Nightfreight - The Interview
Operating 21st Century Networks
Nightfreight's Chief Executive Officer Steve Allen started his career in finance, before moving into the logistics industry, where he has over 20 years' experience. He has held senior roles within Exel, DHL and Securicor spanning operations, finance and business development. Steve joined Nightfreight as CEO in 2006.
Nightfreight is a specialist delivery business with a well-established national distribution network capable of handling items of all weights and dimensions. The company currently employs over 2,400 staff at over 70 operating sites around the United Kingdom, and operates in excess of 1,000 vehicles. Last year it successfully delivered more than 18 million items.
A core Nightfreight service is the delivery of items of irregular dimension and weight (IDW.) Outsize and unusual items delivered in 2006 include lamp posts, the Queen's Christmas tree to Buckingham Palace, tractor tyres, dune buggies and over 50,000 trampolines to homes in every part of the UK.
Nightfreight delivers its services through its three product streams: Express Freight through the IDW network; home delivery through its Deliver2Home and Pacemaker operations; and dedicated distribution through its Contract Logistics Division.
Earlier this year Nightfreight announced its financial results for 2006. The company's financial performance has improved in turnover by £8.4m (6.83%) and operating profit by £3.1m (250%), demonstrating the benefits of Nightfreight's ongoing investment programme in customer service and operational developments, which continues to radically improve the business.
 WLN caught up with Steve Allen before the Triangle Conference, to get his views on the future of the industry.
Warehouse & Logistics News - Steve, what are the key factors affecting networks in the 21st Century?
The 21st Century is no different from any other era, in that the customer continues to be king! As always customers are looking for carriers to continuously improve their services and their prices. In addition we are seeing increased government and EU intervention, which is inevitably driving cost into business.
WLN - How important is home delivery in the 21st Century?
It's massively important! Everyone talked about the dotcom revolution eight years ago but it is actually happening now, with the increase of home computers and broadband in almost every home. With that we have seen Internet shopping really take off, and this has significant implications for everyone in the supply chain. Conventional supply chains are being forced to bend and fragment as retailers continue to develop their e-commerce offering to the consumer.
WLN - Do you feel carriers are being increasingly affected by legislation?
There has been a continual flow of legislation, from the Working Time Directive to road charging and congestion charging. These changes are placing a burden on the road transport industry, which is inevitably flowing through as increased cost.
WLN - What about increasing environmental pressures and EU expansion - will these factors help or hinder the industry, moving forward?
Environmental considerations will potentially have the greatest impact on our industry. The talk today is all about carbon footprints, but environmental issues like noise and dust pollution have been around for some time. The key question in this area concerns national governments' ability to ensure that any future regulations are applied on a consistent basis from city to city, on a pan-European and global basis.
WLN - So how can carriers ensure they run successful networks throughout the next century and beyond?
We have to manage those areas that are within our control. These are customers, technology and information, people, processes and utilisation. Let's start with utilisation. In simple terms, the more a network provider can maximise the use of his assets, the more efficient and profitable he should be. At Nightfreight we do this effectively by working over two different time periods, which enables us to utilise our assets for as close to 24 hours as possible. We utilise our vehicles, people and infrastructure overnight to send express freight nationwide. During the day we utilise the same resources for our home delivery service. In effect, our hub and trunking network operate 24 hours a day. At the collection and delivery depot the home delivery consignment is put onto a dedicated Deliver2Home vehicle with a crew skilled in delivering into a consumer's home.
We've already touched on the increasing expectations of customers, and their desire to control prices. Carriers are often operating on very tight margins, and therefore have to look at ways of adding value to their services. In the home delivery arena this might mean offering furniture assembly or washing machine installation. More generally, it might mean offering deliveries in the evening or at weekends. In addition there is a steady pressure from the consumer to move towards timed deliveries.
If this is done well, the creation of added value services can help both the customer and the carrier to differentiate themselves from their competitors. In my experience this is most successful when both sides view their relationship as a partnership with agreed common goals.
WLN - You mentioned technology and information. Isn't this a given?
Absolutely not! This area is moving so quickly that the latest technologies can be a vital enabler in allowing a business to improve service and efficiency and provide important management information to customers in a timely and efficient manner. EDI and web-based customer interfaces are now vital for fast data interchange as are track and trace across the business, along with electronic POD. This enables carriers to develop 'exception reporting,' allowing them to be proactive rather than reactive.
At Nightfreight this is an area we are investing in for the future. We have admittedly been slightly behind some of our competitors in joining the technology revolution, but the delay has led to some benefits. For example we are now able to invest in proven leading edge technology, which will do exactly what we need it to do, rather than trying to adapt or develop new technologies.
The prototype for our Track and Trace project has been run at our Cheshire depot, where we have implemented 100% scanning from collection through to delivery. The trial involved 25 hand-held devices, which are used by all the drivers. The hand-held unit provides two-way communication from the traffic office to the driver. It lists all the deliveries and collections on the driver's round, updating automatically with new collections. Customers sign the hand- held device for receipt of the goods, and this automatically updates the in- house system, NightTrak, and provides a hard copy POD. The hand-held unit also incorporates a scanner to scan in collections and a camera to record evidence of failed or damaged deliveries.
Within the depots, our Track and Trace program has introduced wearable scanners into the operation. Worn by each warehouse staff member, the wearable scanner is a lightweight device which attaches to your arm or your belt, with a scanner on your finger. This allows Nightfreight to scan at each point in a consignment's life and complete the Track and Trace trail.
We are also installing satellite navigation in all our vehicles, to navigate to the next delivery/collection point.
WLN - Are people as important as technology?
No, they are more important. Our challenge in the 21st Century is getting the right people because they, more than any other single aspect of the business, are the key to a successful operation.
Looking forward carriers need to be certain that they have the right people for the right kind of service. For example, a home delivery driver who goes into someone's home to fit a washing machine needs different skills to a driver working in the B2B market.
At Nightfreight we have recognised how important the driver interface with the customer is, and have recently put together a 'back to basics' campaign. This campaign is designed to raise drivers' awareness of their obligations to deliver excellent customer service, present the correct image, show courtesy and ensure their vehicle is clean and well loaded. The campaign has been kick started by depot managers and will run for three months, with posters, brochures and competitions for drivers to enter and win prizes. In addition our Deliver2Home service drivers undergo a personality profiling process, to ensure drivers who interface with the consumer have the right skills and attitude.
At Nightfreight we try to keep the role requirements simple and clear, as we believe drivers have enough to contend with in dealing with issues such as congestion. We openly use migrant workers, and treat them as integrated members of the team. Whilst all our employees need good English language skills we also communicate with them in their native tongues where possible, as a matter of courtesy. For example, our staff newsletter is printed in three languages - English, Polish and Kurdish.
WLN - Anything to add, in summary?
The future of our industry is being shaped by the growing demands from customers and the increasing legislative and environmental requirements.
Carriers need to be prepared to take on the complex challenges that the next century might bring. As mentioned in the introduction, at Nightfreight we have embarked upon an on-going multi-million pound investment programme in customer service and operational developments, which has continued to radically improve the business.
The programme includes new vehicles, new sites, new technology and new working practices, all designed to enhance the customer experience. We have also started to offer customers new and innovative services, which will hopefully meet their changing requirements.
By investing in the future and making better use of people, technology and our assets, we can improve customer service whilst improving returns on our investments. That is the secret of operating successful 21st Century networks.
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For further information about this company's activities in the warehouse and logistics industry please contact:
Nightfreight
Tel: 01902 604000
www.nightfreight.co.uk |
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