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Customer service is the bedrock of success
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Marketing and efficiency are important, says Ken Devereux, of family run firm Devereux Developments, but Long-term success stems from delivering what your clients want.
Words: Louise Cole / Images: Tom Cunningham JUST LIKE a number of other firms trying to ride out the current recession, Devereux Developments is bracing itself in 2009. The Billingham, County Durham-based company posted a respectable profit against its £4m turnover in 2006, and director Ken Devereux says last year's figures will be much the same.
"The past six months trading, ending September 2008, will also be strong, but the next six months won't be as good. We've lost some overheads naturally through people retiring, but we have not yet had to consider contracting.That said, efficiency will fall off in the next six months, and it's efficiency — good vehicle utilisation — that gives you a margin," he says.
Devereux's game plan is sound (and typical). "Watch costs, reduce overheads and reduce the fleet if necessary': he states, but he also warns other operators not to act too hastily. "Some do it sooner rather than later, but that isn't always good. This industry isn't like manufacturing, where you can simply cut output by 25% to match demand. Most firms have a core of customers, and the important thing is maintaining efficiency and good customer service levels. It's important not to reduce to the level where you can't provide the customer with what they want. We can't afford to compromise service levels."
Many of Devereux's customers are long standing, with some accounts solid for more than 40 years. "That's a big achievement in this market," says Devereux, and one that he doesn't intend to sacrifice for short-term cash flow benefits.
Be sure you can deliver Bringing in new work also has to be handled carefully Devereux believes, so that growth doesn't jeopardise your standards. "The pallet networks have taught firms to market more directly. But in seeking out new business and taking more customers with smaller consignments, you are adding noughts to the numbers of customers you have. That in itself brings its own customer and credit management problems.
"You can market too aggressively and not be able to manage the result."
Nonetheless, the pallet network Fortec has been a solid addition to the Devereux portfolio since 2001.
He says: "Fortec's great. It has never sold itself and swapped equity for debt as some of the pallet networks have, so it doesn't have to chase volume. It's rare that we have missing or damaged freight, no insurance claims — its quality levels are high."
Devereux believes there are still opportunities for companies that haven't looked at pallet networks: "It's perhaps harder for parcels companies to adjust to pallet networks than for transport companies, but we've had a new member join recently who has never been in a network before.
-There are always opportunities, particularly in densely populated areas where it's possible to split a postcode."
Traning initiatives Devereux Developments is the umbrella firm for Britannia Devereux, the removals firm that forms half the business with Devereux Transport and Distribution (sometimes still known by the original partnership name KW Devercux & Sons). While his brother Mike handles the removals arm. Tony and Ken run the distribution business.
Devereux says it's hard to predict which side of the business will feel the recession more keenly — certainly domestic removals are at "rock bottom': The businesses are kept distinct from one another, but many drivers and administrators have worked in both, which means extra expertise is available should the need arise.
Training and high skills levels are important to Devereux; the company's own driver-trainer works with every driver through induction, annual training and follows any kind of incident with the driver. Plus, its training programme is soon be approved for the Driver CPC. "People were worried we would be returned to the kind of training schemes that had little relevance for the business The fact we can tailor our own course to the business is definitely a plus."
Industry standards While Devereux supports practical initiatives to improve standards, he gets a little tired of being patronised. "We've had trade associations and politicians and even customers telling us how to make improvements without realising that these things are ingrained in the professionalism of the industry Who are they trying to educate? Of course we check tyre pressures, adjust fifth wheels, catch misaligned axles and run aerodynamically. We used to check the calorific value of different fuels for the best mpg. Unfortunately, it's a bit harder to do now because there are fewer petrochemical engineers on Teesside," he explains.
"We have a very efficient industry, better than anywhere in Europe. Yet we are not treated with anything like the respect we deserve by politicians. We have a third-rate infrastructure for our drivers, poorer than on the Continent. I would like to see drivers have proper parking facilities and rest stops, places they can eat in a civilised environment and not be stuck in a little caravan in a lay-by." This is one area in which Devereux's Transport Association membership pays dividends — all the members have agreed to provide facilities for each other's drivers.
"We provide toilets and showers and try to make them as safe as we can," he says. TA members also help with breakdowns and emergency repairs, which saves the growing cost of using dealer networks out on the road.
But there is one thing the politicians have got right, "We must thank our politicians for investing money in the roads. The Al has seen major improvements, and the widening of the Ml is great news."
Devereux Developments is a second-generation family firm that has already brought in three kids from the next generation to learn the business. Devereux and his brothers hope they will take over when the time comes. "Only around 7% to 8% of family firms make it to a third generation. But transport is a good grounding for life — you have to adapt. You learn how to look after yourself and your business because no-one else will do it for you."
He hopes the next generation can learn to shoulder the responsibility. But not yet. "I still love it," he says.