Scotland's reputation as a nation of entrepreneurs and pioneers is not lost on Maxi Haulage. Not only does the operator pride itself on being in the right place at the right time, it's always had an eye for niche business. Established in Irvine in 1971, the company began transporting specialised freight throughout the UK, and between Britain and Ireland. The firm claims this was a new and untapped market five years ago. Now turning over £25m, the business has grown from one to six depots located throughout Scotland, England, Wales and Ireland and specialises in multi-user distribution services, contract haulage and warehousing, together with parts and commercial vehicle delivery.
Irish Sea
A key part of Maxi Haulage's business are its logistics operations across the Irish Sea. This has generated a £10m turnover in five years with return freight services to Ireland mushrooming on the back of general haulage activities. The firm now sends up to 600 trailers a week to Ireland. Managing director, Alan Miles, explains the reasons behind the company's growth: "We have completely remodelled the business over the past seven years. Originally, half of our business involved multi-user freight including palletised and 'ugly' goods. Our business now includes a higher ratio of ugly freight, such as rolls of flooring, cable drums and steel components."
He believes that remaining independent is a major factor influencing the firm's evolution. The operator has made a conscious decision to run and own everything in house where possible. This includes developing its own IT systems, owning its own property and selling on used trucks without a buy-back policy. Maxi Haulage makes no bones about revealing its financial performance. Its turnover has increased by £3m per annum. "We would like to reach £30m by the end of 2007," predicts Miles. "But there is a catch: turnover is not so important. What we want to do is widen our profit margins so we can shift up a gear and forge ahead."
Despite the Irish business helping to increase overall revenues by 65% in recent years, the new venture has not been without its difficulties. "Our greatest challenge with the new enterprise has been getting enough shipping space," Miles reveals. "Placing vehicles on the ferry from England to Ireland from Monday to Friday is an operation we've had to become skilled at." Effective communication and management of return freight on Irish trips is crucial, of course. Similarly, Maxi Haulage has the challenge of organising complementary traffic flows to and from the regions. The 600 trailers bound for Ireland each week have to be organised into time-sensitive and less urgent distribution channels. With most of the cargo being retail freight destined for the high street, products are delivered to locations throughout Ireland.
Diverse
Retail freight, along with the other diverse goods carried throughout the UK, is handled by a mainly Volvo fleet. The vehicle line up is split between 75 artics, 40 rigid vehicles and 30 7.5 tonners. The artics handle full load freight volumes. The multi-user and parts distribution side of the operation is carried out using the rigid vehicles and the 7.5 tonners. Using mainly Volvos rather than a greater mix of marques mirrors the company's ethos of service continuity. "Our reason for buying mainly from one manufacturer is based on the same principle as using strategic shipping companies," explains Miles.
"We like Volvo because they provide a good, reliable service. The same can be said for Norfolk Line and Stena Line. Playing the market might save X amount of pounds - but it can also lose money through inconsistent service." Far from simply offering an A to B haulage service, Maxi delivers complete end-to-end logistics, including web-based freight management and track and trace capability. Although the Irish business has provided the greatest catalyst for growth, freight operations in England and Wales have expanded on a similar scale. In addition to the Irvine headquarters, the firm has depots in Bellshill, Dublin, Manchester and two hubs in Warwick.
Delivering
From one of the Warwick hubs, the company sends out 35 vehicles at 2am, delivering parts to various dealers located throughout the UK by 8am. Successfully building the business has been down to four main factors, according to Miles. These are undercutting merged competitors, securing shipping space, specialising in niche freight and a strong emphasis on night time distribution. Miles adds: "Up to 75% of freight sent to Ireland is collected during the night and shipped during the day. This helps optimise delivery targets. We also supply flatbed trailers which have been a major growth." Another thriving part of the business is transporting new vehicle chassis around the country which are collected from Immingham docks.
