In contrast to the RHA – which looked outside the organisation to the transport industry for its new CEO – the FTA appointed its former finance and operations director David Wells to replace CEO Theo de Pencier when he announced his departure earlier this year.
An engineer by profession, Wells does however early memories of logistics.
“I was born within a stone's throw of a really big Sainsbury's depot in North Hertfordshire,” he recalls. “This was a property built in the 1960s, and it was pretty big shed actually, even by today's standards. It has just recently been knocked down.”
After leaving school, Wells studied mechanical manufacturing engineering at Liverpool Polytechnic before working for engineering and oil group Hunting plc.
“I come from an engineering background,” he says. “My father was a toolmaker and then went into computing, which was in a fledgling industry in those days. Engineering was in my blood. I worked at Heysham 2 nuclear power station. You didn't have any choice, you went where the Poly sent you.
“Although I really enjoyed it, and it was a fantastic experience, that really convinced me that engineering wasn't for me.”
So after graduation, Wells got a job with an engineering firm – British Aerospace – but as a trainee accountant. He qualified as a management accountant in 1993 and joined medical products company SCA Mölnlycke.
Logistics experience
“That was where I really got my first serious experience of logistics. We distributed these products that we brought in from Belgium, Holland and Sweden,” he says. “We recruited a logistics manager and opened our own national distribution centre. We really drove the efficiency of the operation.
“We also started a home delivery system. We were contracted with the NHS to deliver the product to elderly people in their homes. We had 95,000 patients, and they were getting a delivery every 4 weeks. This was in the infancy really of the parcels businesses. We built our own network of couriers to do it.
“When I went there, it was £35m turnover, and in three and a half years it had grown to £70m. It was a fantastic place to work, very innovative and lots of creative business ideas.”
Wells went on to join another engineering business where he spent two years buying companies. “I went all around the world valuing businesses,” he says. “That's really good experience, because you have to very quickly understand the business, what are the real constraints and where is the real value.”
After spells in Italy and France, Wells returned to the UK, ending up working for ventilation products manufacturer Vent-Axia on a project to move manufacturing to China from Spain but keeping assembly in the UK. While there, in 2009, he got a call from the FTA.
“I came along, met Theo [de Pencier, then CEO], and the two of us clicked,” says Wells. “The job initially was as the FD, that very soon became FD and IT, then after IT I had health and safety. It got bigger and bigger. For the last two years I've been the finance and operations director. Operations is our vehicle inspection team, which I have a real affinity with, tachograph services and our training business.”
Appreciation
Wells says it was his work at SCA Mölnlycke that brought him to the FTA’s attention.
“It was there I got an appreciation of what logistics is about, and the intellectual thought that goes into making an efficient supply chain,” Wells says. “A lot of thought went into how we were going to make this efficient, how were going to deliver good customer service at the same time as making us a tight operation. That appeals to my engineering mind; it's problem solving. I've always been fascinated by that.”
So the FTA thought he was up to the job – but after a globe-trotting lifestyle buying, selling and turning around businesses what – apart from the fact it was an easy commute from his home in Eastbourne - attracted Wells to a trade association in Tunbridge Wells?
“One of the attractions was Theo, because I connected with him,” he says. “The logistics industry attracted me, because I've got that kind of mindset. There were some challenges financially at FTA: the pension scheme, that's big challenge that's now under control, so I'm really pleased with that. It is a very professional organisation, and that appeals to me. The values of FTA are quite closely aligned with my own personal values.”
So with his experience of running the slide rule over businesses, would he buy the FTA? “I would actually, yes,” he says. “It's got huge potential.”
Key asset
Wells says the FTA’s key asset is its people. “If you look at our balance sheet, it's not a hugely valuable business in terms of properties,” he says. “The real value is in its people, the expertise. I'm always amazed when I go to a Freight Council, and sit there and listen to our policy people: the depth of their knowledge, and the way that they can articulate what a member's issues are, and translate that into a policy that government would understand. To me, that's an essential role of us as a trade association. If we don't do that well, we're not doing our job well.”
“Another core strength is the way that we've built up our relationship with government,” he adds. “We're recognised as providing evidence-based arguments and pragmatic solutions. We see that by the way the government comes to us on occasions and says ‘can we hear what you think about this?’ or ‘can you give us a solution to that?’ That's clearly of core value to our members.
“We set out a strategy about two years ago, and last year we saw our turnover grow 7%, well ahead of the economy. We're clearly doing something right in terms of our product and the attractiveness of our product. Part of that strategy was also to focus on controlling our costs and looking at products that were really of value to members. We saw our operating profit improve significantly, up 260%, so something's working.”
After being in a senior role at the FTA for six years before being appointed CEO it would be surprising if Wells thought a radical change of direction was required.
“It's evolution not revolution," he confirms. “We are doing well, our membership's growing - up 2% last year and we've added over 150 members since the New Year. Are there things we could tweak? Yes, there are, but essentially we believe we're on the right track.”
Growing membership
At the time of our interview in April, FTA membership stood at 14,707, the highest ever, and Wells is aiming to get it over the 15,000 mark.
“There are 187,000 enterprises engaged in logistics,” he says. “Our penetration is relatively small. OK, of those 187,000, 80% of them have got less than 10 employees, and that's really not our core market. Because we're multi-modal, we appeal to the bigger companies, but it's quite a big pool.”
The FTA has succeeded in attracting most of the big 3PLs into membership as well as logistics clients and own account operators.
