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From riding motorcyles to setting up his own business, Mainland Group's creator has overcome many business hurdles and has raced his way through to the top. CM met up with the MD to find out the secret to his success in transport.
Words: Domintc Perry Images: Nigel Spreadbury There's quite a leap to be made from riding a motorcycle in circles for a living to running a successful express transport company. but it's one that Mike Bacon, MD at Northampton firm Mainland Group, has performed successfully.
Bacon started his career in transport, sort of competing on the motorcycle speedway circuit where he was sponsored by a Banbury-based motorcycle courier firm. After starting out in a sales role for the company. Bacon decided that he could do a better job himself and set up on his own as Mainland Express. Eventually he moved up the weight range, joining the Last Post overnight network. As Bacon explains:"We started out trunking with a [Leyland] Sherpa van, and now we have 58 commercials from 44-tonners down to [Ivcco] Dailys."
The shift from courier to haulage was started by the 1991 acquisition of MK Private Hire, which ran a light haulage operation. The subtle change of direction also prompted Mainland to switch networks to Hellmann, although as palletised consignments grew, this led to another A Mainland's MOs switch, this time to Pall-Ex (shortly before Hellmann closed Sean Meagher (leftl and its domestic parcel business). It also marked the end of Mike Bacon (right I parcel activity at the compan), adds Bacon.
He believes that the firm has stayed true to its courier roots.: "We pride ourselves in being flexible and quick to adapt to customers' needs." Rather than spreading across the weight range. Mainland concentrates on lighter vehicles: the majority of its vehicle fleet are 7.5-tonners or 18-tonners with a smattering of 3.5-tonne vans and artics for trunking.
"It's what we know, and the margins are better too," Bacon explains. "To be a full-load operator is a different market. That's not what we do."
One of its key competences is what Bacon describes as "fairy drops"overnight store deliveries in the retail sector where the goods are dropped, unpacked and otherwise prepared, ready for the store's employees to start work in the morning. "That's what we are good at," he says.
Customer service is a subject that our conversation keeps returning to Bacon passionately believes this is an area that Mainland excels at. It introduced a customer service department two years ago and currently boasts a customer retention rate of around 90%, and Bacon is sure the two facts are linked.
He adds: "Customer turnover is tiny unless someone goes bust or they move away. To lose to another transport company is rare. Even smaller is the number we lose on service. We pride ourselves on customer service, and really concentrate on that."
Quality comes first
He adds: "I have always said we needed to be a quality organisation; even from day one it was always about quality. That eventually leads you to the better contracts."
Equally, the work it is currently doing allows it to showcase its talents, demonstrating to potential customers what it can do.
"We can show people what we are doing for other customers, and therefore it's easier to gain the extra work," says Bacon. "We are not about delivering bulk loads to warehouses. Our speciality is going in and being nice to the lady in the store."
Of course. being exposed to the retail sector during the worst of the recession (assuming that the worst is now behind us) did create its own set of problems. Bacon describes the "painful timefrom December 2008 to May 2009 where Mainland saw "a very quick erosionof its business early in that period. Bacon adds: "We knew there would be a slowdown, but the speed of the decline took everyone by surprise. We dropped by almost 30% in the space of five weeks." Business has returned since then, but prudent management, and a sound financial base ("we have a little bit of wool on our backs," says Bacon) helped guide the company through the worst of it.
Some customers were pressuring the company on price, but still wanting the same level of service. Bacon stresses that it had to be unyielding about saying 'no' unless there was an agreement for more work or margin increases at a later date. He adds:"If that was the case. then we'd sit down and talk to them and try to come to an amicable agreement. If anyone was reckless enough to say 'take 15% of cost out', we'd just tell them no."
He believes high service levels prevented some of these discussions ever taking place: "If you are showing 99.9% delivery on time and invoice correctly. then customers won't move for a quid or two." Cost control was also vital, he says. "We took out anything that was unnecessaly. We are well-managed; if you know your business, it is easy to make those changes," he explains.
Any unnecessary expenditure was cut, with Bacon authorising any spending over £500. Fleet replacement was also postponed, although that has subsequently been relaxed with several units arriving this year.
European operation is another of Mainland's competencies, through sister firm Eurocontinental Logistics. The company was acquired in late 2005: "That's when we really started concentrating on the worldwide business," says Bacon.
Eurocontinental specialises in groupage to the Benelux region, but also has capabilities in air and sea freight.This means Mainland Group customers, who bring in goods from the Far East or Europe, benefit from a single point of contact for their supply delivery. "It's a really good selling point for us," he adds.
A comprehensive distribution network "it had the expertise already there, but what it didn't have was a UK distribution network," he adds. Previously goods would come in, were stored at Eurocontinentars Wellingborough site and the delivery of the product was subbed out. However, the operation was consolidated to Mainland Group's 40.000ft2, Northampton depot in 2007, and although final delivery is still subcontracted — Mainland Group is the subbie.
Speaking of subcontracting. Bacon is more than happy for Mainland Group to work with its big logistics rivals, picking up the work that doesn't fit for them, He adds: "But the only way you can be successful at that is to have a similar ethos to [the big logistics companies]. You have to think like a big company, you have to have the IT infrastructure, you have to have the KPIs in place and the customer service department — all the things that they, or their customers, expect. You can't think like a small haulier or transport operator."
For the future, Bacon says he wants to concentrate on profitable growth, preferably organic, of around 25% over the next three years.
But he says: "We'd happily see much higher growth if we find the right acquisition.
"We'd say we are hungry for that." •