PHS Teacrate - The Interview
Top for crate rental and returnable packaging
PHS Teacrate is the UK's largest crate rental company, moving 20 million hired crates annually. It strengthened its lead by buying four rival companies in the last year, Chartercrate, Intercrate, Quickcrates and its nearest rival Rentacrate. And it doesn't stop there. Through its Packaging division PHS Teacrate supplies a wide range of cardboard cartons, bubble wrap, plastic crates, packing paper, tape, quilted covers and handling equipment. Its Returnable Transfer Packaging (RTP) solutions for food and retail cover a wide range of products - crates, trays, boxes and pallet boxes, supported with company logo branding, Seasonal dynamic pooling, a hygienic wash service and RTP asset tracking. Warehouse & Logistics News went to Scrubs Lane, Northwest London, to meet David Wicks, MD of PHS Teacrate.
 Warehouse & Logistics News - What share of UK crate rentals do you now have?
We have £15m of a £20m market. Being big gives us the infrastructure and logistics to service customers to the maximum. We have 13 UK depots, and are never far from a customer.
WLN - How much bigger are you than the nearest rival?
Our nearest nationwide rival has £2m turnover. There's a London-based company with a £1.5m turnover and various regional operators.
WLN - Is big always beautiful when it comes to customer service?
That's up to the company. When you're small, you can be more personal; we started small, and as we've grown we've relied on our staff to build day to day client relationships, and that's still the case.
WLN - Where does the name Teacrate come from?
The name was derived from the old fashioned tea chests, which were the popular methods of moving items many years ago. Two brothers, Kenneth and Neil McGrigor started the business in 1992, just them and a van, and sold it to PHS Group in 2002.
WLN - Who owns PHS Teacrate?
PHS Group still owns it. They're a £250m company, best known for washroom services. Their other businesses include mats and matting (Treadsmart), plants (Greenleaf), water machines (Waterlogic) and document shredding (Datashred.) At £15m we're a smaller division than the others but catching up.
WLN - When did you come into the business?
I joined PHS in 2002 as Waterlogic's National Sales Manager, becoming Teacrate Sales Director in June 2004 and MD in 2005.
WLN - What is your day-to-day role?
I look after business strategy, including business plans and acquisitions, but I like to keep my hand in with customers, which means I get out and about to see them as often as I can.
PHS helps from the centre with marketing and payroll, and with financial muscle when required, but otherwise Teacrate is run like an independent company. I write the cheques and make the decisions, so in that sense it's like the old Teacrate, with the brothers running it.
WLN - Is there anyone left from that time?
Yes, several members of our current senior management have worked their way up. Systems & Admin Director Gurpreet Metharu started on the admin desk; Alan Thomas, Operations Director, began in scheduling; Nick Burke, Commercial Director, joined after we bought TIR Crate Rentals, which his father owned. It's central to our culture and ethos that our senior management have worked their way through, and can do most tasks.
WLN - We're talking in your London HQ. What happens here?
Scrubs Lane is both our HQ and our West London depot, covering the M25 and into the City, plus Southeast England. Payroll, accounts and credit control are here. It's the front line of the business and the engine room.
 WLN - How are your operations organised elsewhere?
We have an operation in Surrey Quays, covering the City plus Kent and Essex, and a third London depot in Barking. Our other depots are in Didcot, Bristol, two in Birmingham, two in Manchester, plus Leeds, Sunderland, and two in Scotland, in Livingston and Shotts, Glasgow. We've reached this many depots as a result of our acquisitions.
WLN - Will you be closing any depots, in the process of integrating these businesses?
We'll be streamlining them to nine by next summer. The depots due to merge are generally close together; most staff will migrate to the remaining depot in that location.
WLN - Talking of acquisitions, how did you come to buy four companies in such a short period?
Well, if you look at the PHS Group's phenomenal growth in recent years, this success has very much been as a result of their strong acquisition policy, combined with organic growth, through all its divisions. It's now PHS Teacrate's turn to benefit from this Group acquisition pot. We dipped our toes in the water first with Chartercrate and then Intercrate. We then bought our biggest rival Rentacrate on 12 July this year, a major acquisition, both financially and strategically, and finally we bought Quickcrates.
WLN - What's happened to these companies' management teams?
Intercrate and Chartercrate were family-owned and the management went to pastures new. Rentacrate and Quickcrates were much bigger; most of the staff and middle management are still in the business, but Quickcrate's MD and Rentacrate's directors have gone.
WLN - Are you planning more acquisitions?
Quite possibly! We look at opportunities as they arise, so we may develop further into food and retail or the packaging arena. For the time being though, it would be nice to take a breather after the roller coaster ride of the recent acquisitions.
WLN - Should other crate rental companies be nervous, or is your strategy good for the industry?
Competition is healthy: we don't want to dominate, but having said that, we think our strategy is good because it's allowed us to set a benchmark of standards for the industry. For example, with more vans, crate stock and branches we are able to truly offer a next day delivery service as standard and our investment in a new crate washing facility means customers will get clean crates every time. That's the standard all customers should now expect from the industry.
WLN - What crate and tray products do you rent out?
For the removals market, we supply standard lidded crates in various sizes plus computer crates. For food and retail we supply food trays, bakers' trays and produce boxes, all backed by a washing service, plus retail totes and roll cages.
Removals crates go out for one or two weeks. In food and retail they either go out for years or come back regularly on a wash cycle.
WLN - What do you charge?
