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T r R 4 k6Cai l fi 700 miles to market
Page 74
Page 75
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on hired transport by imaPA.SAFIReTreriff'
A food producer sends 25,000 tons to the world's markets annual ly and does not use his own vehicles to do it IN THE far north of Scotland in the village of Fochabers in Morayshire WO years ago the wife of George Baxter, the village grocer, began jam making with the produce of their own garden, for sale within the store; so popular did the product become that Mrs Baxter began producing other preserves from the berries found in the glens around Speyside.
Still within the confines of the village shop the business developed further into the sale of soups produced from vegetables and from the wild game shot on the neighbouring mountainsides. The produce was sold in the village store and in neighbouring villages. This was the ideal trading situation: raw materials at the back door converted into foodstuffs within the store and sold over the counter. With no thought of distribution or transport to concern the manufacturer.
Today Banters of Scotland dispatch 500 tons of food each week to markets throughout Scotland, Yorkshire, Lancashire, Tyneside and London. They export to 70 countries including the USA, Australia, Mauritius, Samoa, St Vincent, Iceland, Canada, the central African States and the West Indies. They list 80 different products which range from lobster bisque and pheasant consomme to royal game soup and wild rowan jelly.
Still the raw materials come from around the Speyside factory; the company has a 600-acre farm, 15,000 acres of mountainside shooting and a river beat from which it draws fresh fish in season. Banters' growth has been gradual but today there are
400 regular employees with an additional 500 casual workers moving into the factory during the height of the fruit season—the population of Fochabers is a little over 1000. The company claims to be the biggest game user in the world, its factory occupies 20 acres of Fochabers village—and -after over a century of trading it still does not have any distribution or transport problems.
The board of Banters takes the view that it is in business to produce food. Said Mr G. King, the buyer: "We concentrate on the thing we can do best—producing food. Transport is the task of the professional transport man".
Banters operate only two vehicles: a Ford 13800 and a 22cwt Transit.
These vehicles are used mainly on internal work, running packaging from the store into the production plant or transporting produce from the cold store to the production plant. Feeding the plant with the raw material and taking the finished produce to the retail outlets is done by hired transport.
Baxters' distribution is not as sophisticated or as large as that of Petfoods described elsewhere in this issue. There are no transport contracts and hiring is all done as required.
The development of Banters' trading has been in waves, spreading south, taking in first of all the industrial belt of Scotland, later moving into Tyneside and then into Yorks and Lanes and then a great leap, missing the Midlands, moving into the London area. Consequently it was necessary to obtain the services of a haulage .(3litractor who was engaged in trunk work sad one who would be prepared to carry ;mall lots or capacity loads for delivery ;ither to general distribution warehouses, ;upermarket warehouses or direct to retail ;ustomers' premises. The contractor also tad to be willing and able to bring back iacking materials, fruit and vegetables and ;pices on his return journey in random lots.
The contractor who has built up this ;ervice on day-to-day spot hiring is 2ameron and Gibbon of Aberdeen, 60 miles listant from Baxters' factory. Over the past ive years the traffic to the south has ncreased from one vehicle to around 20 ;ach week. While the spot hire system may it first sight seem precarious lain Gibbon, nanaging director of the haulage company, old me that his traffic staff were now aware if Baxters' requirements almost as soon as aaxters' distribution manager became aware if it, and that they built into their 3rogramme for the week sufficient vehicles o meet the company's outward traffic.
Mr R. Kilpatrick, Baxters' distribution nanager, requires to give Cameron and 3ibbon only 48 hours notice for his iouthbound traffic. This is normally loaded m a Thursday or Friday morning, it leaves he Aberdeen premises of the contractor at 3aturday lunchtime and with two overnight ;tops the London traffic is being delivered to he consignee early on Monday morning_ Most of the southbound traffic is in units if one ton or capacity loads and Baxters ire charged on a ton-mile basis and pay a iremium on all drops after two. Loads go ither directly into the retail outlets or are lischarged at Butler's warehouse in 3reenford, Sainsbury's at Buntingford and 3asingstoke, Martins at Chipping Sodbury ir BRS Parcels in Leeds. The warehousing ;ompanies then arrange for the distribution if small lots to stores in their areas against irders sent from Fochabers. The delivered 'rice to Baxters' customers includes a iroportion of the transport and distribution :osts and are not shown separately.
Baxters build into the manufacturing cost if each product a transport cost. I mderstand that the food industry estimates ransport costs equal about 5 per cent of the nanufactured price. However, since Baxters lave no fixed contract prices for transport he commercial manager budgets on the irevious year's cost with an uplift for inticipated increases.
Throughout the year, at the end of each bur-week period the actual costs are :om pared with the budget. Only when the otal oncost has increased sharply is the nanufactured price adjusted and then only f after a detailed examination of the reasons ;hows that the increase cannot be reversed.
Handling and transport costs can vary `rom £1.50 per ton in the area close to the 'actory to 0.00 per ton in the London area.
