricted to 100 non-dividend-paying shares — and 11 directors. Other subscribers, who each pay a £25 joining fee, have no obligation to deal with the group.
Roads is run as a profit-making organisation, although all the money it makes is pumped back into services for its members. Its managing director and one secretary are paid salaries.
Most members, says Allen, hear about Roads by word of mouth and are attracted by the credit card. Hauliers who join are entitled to one card a driver and 2,500 are in circulation. Allen says the card is the only one in the industry offering credit on a full range of services, instead of, for example, fuel only. Unlike conventional credit cards it is con-proof, he says.
One of the deals Roads has through its card is with Shell. Members can use 15 bunkering points throughout the country. Drivers use the card, Shell bills Roads and Roads charges the hauliers. Allen says diesel bought with the card works out 9.5 pence cheaper than pump prices.
Roads also has agreements with Tyreservices, breakdown operator Octagon and Silver Shield for windscreen replacement.
Members whose drivers carry the card get discounts on a variety of goods. These include Shell lubricants, Sealink and Red Funnel ferries and even AWD trucks. Drivers travelling to the Continent can get cheap rates in a chain of French motels.
Sturgess is also hoping to extend the Shell bunkering to the Continent, possibly by introducing a second card.
Roads' biggest member is local Milton haulier Cannon, which has 60 trucks. About six of its members, however, are owner-operators. Hauliers who want to join must first complete an application form, with two credit references and details about their company. Allen stresses that not just anyone who applies will be accepted. "Our credit vetting procedure is stringent. We do extend credit to members, so we could lose out," he says.
He speaks from experience. At least three Roads members have had to be sacked for failing to meet credit obligations. But he insists that Roads' record has been good. "In 11 years we have lost 22,000," he says.
Applicants must have an established operating base. It helps if they have been around a while and are a member of the Road Haulage Association or some other trade body, such as the British Association of Removers.
On average, nine out of 10 applications are accepted. If Allen has any doubt about the potential member, he visits the premises. "I've been in the business all my life. I can smell if a company isn't quite right," he says. As a last resort, he will ask for accounts. "If they refused to show us these, we could be suspicious anyway."
Sturgess hopes to increase membership of Roads to 1,000 in five years. This, he says, would give the organisation real purchasing power when it came to deals on fuel, ferries and other services. Most suppliers are interested in a ready pool of 1,000 customers.
CO-EXISTING Allun and Sturgess deny they compete with the Road Haulage Association for members. "We co-exist with the RHA, the FTA and BAR in a friendly way. We are associate members of them ail," says Allen. "None of these trade organisations do credit cards. The RHA services the industry in a different way; it doesn't enter credit risks."
Allen, who is 65 next year, will stay with Roads as financial director and then as non-executive director. He will run a Roads subsidiary, consultancy firm Roads Truck Parks. The name stems from when Allen dabbled with finding old quarries and sites for possible tnickstops and lorry parks. He has been in the transport industry all his life, first as a driver.
Sturgess was in electronics and sales before joining Thames Valley Training in 1983. Under the merger, Roads members get a 5% discount on TVT services, which include HGV, clerical, computer, transport manager and Certificate of Professional Competence courses.
While Roads was originally formed to organise return loads for its members, this side of its activities has flopped. "If we became a load broker, we would have to take 10 of already depressed rates. But we will still do free introductions, for example if haulier A rings to say he wants two pallets taken back from Glasgow," says Allen.
0 Anyone interested in joining Roads should call Diane Lloyd on (0235) 833145. By Murdo Morrison