Alongside transport services, Maxi Haulage has taken a strategic decision to provide end-to-end logistics services. This includes services for return packaging, yard management, together with updating customers' store records and order generation. Miles is proud to point out that all IT systems for transport and warehouse management are undertaken in house, and are fully compatible with different POD formats. The firm's IT systems can handle PODs varying from hard copy and scanned sheets sent via file transfer to hyperlinks on customers' websites. As part of maintaining service standards, the company has developed its own bespoke key performance indicators. A major one is calculating the optimum pence per kg not just for immediate customers - but for those down the supply chain.
Miles explains: "While some loads may cost 20p per kg to move, others may cost 2p or 40p. We have developed a sophisticated database which can calculate transport costs, according to customer location and type of freight." To ensure a lean and mean operation, the haulier mixes both its Irish and domestic traffic, bringing trailers back empty from Ireland, which are then loaded in North-west England. These loads are transported under the general haulage operation to points throughout the UK the company only ever runs empty trucks for an average of 20 miles. Handling such varied and high freight volumes inevitably requires a skilled and experienced workforce - Maxi Haulage employs 220 people, who are trained in-house by the company.
Tailored training of staff is an important prerequisite to help the firm reach stringent ISO targets for both quality and environmental standards. By anticipating environmental pressures exerted on customers across the supply chain, the company has adopted strategies to help reduce climate change. This includes investing in the latest fuel efficient vehicles and educating drivers about economical driving patterns. "Our insurance premiums have reduced by 30% over the past five years because we have met some rigorous quality assurance standards," explains Miles. "This has been achieved through advanced driver recruitment polices, together with careful training and monitoring procedures."
Investing in modern vehicles follows the firm's ethos of reducing overheads and delivering value for money services. New vehicles are ordered in batches of up to ten to replace older models and enlarge the fleet to cope with new contracts. Such is the anticipated level of business growth that another 20 vehicles will be purchased up front before the end of this year and throughout 2007. The company strengthens its bottom line by arranging its own truck finance, and selling vehicles without buyback privately. The 7.5 tonners are operated up to four years, with the artics run up to seven years.
Taking a bespoke approach to vehicle financing fits the firm's philosophy of managing everything in-house. By applying this principle to niche areas of business, Maxi Haulage claims to have carved out an innovative operation. The multi-user freight is carried throughout the UK and parts of Ireland, using 40 vehicles a day, which transport up to 280 tonnes. Such is the level of uptake for ugly traffic, that this now accounts for 80% of the firm's overall freight, with palletised goods comprising 20%.
Partnerships
Has the firm thought about partnerships to drive the business forwards, wonders MT? Miles' answer is concise: "The specialism of our parts distribution means we generally wouldn't use anything except our own vehicles. However, for the multi-user network we do have relationships with sub-contractors. These operators handle full loads across Ireland." Maxi Haulage adopts a 'never say never' mentality when it comes to continental freight contracts. For the company's parts distribution service, 85% of freight comes in from Europe before being transported throughout the UK.
But while European contracts might still be over the horizon, the future looks bright for the haulier's warehousing business. This is expected to expand considerably over the next few years from the company's Warwick hubs. The firm will endeavour to increase its warehousing space from the current 10,000sq m, and introduce value-added services, such as picking and packaging and stock control. Miles also intends to steer his ship full circle by winning more contracts into Scotland from England and Wales. By casting the contracting net wider, he aims to make the trunking route more lucrative by further exploiting the company's southern distribution hubs.
"Many hauliers are no longer interested in trunking the length of the UK due to cost pressures," he reasons. "Maxi Haulage already runs several trunks a night from Warwick up to Scotland on double-deckers. We're dead set on generating more business in Scotland. This is where our roots lie. It will be like visiting home again."
Maxi facts
- Base: Irvine, Scotland
- Established: 1971
- No. of employees: 220
- Turnover: £25m
- Main freight: Ugly freight, retail, parts and vehicles
- No of vehicles: 75 artics 40 rigids 30 7.5 tonners
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