Where a retail outlet is taking 50 or 60 ;ases, Cameron and Gibbon make the lelivery direct. Mr Gibbon emphasizes that his is a business which has been built :ompletely on service. To many it might mem not only unreasonable but unprofitable br a contractor to be asked to make a ;pecial delivery of one ton. Mr Gibbon says bat he is prepared to meet his customers' requirements for such requests but emphasizes that they are few and far between on outward traffic.
Traffic in the north west of Scotland goes out with local contractors. There are a number of one-man operators in the area and they are used for the delivery of small lots to the more remote Highland villages. John Barrie (Contractor) Ltd of Glasgow transports the Irish traffic for Baxters to the roll-on /roll-off ferry at Ardrossan. Bulk consignments are stored at the premises of Depot Services on Balmoral Trading Estate, Belfast, and distributed to customers as required.
Baxters' outward traffic occupies up to 25 vehicles a week and it could be argued that it would be more economic for them to run a separate transport department within their organization. The policy decision which was taken against this was made after a trial run in 1960 and after a careful cost analysis had been made of the total outward and inward operation.
In more recent times Baxters has been marketing its produce through the medium of television advertising. Mr Kilpatrick told me that it was his experience that there was an increase in demand of up to 125 per cent from the area covered by the TV advertisements. "Quite clearly," he said "this is a situation which would play havoc with the operation of an internal transport fleet and this is another reason why we consider the physical aspect of our transport is better left in the hands of a haulage contractor." He made the point, however, that the distribution planning aspect of the exercise was still Baxters' responsibility.
Inward traffic affected
Just as television advertising affects the outward traffic there are aspects over which the company has no control which affects the inward traffic. Fochabers has not the facility of neighbouring package suppliers and is over 700 miles from one of its main suppliers. Caps for preserve jars are made in Poole, Dorset, and the trunk operator, Cameron and Gibbon, either picks up direct from the Poole factory or arranges for a contractor in the south to lift the caps which are transhipped to a Cameron and Gibbon trailer after it has discharged in London.
After discharging loads in Tyneside or Yorkshire vehicles may have to be directed to Lincoln or Cambridge 500 miles from the factory to pick up vegetables during the season. Glass jars are produced at a bottle factory in Alloa, 150 miles distant. The nearest supplier is the Metal Box Company in Arbroath, 80 miles away where cans are produced. This, of course, means that Cameron and Gibbon often require to travel empty from the north east of England to central Scotland or in fact north east of Scotland before picking up a load for return to the production plant.
Ninety per cent of the raw material and packaging is delivered to Baxters in hired transport, the other ten per cent of the material is transported on contractors' vehicles and goes into Baxters at a delivered price. This ten per cent comprises mainly soft fruits from Perth and Angus; these are picked up from the growers during July and August by David Duncan, Contractor, of Aylth in Perthshire. The fruits are crated and loaded in the fields and after discharge at the factory the empty crates are returned to the growers for refilling. Again Mr Kilpatrick points out that during the fruit season demand fluctuates depending on how the harvest ripens. Consequently spot hire is the only satisfactory way of arranging for the produce to reach the production line.
Of general concern to those in the manufacturing and distribution field is the loss of pallets which is proving to be an extremely costly business. In this respect Baxters are no different from others. Mr R. Smith, the commercial manager, is concerned that his company—which again he emphasizes is a food producer— should be involved in endeavouring to trace its own pallets or in the return of pallets which other suppliers bring in to the factory. He is now contemplating approaching hauliers to ask them to accept complete responsibility for the redistribution of pallets, and goes so far as to suggest that hauliers should supply pallets at a charge as part of the vehicle and its equipment in the same way as they supply sheets and ropes at the moment.
Own-account operation began because manufacturers wished to ensure that their products were delivered safely and by a driver whom they controlled. It goes without saying that the owner-drivers who handle Baxters' local traffic are responsible for it from leaving the factory until it reaches the store. Similarly, Cameron and Gibbons' drivers who pick up the load in Fochabers are the same men who deliver it to the markets in the south and who carry back the raw material.
That the contractor shows a keen interest in Baxters' traffic is borne out by an incident which took place last month. A driver had neglected to pick up a one-ton consignment from a factory on his return from the south. Cameron and Gibbon immediately dispatched a vehicle for the small lot and suspended the first driver for one week.
When one considers that a red deer shot on a Scottish mountainside and delivered to the factory on the back of a garron—a purebred Highland pony—or pheasants carried in the panniers of a game-keeper's bicycle become the ingredients of royal game soup and may finish up in the outback of Australia without ever once travelling on a Baxters vehicle there would appear to be a case for other small but expanding manufacturers to look very carefully at their distribution methods. Baxters has a very successful distribution system with well-documented consignments. Signatures are obtained on consignment notes each time goods change hands and pilferage, according to Mr Kilpatrick, is almost non-existent.
The company also enjoys the facility of freedom of choice of contractor, since there are no hire contracts binding them to any particular haulier. However, their close liaison with their main contractor and his appreciation that service matters, suggests that the current method of operation will last for some time.