Working the land
Page 32
Page 34
Page 35
If you've noticed an error in this article please click here to report it so we can fix it.
Buying and selling land and assets has helped EH Nicholls become the successful haulage company it is today.
Words: Dave Young Images: Mike Harding
It's probably just as well Paul Nicholls trained as an accountant before assuming the reins of the family firm. These days, road haulage is just as much about key performance indicators (KPIs) and bottom lines as curtainsiders and airlines.
Eli Nicholls is an integral part of supply chains ending at the big supermarkets or retail giants dominating British commerce, although these may not be the primary client Consequently. operations are frequently dominated by the need to hit half-hourly time slots and achieve 97% delivery efficiency. This requires the co-ordinated interaction of teamwork and software, in addition to an all-attic fleet.
The Nicholls name has long been connected with the Kent town of Sittingboume.The firm was founded by Paul's father, Ernie Nicholls. in 1965 and got much of its early work from the adjacent paper mills, which once characterised this part of north Kent.
Visiting its yard involves turning into an unsigned, unlikely-looking, hard-to-spot residential cul-de-sac before emerging Tardis-like' into a large yard. On the periphery of the concrete hard-standing are a small warehouse, a truckwash, a vehicle workshop and a humble single-storey office building.
Land before time Such modest trappings give little clue to just how professional a set-up this is. Ernie not only built a successful business, but also prudently bought the land he worked from. An earlier company site in the middle of town has been redeveloped into a shopping mall and it's no secret MD Paul Nicholls would like to sell this yard and move to a purpose-built location.
A depot on a major trunk route at the edge of town would better suit the firm's increasingly 24/7 operation, and would no doubt please its neighbours who probably don't view a transport yard as good for property prices.
The policy of buying assets and reinvesting equity continues. Nicholls has recently bought a number of new tractor units — all its fleet, including trailers, is wholly owned and funded from reserves.
In the fortunate position of being able to self-fund an acquisition in the midst of a recession, Nicholls consequently got a good price on 15 new Iveco Stralis tractors and 35 new trailers. The extra units were required, in part, to service a new contract subcontracting to fellow Kent
The company maintains hauler Alan Firmin.This £6m-a-year, five-year deal with its mainly hieco fleet in drywall manufacturer Knauf — to handle the distribution house operations from its Sittingbourne plant — was snatched from incumbent haulier Eddie Stobart. EH Nicholls will provide 10 vehicles as a dedicated subcontractor on the operation. In contrast to the Nicholls fleet's traditional red colours, some of the new Knauf contract lvecos will be in the client's pale-blue livery (see pie right).
Despite this close working partnership, Nicholls prefers to source its own UK traffic for depots in Kent, Buxton, Derbyshire. and Coalville. Leicestershirc..The firm has avoided pallet networks despite Nicholls twice being approached, in favour of full-load work. Nicholls has decided against such formalised arrangements, although it does co-operate with other hauliers. "We've always been independent," says Paul Nicholls. "I'm sure alliances work, but we have plenty of independent volume and prefer to find and deliver our own loads." Regarding pallet networks, he says: "Rates are too tight and dealing with single pallets can be as complex as a full load."
To ensure flexibility the entire 46-truck, 125-trailer fleet is plated to function at up to 44 tonnes GCW Nicholls has long operated regular Benelux services — both accompanied and unaccompanied trailers — being geographically well situated for a choice of routes to the Continent, working as far as Lille, Arras and Boulogne in France and Bruges in Belgium. Some trucks stay abroad all week but they are right-hand drive and English-registered.
Nicholls tried basing and registering vehicles in France but found the legislation and operating hours too restrictive. He says: "We walked away from the experiment. Delays on ferries and traffic congestion mean accompanied traffic struggles to get over and back in a day. 2010 has been the worst in recent years for crosswater traffic."
Nicholls says it is impossible to compete on cost. particularly with eastern European hauliers. Consequently, the firm concentrates on service and co-operation with European associates MGF Logistique and Logways is increasingly important. Trailers of fast-moving consumer goods are picked up in south-east France, Germany and Italy and taken by train from Avignon to Dunkerque, where Nicholls' trucks collect them for onward delivery in the UK. Much of this work is for Nestle, but Nicholls also brings back logs and stone slabs.
In the early days, most of Nicholls' traffic was from the nearby Kelmsley and Sittingboume paper mills. "Nicholls was the biggest haulier out of Kelmsley," he says. "We had all of our eggs in one basket, but it worked well for us."
As this specialist local manufacturing base has declined, so has its importance to Nicholls's customer portfolio, although it still takes packing out and waste paper in for recycling. Fortunately, the client list is impressive and varied. In addition to Knauf and Nestle., Nicholls also works for Wincanton proudly displaying its testimonial to its efforts on its website and as a 3PL contractor to TDG on its Aggregate Industries contract. Co-ordinating such diverse traffic presents its own challenges. The Knauf work can fluctuate between 50 and 90 loads a day (including Firmin's greater share) and, says Nicholls:"There's difficulty regarding customer flexibility on loading slots: all want early in the day and everything just in time."
As stockholding diminishes, hitting delivery windows to ensure regular replenishment becomes essential to retaining contracts. To ensure geographical coverage, Nicholls has out-based vehicles working for Nestle-, but admits he probably needs a bigger network in the Midlands to meet surges in demand. "Tesco may want day one for day two deliveries, (up to) 50 loads within 24 hours.
"Every time a truck goes out, it must get a return load or double up," says Nicholls, agreeing with CM's suggestion that there is a big difference between backload rates (usually barely covering running costs) and running loaded in both directions with cargo he's sourced.
"There is work out there, but you have to avoid being busy idiots. We are pushed by the big retailers, relations with Nestle are constantly changing, it's a good learning relationship. We get feedback that acts as a catalyst."
Growth plans
-We are a traditional haulier," says Nicholls, referring to the firm's commitment to customer service and self-sufficiency. "We need to show ourselves as a real force, and up our public profile."
This is too true and familiar to many fellow hauliers, but FlINicholls appears better placed than many to survive and succeed. •