The art of logistics Australian-style
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Fast freighting on a global scale is the aim of the International Parcels Express Company. Relying solely on road transport, its delivery times are usually quicker than air's and half the price. Tim Cobb has been looking at the European set-up
KANGAROOS, Wallabies, Dame Edna Everidge and a strong rugby team are not Australia's only claims to fame; the last decade has seen the arrival in Europe of two major express freight services that started life "down under."
Thomas Nationwide Transport, or TNT, was the first on the British scene in 1978. It was followed a year later by Ipec, the International Parcels Express Company.
While TNT trained its sights firmly on the British scene, Ipec set up 34 depots in six European countries almost overnight. Its aim was simple to beat conventional airfreight times by using road transport.
Ipec now has 60 depots in 10 countries, employs 1,500 people and provides door-to-door service to over 40,000 European destinations. America has been added to the list, with a 72-hour door-to-door cargo service to Detroit and Los Angeles. More destinations will be added next year. And in September two more countries will come on tap Austria and Denmark.
The success of the company is conveyed by one word says John White, European marketing director "logistics." Ipec provides the customer with a complete doorto-door service. It carries out forwarding, warehousing and distribution, with no agents to help or hinder, he explained.
Added to this there is the dynamic Australian management, headed by Ipec chairman Gordon Barton, whose straightforward approach allows for a smooth-running company, Mr White explained.
Ipec has invested a great deal of money in logistics and the theory behind it. The distribution system is guaranteed and depends heavily upon reliability. Because of this, the service it offers is not cheap.
Ten per cent of a product's manufacturing price can be attributed to logistics. If a company's problem is to move its products from A to B, Ipec believes it can solve it. "We take care of this problem," Mr White said. "Just tell us where you want the product to end up."
Ion has two hubs where the freight is taken, sorted and despatched. Northampton is the UK hub and Arnhem in the Netherlands is its European counterpart.
Freight from the UK bound for Europe passes through both hubs before reaching its destination. A package sent from Leeds to Munich, for example, will be picked up from the customer's premises, taken to the nearest depot (which happens to be Leeds) and put on the lorry bound for Northampton.
The Northampton hub has an on-site customs clearance depot and once the package has been cleared, it is loaded on to another vehicle and transported to the Arnhem hub, via the ports of Felixstowe and Zeebrugge. Another customs check on the parcel at Arnhem hub and it's on its way to the Munich depot.
Smaller vans then deliver the package to the postal address. The whole door-to-door operation takes under 48 hours.
Mr Barton had a tough time founding his company. As a law student in Sydney, Australia, he could often be seen hauling freight to eke out his living. When oppressive legislation to protect the railways was imposed, causing penal licensing fees on hauliers, Mr Barton took the matter to court.
He claimed a constitutional right to trade freely between the states, and after a test case in 1954, won a court battle for the return of the fees he had paid. The capital was now available and Ipec was formed. A European tour in 1978 led to the setting up of lpec Europe.
Four years on, and the Ipec freight transportation system can now be likened to a commercial bus service. The lorries at the hubs wait for freight to come in from the outlying depots. If there is only one package to be transporte_d, the lorry will still run. "There is no hanging around waiting for a full load," Mr White explained. "The customers want speed and regularity of service," To help speed up the process even further, Ipec has managed to woo customs officials into establishing clearance depots at its two hub centres. And by persistent harassment of the customs officers at Northampton, freight can now be checked and cleared using photocopies of the relevant invoices.
So while a package and its invoice travel from Arnhem to Northampton, an invoice copy is telexed over to Northampton, allowing the goods to be cleared before they arrive.
Although this is a distinct advantage, Ipec is at pains to point out that the concession is available to any company that really pushes for it.
The Arnhem hub enjoys even more freedom, thanks to a good working relationship with the customs officials. Goods can be delivered to customers and cleared by customs later. In fact, customs officials will clear goods up to 48 hours after they have been delivered.
Custom control in the UK i still too tight, said Doug Fel marketing manager. "If package ends up on the wron! lorry and is sent to the UK, it wi have to stay there unti documents can be sent fror Arnhem to prove that a mistak has occurred. We cannot simpl send it back on the next lorry.
Despite this problem, deliver times frOm the UK to the 1 European countries are normall between 48 and 72 hours, wit Italy and Southern Franc reached within 96 hours Delivery times are usually fastE than air freight and almost ha the price, although often mor expensive than slower roa transport distributio companies.
"We claim that 95 per cent c the time we are faster and mar efficient than airfreight," White stressed. "Our syster also gives a guarantee. W cannot beat everyone, but if th customer picks out a town c village anywhere in Europe, w will tell him how much it wi cost and how long it will take t get there."
Faster distribution times ca be had by taking one's packag to an !pee depot and collecting the other end. This also work out cheaper.
And if price is a mar important factor than speei 'pee runs an economy servic ansit times are still aranteed, but may be up to 48 Iurs slower than normal livery times. There are no ecial vehicles for this service, t packages are put aside to ow the express packages to be livered first.
