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by lain Sherriff, MITA, AIRTE
Page 44
Page 45
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John Menzies' Holdings formed its transport company in 1968 but did not run it for a profit until the introduction of 0 licensing
OWN-ACCOUNT transport managers, if they have not already done so. must soon face up to the question: "Are we to continue to operate as service units to all other departments in the organization or should we become a revenue-earning department by using our vehicles for hire-and-reward work?" This facility was granted to them with the advent of operators' licensing.
Many operators have already decided that they will continue as a service department, giving as their reason that nothing must interfere with the service requirements of their companies' own customers. Many more, I fear, have made the same decision for other reasons, one of which I suspect is that they do not wish to become involved in hire-and-reward work because they lack the ability to do so.
One man who has made up his mind and who has the ability to run a hire-and-reward fleet closely integrated with own-account operation is Mr Alex Hunter, transport manager of John Menzies (Transport) Ltd, whose principal traffic at one time was the delivery of newspapers and periodicals to Menzies' own retail outlets. Mr Hunter explains his company's decision to enter the hire-and-reward field in this way: "Transport operators never could afford the luxury of having vehicles standing idle or running empty. For the own-account operator this was an item of oncost which had to be borne by the article offered for sale, in the same way as any other establishment charge".
In 1968 John Menzies' Holdings formed its transport company and at that time it applied for and obtained 100 vehicles on B licence which permitted it to carry goods for other newspaper distributors. This condition was so restrictive that it could hardly be considered real hire-and-reward traffic. It was not until the introduction of operators' licensing that John Menzies ran its transport for profit.
In the beginning the policy was to carry parcels along the routes covered by vehicles delivering newspapers or when they were returning to base. Gradually, however, caught up by the exciting prospect of running vehicles more profitably and at the same time meeting requests from existing customers, the smalls developed into unit-load traffic and instead of waiting for customers to call on them Menzies have gone out after new customers.
The company's policy now is any goods for any customer, anywhere and at any time. It claims to be a specialist in distribution and is now offering a national transport service, and allied to it a consultancy service.
John Menzies (Transport) has split its operations, for rates purposes, into three principal zones. Ex Edinburgh to Scottish destinations, ex Glasgow to Scottish destinations and ex either Edinburgh or Glasgow to England. It has two parcels tariffs, one for each Scottish area, and a national tariff, each of 12 zones. The tariffs rise from 281b to lOcwt by 71b steps to the first hundredweight and thereafter by 281b steps. The perimeters of the zones in Scotland are set at 5, 10, 20, 30, 40, 50, 75, 100, 125, 150, 200 and 250 miles. The
national zone perimeters are set at 10, 30, 50 miles and in 50-mile steps to 400, then at 500 and finally over 500 miles.
The lowest rate for a 281b parcel in the Scottish area is 40p, while lOcwt lots on the national scale travelling more than 500 miles will cost £14.30.
There are over 1000 standard rates in John Menzies' tariff but special rates are quoted for Northern Ireland, Isle of Wight and the Western Isles. There is also a surcharge of £.1.75 on all consignments to docks, wharves and airports. This extremely sophisticated and professional rates structure was not arrived at overnight, and 'according to Mr Hunter not without a number of mistakes occurring in the early stages.
Mr Hunter was amazed to find how little assistance was available when setting up his organization and this in part was the reason for John Menzies including a consultancy service in its transport organization. At the beginning there was a degree of over-staffing, but through natural wastage this has now been overcome. The fleet of 350 vehicles is administered by a staff of 28 which includes managers, accountants and clerks. The traffic operation is controlled by 24 traffic specialists. Maintenance is carried out in five workshops engaging 24 skilled craftsmen.
In newspaper delivery even more than in own-account operation anything which interferes with the service can be fatal. The most perishable commodity marketed today is news—within hours it becomes history. So John Menzies cannot allow hire-and-reward work to interfere with newspaper deliveries, although it must be emphasized that the company's distribution division is a customer of the transport company.
Full circle As the hire-and-reward work developed it became apparent that the operation had almost described a full circle and there was a danger that newspaper deliveries would sutler. Consequently a re-examination of the situation had to be carried out. This examination indicated that there was still a great deal of potential in the already profitable parcels service. It was decided that the parcels service should continue and at the first sign that newspaper deliveries on any route might be interfered with an additional vehicle was purchased to take over the excess parcels deliveries.