A single crate costs around the price of a Mars Bar to hire for a week, but most customers hire large numbers. Unit prices are broadly similar for food and removals but depend on the size and type of crate and the solutions customers want.
WLN - When are the peak times of year for crate rental?
Summer is the busiest time in removals, from Easter to late September; the food and retail peaks are Christmas to Easter. The two businesses fit in well; the summer peak in crate rentals means our depots are emptier then, allowing increased stocks on food and retail, and packaging.
WLN - Do you hire to non-UK customers?
No, but we have substantial export sales to the US, Europe, Australia and Middle East. Our rental trade is UK-based; we have partners in Europe, principally Roldorent, whom we supply with our products.
WLN - Can people hire on line?
Yes, they can use our unique system Cratelink. Go to www.teacrate.com. We're also about to launch Packaging Online, a complete on-line shop for domestic and commercial customers.
WLN - Is the on-line side growing?
Yes it is. Cratelink is a significant part of our business; 20% of our orders are on-line. We've also launched a new domestic crate hire service, giving next day delivery to mainland UK. We offer from one crate upwards. We deliver and collect, or customers collect from our depots between 7am-6pm.
WLN - How quickly can you deliver rental crates etc?
Orders before 5pm are delivered next day. Packaging products are similar but cut off is 3pm. Again, we supply from one crate upwards but orders tend to be 10-20 or tens of thousands.
WLN - What kind and size of companies are your customers?
We trade with most removals companies. On retail and food, we supply companies like JJB Sports and Waitrose at one end, and small distributors with two vehicles at the other.
WLN - Do you offer different coloured crates and trays so they can be distinguished from the customer's own? What about branding in customer colours and logos?
Yes, we can supply either a selection of products in different colours or products branded in the customer's name and corporate colours, with their contact details.
WLN - How long does it take to supply personalised crates?
Customer-branded crates take four to six weeks to manufacture. Once we receive them they're available next day, nationwide. Non-branded crates are available next day.
WLN - Crates etc are valuable and need to be tracked. Are your crates and trays bar coded or RF-tagged?
In the removals market, there's virtually no product tagging: we supply manual delivery and collection notes, and the numbers of crates are balanced. If a customer wanted tagging we could supply it.
We offer tracking in food and retail, where it's more common. Our system PINPOINT is a 2D matrix, with crates marked individually and at pallet level.
WLN - What are your billing arrangements?
We're flexible: we can invoice every four weeks or on collection, to any billing point.
WLN - In food and retailing what do you offer in Returnable Transfer Packaging (RTP) trays, pallets and boxes?
All those and more! Our Dynamic Poolingª service lets client hire for example, 20,000 trays most of the year, increasing to 30,000 at the peak. We store and deliver the balance at peak times, with no storage charge when the extra trays are not in use. As our food and retail business develops we see this growing.
WLN - What washing services do you offer?
We wash over 100,000 trays per week for UK food and retail companies across Britain. All our sites are quality-controlled: we offer bio-protection services as required, and are investing £250,000 in a new state of the art washer for our Birmingham depot. Clean crates are segregated, sterilised and delivered shrink-wrapped to clients from turkey farmers to bakers.
WLN - What services do you offer the removals industry?
The removals industry is 80% of our turnover. We offer a complete range of products as a one-stop shop. The PHS Teacrate delivery person is the first and last person their customer sees: impressions count.
WLN - What removals-related products do you offer?
We offer crates, dollies and packaging products in a complete service - everything to complete the job except the men and the van.
We generally supply crates and packaging materials to the end customer via the removal company. We avoid dealing directly with their customers, and as a policy if they contact us we refer them back to the removal company.
WLN - Do you manufacture these crates and other packaging items yourselves?
We own the tooling for the crates, but have outsourced production to other manufacturers. Everything else is bought in: we have links with packaging and film companies, but again make nothing ourselves.
WLN - Are these crates recyclable?
All our crates are fully recyclable, and always have been. We're currently recycling crates made 10-15 years back.
WLN - What trade associations do you belong to?
We're members of the British Association of Removals (BAR.) We're big supporters, and attend regular meetings and their annual conferences. We have various accreditations: we work to British Standards; our products have the CE mark; we're Investors in People; and accredited to ISO9001.
WLN - What external factors do you see affecting your business, moving forwards?
The removal market has been static or declining since 2002, depending who you ask. The removals companies say the new Home Information Packs (HIPs) will have a negative effect, but this hasn't materialised yet. As mentioned, our turnover is 15% up on last year.
The price of oil affects us in various ways. Raw material prices have gone through the roof. There was a 40% increase in oil prices last year, but in our rental business we're absorbing that as far as we can. With 70 vehicles on the road, pump prices also affect us directly.
The major change in London is the Congestion charge and the number of parking tickets we and the removals people receive. We'll be asking the BAR to do some lobbying for the industry.
WLN - What's your vision for the future?
We will continue to strive for excellence, while retaining a small company feel. Our ethos is to never say no to customers, and consistently achieve 98.9% of deliveries and collections on time.
With 75% share of the UK removal market our opportunities for further growth there are fairly limited, but the Packaging Division is set for substantial growth, as are our food and retail and washing services, driving our turnover beyond £20m by 2009, without losing the personal touch Teacrate's reputation was built on.
|
|
|
For further information about this company's activities in the warehouse and logistics industry please contact:
PHS Teacrate
Tel: 0800 980 7000
www.teacrate.com |
|
|
|
