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The car transporting business is in a state of flux. Large operators are swallowing up smaller ones and contracts switching from road to rail.
8 As the number of operators dwindle, will the rich get richer? This month French-owned car transporter operator Walon takes over a multi-million-pound car delivery contract for the export of 60,000 Rover Group cars a year to destinations throughout northern Europe. The UK part of the journey will immediately switch to roadbased transporters, after many years of travelling direct to the port of Harwich by rail. But the contract could be significant for other reasons.
It takes place at a time when a number of car manufacturers and franchise holders have been busy switching port loyalties— involving many of the transporter companies in logistical changes—and follows a flurry of activity last year some of the delivery companies changing hands and the loss of some of the more famous names.
Acquisitions
The Tibbett & Britten acquisitions of Toleman (March '94), and Silcock Express (September '93) merged into the new name of Axial in November. In December NFC completed the transfer of its car delivery concern to John I Jacobs, the shipping owner and harbour concern which owns Sheertruck International. In the same month another car transporter operation changed hands, when auction company ADT snapped up Eurofleet, a significant player on the spot-hire market.
Rover says the tactical change which led to the decision to use Walon's car transporter fleet has been forced on it partly because its previous export operation via Harwich was under pressure on two fronts. Export volumes are increasing while ferry schedules at the port are being reduced. This is a result of plans by Ford (which uses Axial) and Mercedes-Benz (which uses Richard Lawson) to use other ports of entry.
Italian-bound Rover cars will continue to run by rail direct to Arluno via the Channel Tunnel. MAT Transauto (which lost out to Walon) will continue its rail relationship with Rover through this traffic, and retains its existing road business with Rover in the UK. The 60,000 cars now under Walon's supervision take to the road, bound for a London area port such as Purfleet, before the heading to the Continent via Zeebrugge. Walon vehicles will be first choice to final distribution centres in Belgium, Switzerland and Austria. With a network of 85 depots and 1,700 transporters throughout Europe Walon's strength is substantial, but other transporter suppliers will also be used in supporting roles as required.
Walon UK sales and marketing manager Gerard Barclay believes that the award of the contract is evidence of a long-term trend in the way vehicle manufacturers will use the main car delivery specialists in future. A shuffle of the line-up among the opposition appears to give this idea more weight: "I think you are seeing a rationalisation of car delivery suppliers with first, second and third-tier suppliers coming into the equation," he says. "I think the vehicle manufacturers will only feel comfortable giving large volumes of business to first-tier suppliers which can provide a consistent high quality and a panEuropean service."
Vehicle manu facturers and importers have traditionally employed several car delivery operators, sometimes on a regional basis. If Barclay is correct fewer operators will win the larger contracts that generate enough revenue to invest in the equipment and services needed to develop the facilities that might be demanded by importers/exporters of vehicles.
Because Walon already delivers Rover cars from distribution centres to dealers in France and the Netherlands, it could already claim to be delivering the product from the factory in the UK to the international point of sale.
Walon, which has also played its part in the recent re-shuffling game (it acquired the Autocar transporter business from Inchcapeowned Seaking about 18 months ago), could certainly count itself among the early founders of premier league of car delivery operators.
In the UK its car delivery activities range from large contracts with the likes of Toyota to smaller deals with Proton and Chrysler. In terms of size it is the second largest delivery player in the UK with around 300 transporters. While ahead of Richard Lawson, it is behind Axial a new name which disguises a-wealth of experience. Axial runs about 450 vehicles.
The new name became possible after the conclusion of a sole-supplier agreement with Ford. Toleman previously had contracts out of Liverpool, while Silcock operated out of Dagenham.
While Fordslecides the mode of transport, Axial managing director Steve Keeling says his company's contract is becoming more logistically minded: "Previously they would have simply bought shipping for imports," he says. "Now we get into the debate about the options which are available to Ford, with regard to mileage and the entry points into the Import site In scaling down its use of Harwich as an import site in favour of its own quay on the Thames at Dagenham, Ford has asked Axial to make some changes.
Axial already runs trainloads of vehicles by rail for Ford between Dagenham and Liverpool, and sometimes to Scotland— evidence of its ability to offer a full logistical service to customers who also include Nissan and Renault. Keeling believes the market will change as manufacturers and importers look increasingly for a one-stop-shop: "I think you will end up with two categories," he says. "A category where a customer can buy a wider service, whether that is systems support, logistics packages or where the major party uses others as partners. Then you will have the smaller car delivery companies which won't have the same level of investment in infrastructure, overheads and all the rest of it where the customer will just want to buy on price."
This will no doubt include the spot-hire market—used car fleet returns and auction deliveries as well as seasonal peaks for the pre-1 August build-up.
Other players such as MCD, Auto Carriers, and ECM (which has recently taken on new business for VAG after a further port change) will no doubt present their cases for membership of the top flight.
However, Axial, Walon and Richard' Lawson will be among those with the first official invitations. While the Mercedes move from Harwich to Purfleet will involve amendments to the current Richard Lawson game-plan, it is well placed to develop services for customers (which include Vauxhall, Nissan and VAG) through its own Nordic shipping connections.
Among major players to watch is Sheertruck, which acquired around 50 car transporters with the purchase of the NFC car business by its parent John I Jacobs. This gave it the capacity to compete for the contract to deliver 15,000 Hyundais which began earlier this month.
That contract slipped through Walon's hands after franchise holder Inchcape switched ports to Sheerness from Portbury in Bristol.
Sheertruck, which counts Volvo, Honda and Land Rover among its customers, is the UK agent for European consortium TTC. It also has a substantial car importing facility at Dartford, and managing director Cohn Parry-Williams expects significant new arrivals by 1996.
C by Steve McQueen