Lynx fighting back
Page 8
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• Lynx Express Delivery holds a unique position in the National Freight Consortium: it's the only member company not making a profit. While its fellow NFC divisions have been enjoying a midas touch, Lynx has been struggling to get onto the right side of the balance sheet — no mean task considering that three years ago National Carriers and Roadline, the NFC's ailing parcels duo which were eventually merged to become Lynx in June last year, were together losing close to 29 million.
Within a company as blatantly profitable as NFC, Lynx's poor performance has been noticeable.
This unenviable conspicuousness, however, appears to be fading. Under managing director Graham Roberts, Lynx is developing a new line in confidence and self-help, bolstered by continued investment which is expected to amount to just over 25 million during 1988/89.
After limping home with a trading loss of 22.3 million in 1986/87 (22.6 million in the previous year), based on a turnover of 256.1 million (266 million in 85/86) Lynx should finish its financial year up to the end of October with a turnover in excess of 270 million says Roberts. More significantly, Lynx should also have made the jump, if not into the black, then at least into the grey of break even, he says.
Exactly by how much Lynx will break even Roberts is reluctant to predict, but the fact that the company is reducing its losses and increasing its business (revenue will be up by 12% by the end of October says Roberts) has provided a tangible boost to the morale of the workforce.
FUTURE GROWTH
Roberts has little doubt that the current trend can be sustained. Indeed he now seems less preoccupied with Lynx's immediate prospects and rather more concerned with its longterm future growth.
"We are no longer a tremendous financial burden on NFC, we're optimistic of the future and we've got to look beyond the current span of 12 months. We know we're going to produce a profit — the only question is how much?"
The springboard to the resurgence of NFC's fortunes in the bitterly-contested parcels market has clearly been the relaunching of the old National Carriers-Roadline company as Lynx — a move which saw some 2150,000 alone spent on new paint for the company's fleet of rigids, tractors and trailers.
Lynx Express Delivery, however, is more than just a new coat of paint. Its arrival completed the final stage of a massive restructuring (some might say purging) of the old NC-R empire, which included trimming the workforce from 4,000 to its current 3,200, reducing the depot network to 21 and spending 29 million on new vehicles, communications equipment and computers. The distinctive Lynx fleet now stands at 270 tractors, 990 rigids and 1,050 trailers.
According to Roberts, "Even the most cynical person within our company would have to concede that the relaunch has had a dramatic effect."
After months of rumours the re-birth of Lynx also demonstrated that NFC was prepared to persevere with parcels.
It was, believes Roberts, "The statement that most demonstrated to our employees that we had a future", and while Lynx's boss accepts that there is still some more work to be done in projecting the Lynx image further he maintains the relaunch has had the required effect.
OUTWARD APPEARANCE
If NFC's parcels company has changed its outward appearance, it has also modified the way it does its business. Eighteen months ago, guaranteed delivery services accounted for less than 35% of its overall revenue. Today, some twothirds of Lynx's business comes from guaranteed work, and in particular from its next day services.
There is now far less ad hoc business reports Roberts, (a fact highlighted by our parcel survey on page 38). "We are directing our selling and targetting more closely on Next-Day, and 3-Day business".
The greater emphasis on guaranteed services, however, is no accident. Rather it reflects the current trend within the overall parcels market. "People who were big in non-guaranteed parcels are now switching over to guaranteed work", claims Roberts. "If you were to look at the parcels market in five years time, there will not be any service which does not carry some sort of guarantee . . . If anything, the nature of the guarantee will be even more important", he adds.
As part of its push into the guaranteed sector, Lynx is also concentrating more on developing its long-term contracts. "Over the last 18 months, we have seen an increase in the contracts signed in excess of one year — and guaran teed services on more than a one-year contract account for over 10% of our new business gained," says Roberts.
In recent years the buzz-phrase in parcels has been hub operatio — yet Lynx remains defiantly out of step with the trend.
"At the moment we don't need to operate from a hub" asserts Roberts. "We've got enough traffic to sustain truck runs to all our depots on a nightly basis."
While the majority of Lynx': revenue is generated within the UK, Roberts is looking to wards mainland Europe for much-needed growth. Lynx currently operates within the Euro Express partnership, handling the UK collection ane delivery of parcels which are then fed to a consortium of Continental operators.
The contribution from Lynx European next-day business is admittedly "not very much. . about 21.5 million in turnover per year", but Roberts is convinced that with the approach of the liberalised European transport community it "will bi playing a very significant part in our turnover by 1992."
Acknowledging the problem: of the past has even been use. to advantage when pitching foi a new business.
"Because of our history, we're probably more reluctant to make boastful claims about our company. We're more hon est in saying that we're not 100%. If you sit in front of a customer and tell him nothing goes wrong he knows you're misleading him."
The fact that Lynx is finally making headway has also meant that "NFC hasn't been crawling all over us, because we've been making good and steady progress". Roberts' confidence appears to have rubbed off on the workforce. "They don't perceive themselves as losers."
0 by Brian Weatherley