Jobs at stake in NFC parcels purge
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AS MANY as 1,000 jobs could disappear this year in a major drive to reverse climbing losses in the National Freight Consortium's parcels group.
By Alan Millar
The group, dominated by Roadline UK, lost £8.2m in 1983/84 (1982/83: £5.4m), a figure which NEC chairman Sir Peter Thompson described last week as "very disappointing". It contrasts with an overall rise in NFC profits from £19.4m to £28.3m and a 108 per cent rise in trading profits from £11.2m to £23.3m.
While NFC chief executive Jack Mather said last week: "We can take our time with parcels. The losses are not dealing us a body blow," it is clear that the Consortium will not tolerate losses in parcels for all time.
NFC admits that its efforts last year to sell its way out of Roadline's losses by building up its sales force have been a failure, and the return of United States-based NFC executive Bill Collins this month to run the parcels group heralds the start of a new strategy. Part of the strategy is to divide Roadline's resources between household and trade deliveries, and it is planned that handling and damage risk will be reduced by sending over 90 per cent of packages direct from collection to delivery depot.
A new productivity scheme is planned which will pay drivers on a delivery-based rate rather than a driving-based rate, to try to increase the volume of parcels delivered.
Discussions have already begun between Roadline management and trades union representatives, and the company has indicated it is looking for a reduction of between 800 and 1,000 posts. In 1983, it had 4,000 staff.
Eight of the 40 depots could also be closed, if the plan goes ahead.
Transport and General Workers Union delegates were meeting this week, and were expected to press for alternative proposals to be put to Roadline before such surgery is accepted.
Low parcels rates, fuelled by very active competition in the parcels market, is being blamed for much of the difficulty faced by NFC in the parcels market, but management also says the company lost customer confidence a year ago when some TGWU members operated a goslow in pursuit of a pay claim.
National Carriers Parcels, the smaller (and also loss-making) partner in NFC's parcels group cut its depot network to 13 locations three years ago. It has no plans for any cost cutting 'other than "good housekeeping" at present, a spokesman told CM.
Ironically, NFC as a whole increased its labour force in 1983/84, from 23,125 to 23,158; but the expansion of Pickfords Travel and the acquisition of Merchants Home Delivery Service in the United States and lesser growth in the Far East was almost counterbalanced by a fall of 722 in the number of transport, distribution and storage jobs in the United Kingdom.
Redundancy costs fell from £5.1m in 1982/83 to £2.3m, and Sir Peter Thompson stressed that the quality of profits at NEC have been improved by pointing to a fall in profits from the disposal of property from £11.6m to £4.7m.
Sir Peter honoured an earlier pledge not to float NFC on the stock exchange before 1987 and said the matter would not be put to shareholders before next year, and possibly not until 1987.
He said that employee shareholders are maintaining their stake in the privatised conglomorate. More than half of the workforce now has shares and a drive will be made this year to increase the number. The original £1 shares of 1982 are now worth £8.60 each.