CLEAN
Page 42
Page 43
If you've noticed an error in this article please click here to report it so we can fix it.
ndustry-watchers paid particular attention last month [April] when Exel announced its first full-year results since the company's merger with erstwhile rival Ocean Group. The performance of the newly mod £4.3bn-turnover group would ay a lot about the international logiccs market at a time when economic [ability, especially in the US, is looking ecidediy fragile.
There were no surprises, therefore, hen chief executive John Allan warned f a downturn in the US market and in 'le technology sector (the former conibutes roughly 30% of group turnover; le latter represents nearly 25% of the usiness by sector). Pre-tax profits ere down 5% to £190m.
But despite these pronouncements, le mood at Exel is far from downbeat. lews of the tough trading conditions verseas has been more than compenated for by a series of spectacular new ontracts secured in the first quarter of pis year which will lead Exel to create 00 new jobs in the Midlands.
letail operators hie company has secured no fewer than ine major contracts to handle the wareousing and distribution activities for ome of the UK's biggest retail operars. These include substantial strengthning of existing relationships with clients icluding Sainsbury's and Safeway, and NO contracts with new clients Selfridges nd Littlewoods. The contracts are worth bout £500m in total over the next couple If years; they are a major boost to Exei's trategy of developing multi-user distribtion centres in the Midlands.
John Dawson, director of corporate ffairs at Exel, describes these nine con-acts as "a great piece of good news". hey clearly are, for Exel. But what about Cher hauliers in the Midlands? Is this just he latest example of a big player getting
even bigger by snatching work from the smaller hauliers? And what about those BOO new vacancies? Will Exel simply fill them by poaching experienced drivers and warehouse staff from local firms?
Dawson acknowledges that there is a serious shortage of drivers, not just in the Midlands but nationwide, although that fact does not seem to worry him unduly: One thing I would say with regard to the recruitment of drivers is that we have a very strong position in the marketplace and people want to work for us." But he insists that Exel is not out to poach drivers, nor is it stealing the bread from the mouths of local hauliers.
"We will be using third-party haulage firms in addition to in-house fleets," says Dawson. Nor is this just a short-term strategy to get over the initial start-up phase: "I see us going more that way. Our role is very much the project-management of logistics and transport services...we are buying haulage services on behalf of our customers."
Of all these new contracts, the deal signed with Sainsbury's in late March most clearly shows the direction the company is taking: Exel is now one of only three core suppliers appointed by Sainsbury's as 'lead logistics providers".
The relationship should really be seen as a partnership, says Dawson, with client and supplier jointly establishing a national transport service centre (NTSC) in the Coventry area. The idea is that the NTSC will improve the efficiency and effectiveness of Sainsbury's transport fleets and help the retailer achieve its goal of reducing secondary distribution mileages by 5% by 2002 while increasing vehicle fill levels.
Dawson says this venture will build on the success Exel has already achieved for Marks & Spencer via Joint Retail Logistics (JRL), a joint venture between Exel and Tibbet & Britten—JRL was appointed the lead logistics provider for M&S's general merchandise in June 1999. Dawson is not yet able to say what proportion of the 800 new job vacancies will be for drivers, but he is confident that the overwhelming majority of them will be genuinely new job opportunities and that Exel's expansion will be good for the local transport industry.
Some, however, have their reservations. Harish Patel is regional industrial organiser for the Transport and General Workers' Union; he was instrumental in negotiating the union's agreement with Exel at Comet's huge distribution centre in Corby last year. His concerns lie with the local workforce: "There is a shortage of experienced HGV people in what we call the A14 corridor, which is where all these jobs are supposed to be. Labour turnover and wage inflation in the distribution sector has therefore been high."
Local workers
Patel believes that Exel should be employing and training up local workers, but he fears the company will import the skills over the heads of local people.
"In Corby it's actually happening," he reports. "They're bringing people in and even paying for their accommodation. We're saying, why not invest that money in training and career development for local people?"
"I think he's got an interesting point," says Dawson. "We try hard to provide training and a career progression; we introduce people to the logistics industry and train them up."
He confirms that Exel has yet to initi
ate any recruitment drive or train scheme for the region, but stresses tl the will is there: "It's not economical us to move people from one part of • country to another, so where we can will really try to develop local opportt ties and career support."
Dawson also points out that Exel is in the "construction" phase. "We dr need to go out straight away and find I people to fill 800 vacancies," he says.
So in a few weeks or morn Midlands-based hauliers might find tht selves in talks with Exel; perhaps neg ating work for a client they already c with directly. Graham Fuller, owner Fuller & Sons of West Bromwich, already been there: he operates a cot of tankers for Exel-owned Trade TE which took over the logistics operatio Bass Breweries about five years "They've been fairly decent to us," s Fuller. "But to them we're just anot haulier...to the brewery we used to part of the team.
"I don't particularly like doing V party work—I've always had my work," he adds. Fuller especially disl the uncertainty that has entered the r tionship: "That first Christmas we A very busy, but then in January the ph just never rang..."
Exel's creation of 800 new jobs in logistics industry is, like motherhood apple pie, simply beyond criticism. only time will tell the true extent to w the local hauliers and their commi will really benefit.