20


Issue 2 2013


///NORTH WEST Troubled container haulier goes back to its roots


These haven’t been the easiest times for Elite Transport Services. The Manchester- headquartered


container


haulier entered a Company Voluntary Agreement – the UK equivalent of Chapter 11 - in mid- February and has arranged with its creditors to pay 37p per £1 of


its debts over the next five years. Prior to that, at Christmas, it shut its port depots at Southampton, Felixstowe and Thamesport to concentrate at its core, profitable business of hauling shipping containers to and from the railheads at Manchester, Birmingham and Leeds. It has


also cut its fleet by around a third to 105 tractor units and 175 container trailers. Elite was profitable until late 2008, when the recession hit it hard – and fast. “We actually made our best ever profit in 2008; since then we’ve been bumping along the bottom,”


states Elite chairman, Gary Bethel. An acquisition of another haulier, including liabilities as well as existing business, turned sour, especially as it also committed Elite to fleet expansion and also made it harder to serve some of its existing business. A deal with a


Advanced Supply Chain Management and Logistics for Cargo Owners


global logistics company also failed to work out, while further business taken on turned out to involve a lot of empty running - all factors that can push a company over the edge in this very cut-throat sector of the haulage market. “It doesn’t need much to go wrong,” says Gary Bethel, who describes the CVA as the honourable solution to its problems. (The alternative would be to shut the company down, in which case the creditors would have got nothing.) It has though been a uniquely painful experience; many good people have had to be let go. The problems that Elite


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faced are symptomatic of the wider problems that suppliers to the container lines face, says Gary Bethel. “Ships are getting bigger and the time between them is getting longer, but delivery windows are still the same.” Shipping lines can also easily move their vessels around and with the opening of the new London Gateway port late this year, the whole industry is be coming fraught with uncertainty. Also, with the opening of the gauge-cleared route from Southampton the Manchester, a whole raſt of container haulage business there disappeared virtually overnight. Far better, Gary Bethel


reasoned, to serve the same customers to and from the Euroterminal rail hub in Manchester – just down the road from Elite’s base in the city. Haulage to and from rail hubs is a much shorter-distance, more localised affair, so it is much easier to respond to ups and down in the market. Rail business tends also to be much more predictable than


shipping with its short notice cancellation of sailings.


On


shorter hauls, delays caused by road congestion do not get out of hand so much – recovery from delays is quicker and easier. The problem for the hauliers,


Mr Bethel continues, is that the shipping lines regard them as a taxi service, always ready and waiting, regardless of peaks and troughs: “There’s no supply and demand pricing in this business – we are stuck with a fixed tariff for a whole year.” The danger for the shipping industry though is that the tap will day get turned off as more hauliers abandon the sector either


through


bankruptcy or disillusionment. This year will naturally be


a year of consolidation as it regroups following the CVA. In many respects, it is in a good shape to meet the challenges of the future. The fleet is reasonably new and with its new localised business model, it is in a position to offer value- added services like container storage or, possibly, setting up a fuel sales point. There is plenty of space at Elite’s six-acre site on the Trafford Park industrial estate. Elite isn’t


turning its back


on ports – it would consider setting up similar operations to its rail facility at the new Irlam container port on the Manchester Ship Canal, for example. The issue though, and it is also true of Peel Ports’ Liverpool 2 container terminal down the road, is whether there would be enough regular activity to justify basing vehicles there. At current haulage rates, this can only be viable if there is a steady flow of work, every day, says Gary Bethel. “The problem is the days when there is no work.”


Neon shines bright in Cheshire


Lead sponsors include


Cheshire has a new forwarding company. Neon Freight was set up by Ian Mallon in Holmes Chapel last November, offering worldwide multimodal


freight NEC Birmingham • 23-25 April 2013 Visit FBJ on stand 906 www.multimodal.org.uk/fbj services to


all parts of the world. Mr Mallon, a 17-year veteran of the industry, started work on leaving school at Trident International and has


also worked at Cardinal Maritime and Knustsford-based X-Pand International. There is good potential in the region for freight forwarders, he considers. “There is a lot of business in the area as companies are moving out of the big town centres – and many prefer to deal with smaller companies.”


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