30


Issue 2 2013


Johnston refocuses and hits new highs


A fundamental rethink was required at Johnston Logistics when Ireland’s economy fell apart. The company had a near-€15 million turnover in 2007 but this collapsed to less than €11 million inside two years. Johnston was making a gradual transition from traditional domestic haulier to pan-European transport company and supply chain management services provider, but was still too dependent on low-margin construction products and chemicals. “Everything went under the


magnifying glass. We knew we had to get into higher-value business,” says sales manager Niall Hickey. The roll call of international brands Johnston represents today, including Honeywell, Honda, Liebherr and DeLaval, suggests it has succeeded. Bostik joined the list in January, awarding Johnston a major contract that the whole market was bidding for. A six-year partnership with


Dachser, Europe’s fiſth largest groupage operator, has made a major contribution. Dachser has


highly sophisticated order capture, pick-and-pack and transport management soſtware across its entire network, and requires its partners to integrate into this. The results are self-evident: Hickey doubts whether any competitor can match Johnston’s 99.6% on- time accurate despatch rate. IT development in transport,


warehousing, European freight forwarding and document management accelerated with Johnston’s roll-out of hand-held devices for all drivers, the move to paperless delivery in its express parcels division, a new website and new customer portal with online booking of jobs. The investment went wider IT, however.


than Johnston’s


family owners also brought in new vehicles during the downturn, commissioning a special, compact design of double-deck trailer, just 4.6 metres tall, to fit into the Dublin Port Tunnel. Johnston offers daily


connections to the UK and Europe as standard, in contrast to the approach of most Irish


Johnston Logistics has capacity for 13,000 pallets at Rathcoole


A new design of double-deck trailer (right) measures just 4.6 metres tall


operators who offer Tuesday and Friday departures with daily as a premium service. As of last summer, this has


been done by feeding Dachser’s northern UK hub in Rochdale - Johnston typically sends three double-deckers across each night and piggybacks onto the group’s European services. This has proved more efficient than going direct to Dachser’s other UK hubs in Northampton and Dartford or to its main north European consolidation hub in Cologne. Inbound services to Ireland


still operate from Cologne and Northampton as well as Rochdale, improving door-to-door transit times. Dachser moves seven nightly trailer loads of its own across the Irish Sea. But despite bouncing back


to achieve record turnover of €15.2 million in 2012, Johnston is having to run hard to stand still. “In 2007 we did 200,000 jobs. Last year it was 247,000 jobs for almost the same turnover. Customers order less but more frequently, so they’re not tying up their own warehousing,” Hickey says. “The main conversation with customers in the last several years has been about cost reduction, not price increases - despite our higher fuel costs.” Johnston covers almost all of


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Ireland on a 24-hour groupage basis. However, revenue from its domestic transport business is flat. European transport is still on the up, but most significantly, warehousing and logistics business has doubled in three years. The


company has 13,000


pallets of warehousing space at its headquarters in Rathcoole, west of Dublin, including a heated facility where everything from temperature-sensitive adhesives and high-grade printing paper are stored at 22 degrees C. The warehousing - ambient, heated and one dedicated to hazardous goods - generates 30% of the transport department’s daily work as orders are picked, packed and made ready for despatch. Johnston is focused on


providing value-added services such as on-site stock replenishment for pharmaceutical clients, right down to cabinet level. A more unusual example is customised tinting and mixing of paints and coatings, which it has trained three of its warehouse personnel to do as required. In February, Johnston brought


to market another value-add: a service by which clients can transfer their delivery note file to Johnston’s IT system and have their detailed delivery notes printed, carrying information on product code, description, pack size and so on, and branded with their own logo. “It’s unique in Ireland; no one


else offers this. Standard transport or warehouse soſtware systems cannot do it,” Hickey says. “We developed it for a domestic customer who had a cumbersome manual process in which he was taking an hour and a half a day to sort out his delivery notes and print them on a dot matrix printer. He’s delighted to have saved time, eliminated his print costs, and improved the content and appearance of his delivery notes.”


///IRELAND


Irish truckers win respite on fuel duty


Irish hauliers may have their concerns over cabotage (see front page) but there was welcome news for them in Ireland’s December budget. Finance minister Michael Noonan announced that an essential-user rebate will be paid to all licensed hauliers driving vehicles over 7.5 tonnes who fill up in the Irish Republic. The rebate of 7.5 euro cents per litre - worth €3,000 per truck over a year, IRHA president Eoin Gavin says - does not apply to own-account businesses, but operators from Northern Ireland and the UK mainland are able to sign up. “This initiative will be strictly


policed so as to ensure that the beneficiaries are fully tax compliant,” Noonan said, in reference not only to unlicensed operators, but also those who rely on “dirty” fuel - fuel intended for off-road use but with the dye


removed by criminal elements and resold on the open market. The Irish government’s rationale for introducing the rebate is that, by making legal diesel cheaper, there is less temptation for drivers to use dirty fuel. Then unprecedented


decision to apply a rebate during Ireland’s worst economic crisis of recent times was a tribute to the IRHA’s persistent lobbying effort, said Seamus McGowan, managing director of The Pallet Network Ireland, which numbers Co Clare-based Eoin Gavin Transport among its 24 members. “The rebate will be significant


to our members. Gavin took every opportunity to meet with ministers,” McGowan commented aſter


the budget.


“He spent two years going round the country, visiting politicians of all parties to explain the plight of the industry.”


Pharma helps heal Aer Lingus yields


Cargo revenue at Aer Lingus increased by 6.3% last year to reach €45.7 million. Tonnage was up by only 1.8%, but the carrier achieved a welcome 4.4% increase in yield. Director of cargo Peter O’Neill


is encouraged by the upward trend, especially on long-haul transatlantic services, aſter a slow start to 2012. “Ex-Ireland traffic going west is fine, though it’s a struggle generating eastbound cargo,” he says. A seventh A330 becomes in


available April when


a codeshare agreement with United Airlines on a Washington-Madrid


route


terminates. Four more weekly Dublin-Chicago services will be added, increasing to 11 - happily, Chicago is Aer Lingus’s best destination for cargo - while Boston flights will go double- daily. Aer Lingus faces an intense


battle to maintain that yield improvement, however. CEO Christoph Mueller warned in his annual statement that although the carrier’s market share from


Dublin and Shannon to the US increased last year from 49% to 53%, “several other carriers” were adding capacity. Mueller had in mind


American Airlines’ increase from B757s to 767s, a similar upgrade by Delta between Dublin and JFK, and a new United Airlines service from Shannon to Washington. O’Neill admits: “Carriers


offering summer-only capacity will take whatever they can get, at a lower time of year for cargo volumes, so new seasonal services definitely put pressure on margin.” Aer Lingus Cargo is continuing


to build its presence in the high- yielding pharmaceutical sector. “Customers “want to minimise the touch points,” O’Neill says. “We’ve had cases where


people did trial shipments over London, then in a couple of weeks came back to us. They have to go through that process of trying to take costs out of their own operations, as we have with ours, but these are not changes you can make lightly.”


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