“If you look at our penetration within the big fleets over 100 vehicles, it is very high,” says Wells. “I don't see our target market being the one to 10 vehicle fleets. Clearly, there's an opportunity for us in the mid-tier, the 20-100 vehicle market. I think that's actually where we can add a lot of value with our services, because we can provide services that those organisations don't really have the resources to do themselves.”
Those include tachograph analysis, the Member Advice Centre and top quality documentation and publications “You know if you get stuck, you can ring the FTA, and you'll be helped with your compliance issue,” says Wells.
But a key reason for joining the FTA for many remains its lobbying of government on behalf of the transport industry, and that applies irrespective of size.
“I would say that the little companies are also keen that you are representing their interests to government,” says Wells. “You could argue that some of the big guys are so big that they could go on their own to government, and government would listen. I think the same principle applies to whatever size you are: you're better together.”
Lobbying
Successful lobbying is a time consuming and expensive activity however, and that requires additional revenue over and above member subscriptions.
“That model of having a successful service business that enables you to be a more successful trade association is the model that's served us well,” says Wells. “It enables you to punch above your weight and to have that depth of expertise which is invaluable.
“There's sometimes a debate about are they are member or are they are customer, but to be honest they're all members that we're seeking to service to the best of our ability. I don't get hung up about that."
But the strategy developed two years ago recognised the danger of being seen as a commercial operation rather than a trade association.
“Our approach with members is much more around solutions: sitting alongside them saying ‘tell us about your operation.’ We're really hot on one to one contact with the member: go out, see the member, understand their operation,” says Wells. “It's not about ‘are you taking my tacho service?’ This is about ‘what are the issues?’
“I don't like the word consultancy. It sounds expensive. We're there to help and serve our members. We've got a pool of expertise that is there to be utilised. It's about coming alongside a member, understanding them, and seeing how we can help them.”
Representing the industry requires a two-way flow of information and Wells is pleased to see greater than ever interaction between the FTA and the membership via its Freight Councils – described as “democratic meetings where members can influence FTA’s policy agenda to address your company’s needs”.
“Our Freight Council membership has grown significantly,” says Wells. “Our venues are now rammed, and we're having to look at bigger venues, which is great news because you get a bigger spectrum of views that are driving our policy issues.
“It shows us that we are doing something right. Our members are valuing what we do. They can see that they can influence the policy position. Some members use it as a good networking opportunity and some use it as for career development. They'll say to their junior managers ‘get involved in a Freight Council and understand the issues in the industry’."
The FTA has a low churn in its membership – less than 3% each year – and Wells says the biggest challenge is attracting new blood not losing established members.
“A bigger issue is how do you attract newer entrants,” says Wells “How do you attract the Facebook generation? That's something that we're working hard at, to get younger people engaged. That's got to be one of my focuses going forward.”
That is a challenge faced by the FTA’s members as much as the association.
“At the end of our recent driver crisis summit I said ‘we're in a battle for talent’,” he says. “If you look at the demographics of this country, actually that battle is going to intensify, because we've got a bulge of population around the 45 to 60 age group. When they've got to retirement, there's a much smaller pool of workers to attract talent from. That is actually one of our top priorities.”
Social media
That will involve the FTA “upping our game in social media” to appeal to the Facebook and Twitter generation.
“We did a lot of the driver crisis summit around Twitter,” says Wells. “We learnt a lot and we got a lot coverage. To attract younger people, we've got to be slightly faster. Social media is all about that, it's all about instant comment.”
The FTA has also sponsored the Everywoman Transport and Logistics Awards since 2013, and Wells also wants to see more women entering the transport industry.
“That's an important campaign,” he says. “One per cent of drivers are women. We've got to do something about attracting women into the industry. The bus industry has done it. They've attracted women bus drivers.
“Maybe we've got to encourage the industry to look at rosters and say ‘I've got to be flexible about my rosters to accommodate flexible hours’.”
While employers clearly must do more to attract people into the industry, Wells argues the government too has a role to play.
“Historically we've promoted degrees and further education to the exclusion of vocational employment,” he says. “There has been some recognition of recent times that that balance has not been quite right. We need to keep making government aware of that. We've got to value those people that are doing work that's essential for the growth of the economy.”
One voice
Influencing government requires the whole industry to speak with one voice, as shown by the highly successful FairFuelUK campaign to halt fuel duty rises, which pulled together a number of organisations including the RHA and FTA.
That was one instance where we did come together,” says Wells. “The FTA and RHA said ‘there's not point in us going in there looking divided’. We did actually go in there with an agreed line.
“I think image of the industry is potentially an area where we can collaborate. Where we have areas of common interest, then we should work together. I'm naturally a collaborative person; we are better together.
“There are significant areas where we have got a different membership base, you've got to recognise that, and we service a different community. But where we do overlap, then we should do it.”
Another issue exercising operators is the proliferation of standards, especially around cycle safety, such as Fors and Clocs.
“Ultimately, the discussion will be around earned recognition, and about a standard agreed by DVSA that should encompass these two standards,” says Wells. “Our members are saying, ‘look, these standards are multiplying like rabbits and are adding significant overhead to our operations’.
“Now our ambition is to get one standard that is set by a national organisation, is recognised by the industry, and importantly gives value to the members. How many members have I heard say ‘I did Fors because it was free, and now it's not free, and I don't get any value from it. I'm not contracted with TfL, and I'm not in the construction sector. What's in it for me?’
“I don't think Clocs or Fors are a bad idea. Quite the opposite. If it's about promoting safer, compliant operators, that can't be a bad thing. The industry is putting its house in order. It's done a huge amount, led by Cemex, after the issues that they've had. Sadly, I don't think that effort is understood by the public.”