3ometimes it happens that Dnomy service parcels arrive the same time as the express reels, which obviously pleases customer, but Ipee tries to oid this situation.
Ipec has a total European fleet 600 vehicles, each of which vers on average 450km every 3ht. The majority of these are ifs, although a few Volvos and 4Ns are also used. Added to s is a fleet of Fiat and Merdes vans for town work, colIting and delivering parcels to a customers' doors. Most of a vans used on the Continent a telephone-linked to their del!, allowing more time to be ent on the road and fewer Dos at the depot.
As it is the driver who often is most contact with the stonier, he is kitted out with a -tart brown and yellow suit. ery vehicle in the fleet is
painted in "processed yellow" to maintain a strong corporate image. Even the walls at the Northampton hub follow suit, in a yellow of such brilliance that it makes a discarded banana skin on a newly-laid tarmac road look inconspicuous.
The larger vehicles that carry out the line-haul (depot to depot) journeys range from the Daf 1100 to the 3300 Series. Drawbar trailer combinations are taking over the fleet as the company believes they offer more flexibility.
The roads used are, on the whole, good. The difference between the UK and European roads is, as ever, fairly pronounced, with the UK coming off worse. Travelling from the Northampton hub to Felixstowe in the Ipee courtesy car (no prizes for guessing in what colour), we follow the A40, which twists its way through the countryside, through villages barely designed to cater for the horse and cart, let alone a 32 tonne artic and trailer.
Ipee has pushed for a long time to get the Cambridge bypass built. Delivery times would improve, the roads would be straighter and of a higher standard, and residential areas would be avoided, Mr Fell explained.
About 55 vehicles deliver and collect from the Northampton hub every 24 hours, the majority arriving and departing at night. Arnhem usually caters for about 45 vehicles per 24 hours.
Each vehicle has a life of just three years. In that time it can expect to travel about 250,000km. "We have to have an efficient fleet," Mr White explained. "If we say to our customer 'you will not get your package because our vehicle broke down' he will understandably be upset."
Maintenance at the UK hub is carried out mainly by Daf dealers in the Northampton area, although there is a small workshop at the hub. Relationships with the Dutch vehicle manufacturer are very good, thanks mainly to !pees ancestors, for lpec established its European network after taking over Gelder Spetra, a Dutch distribution company which operated Daf vehicles.
Irmo has set up meetings between its drivers and the Daf technicians and fitters. Drivers can thereby air their feelings about vehicles and discuss any problems. "This is a very important event," Mr White said. "The drivers and their vehicles are our life blood."
The company uses Dafaid so that vehicles that break-down can be fixed and sent on their way as quickly as possible. The bill is settled later.
Maintenance at the Arnhem hub is carried out on-site. In its workshop, with accommodation for eight vehicles, lorries that stay at the hub overnight before the return journey are checked by a team of around 30 fitters. To facilitate maintenance checks, the chassis of every vehicle is painted grey so any oil leaks show up easily.
The workshop is divided into different sections to cater for engine problems, bodywork problems and so on. Every vehicle is cleaned before once more going onto the road and the wheel hubs retouched if necessary, to keep their bright white colour (Mr Barton insists on having the wheel hubs painted white to make the whole appearance of the vehicle look cleaner and smarter).
The fronts of the tractive units are notable not only by their smart appearance, but also by the absence of the DAF ensignia. Why give free advertising to another company, points out Mr Barton?
Drivers on the line-hauls that come into the Arnhem hub usually stay overnight in order to observe the EEC driving hours regulations. Drivers have the choice of sleeper cab or hotel accommodation, courtesy of lpec. The company believes in treating them fairly. After all, not much business would get done without them!
All staff at lpec are given a degree of responsibility. If problem arises, they are encouraged to try and solve it as soon as possible and smooth things over. If the course of action chosen turns out to be wrong, then if a similar problem occurs again, they will be able to make the right decision, Mr White said.
The company's fortunes are based on providing a fast, regu lar distribution service and maintaining close customer links. Road transport is used in Europe not because lpec is a lorry company, but because ills the most viable form of transport, Mr White pointed out.
"Using lorries provides a system. Our delivery times are already beating conventional airfreight times," Mr White said. "But if we need improved transport times we would not hesitate in using planes. Lorries would still be employed for freight delivery, though," he added.
"Planes would allow a 24-hour European service at a greater price. Not everyone wants this service, and we would still have the Express and Economy Road Services."
The future of !pee is geared for expansion. Its ultimate aim is a world distribution network offering express services to most countries. With Australia already served by lpec, 12 European countries covered by the end of this year, and the USA not too far off, it would seem well on its way to its main ambition.
The advertising and marketing of its products are also being stepped up. For the first time ever, ipec is holding international exhibitions.
Managing directors will now be on the receiving end of the company's advertising literature, whereas before it was the middle and lower management.
• Since this article was written, Ipec has been discussing the company's sale to several interested companies. See page 15 for further news.