Over the past year this has resulted in almost an entirely new fleet of newspaper delivery vehicles coming onto the road. In fact it has now put the company almost into the position of having a hire-and-reward fleet and an •own-account fleet. The temptation could be for Mr Hunter to extend the parcels service with these "own-account" vehicles even further, but he recognizes that in 18 months' time the position would again arise where newspaper deliveries might be threatened—it would be like living on a treadmill.
Nevertheless, ever mindful of the adage that stationary vehicles and empty running increase overheads the vehicles must be used. He is, however, following a new line to ensure maximum use of his newspaper delivery fleet.
The vehicles are hired on contract to the newspaper distribution division from 4 am until 7.30 am each day and thereafter are put out on a hire-and-drive contract. They are available for hire from 8 am to 5 pm daily without drivers and Menzies undertakes their maintenance, insurance, fuelling and cleaning. Since the vehicles are all under 30cwt unladen and therefore not specified on an operator's licence the hirer does not experience any serious legal implications, though he has to observe drivers' hours limits.
During June, and for the first time ever, John Menzies (Transport) was advertising these vehicles for hire. Mr Hunter sees them as being particularly attractive to small "high street" traders, such as butchers, florists, dry cleaners, hardware establishments, greengrocers and small grocers. This method of operation ensures the maximum use of the vehicles without any interference with their primary function. Where vehicles are employed on both types of traffic they are engaged for 13 hours in 24 for six days each week. The vehicles are also available for spot hire by private individuals.
Drivers of these light vans finishing at 7.30 am are required to report back at 11 am. They are then engaged until 4 pm on collection and delivery work for the trunk runs or on emergency parcels deliveries.
On its trunk services between Glasgow or Edinburgh and London, Menzies has been using Freightliners Ltd. During the past six months Mr Hunter said that the Freightliner rates had increased by 18-1per cent and consequently serious consideration must now be given to trunking overnight by road. By using their depot at Leeds as a changeover point, trunk drivers would not require to be away from home and therefore overnight expenses would not be involved.
While using the Freightliner service John Menzies does its own collection and delivery and packs consignments into its own containers. These containers are uplifted in London by W. H. Smith & Sons Ltd, who are operating a similar type of service in England. Loads are broken down at Old Ford Road, Hackney and W. H. Smith then arrange for their delivery and the collection of northbound consignments for Menzies in the south of England--that is, with the exception of London. The London c. and d. traffic is carried on John Menzies' London vehicles.
The entire Menzies fleet is in the range between 6 cwt carrying capacity and 16 tons gvw and is being standardized on Bedford. To increase productivity the Menzies traffic is now packed in mobile cages. Where unit loads are involved, two men can discharge 10 tons of parcels in 30 minutes whereas before these mobile pallets were employed, it took four men three hours for-the same operation.
This streamlining of operations goes beyond the physical side of the business and into the accounts department where the company has negotiated a flat rate tariff with many of its regular customers. By this method the same rate applies for parcels of similar weight regardless of their destination.
Mr Hunter says he is now in direct competition with established parcels operators. He is chairman of the Scottish area of the Freight Transport Association and he admitted to me that he had given serious consideration to his position with FTA when he began trading for hire and reward but decided that, with the lines of demarcation between own-account and hire-and-reward operators so indistinct, his continued membership of FTA was justified. In addition he has the justification that slightly more than 50 per cent of Menzies' traffic is delivery to their own retail outlets. It is perfectly clear that in the not too distant future this balance will change, since Mr Hunter states quite categorically that it is his intention to make maximum use of every vehicle in the fleet.
The staff at Menzies is recruited from within and at the moment every member of the transport clerical staff is preparing to sit the examination for the intermediate grade of the Chartered Institute of Transport. The one "imported" member is Mr W. Rendall, formerly with SPD, who is now Menzies' traffic manager.
There is an air of enthusiasm at John Menzies (Transport) Ltd, a certain excitement about a new venture and an atmosphere which, sorry to say, I have never associated with own-account operators.