Meachers Global Logistics, Red Funnel and Steve Porter Transport Group took home trophies in this year’s Motor Transport Partnership Award, and while it might have been for their success transporting goods to and from the Isle of Wight, it wasn’t all sun and sand – there was plenty of hard work too.
The trio of firms offer a great solution to a part of the UK that is “bloody difficult,” as one of the judging panel put it.
Importing and exporting to the Isle of Wight adds the kind of complexity that anyone delivering to an SO or PO postcode will recognise.
Catching the ferry adds time, complexity and cost but the 140,000 people who call the island home (not to mention all the tourists) need food, drink and medical supplies in just the same way as anyone else on the mainland, and its exports – from wind-turbines to agriculture – don’t get to the mainland by themselves.
Therein lies the opportunity, identified by Steve Porter Transport Group, the island’s largest independent transport company, Southampton-based Meachers and Solent ferry operator Red Funnel.
The partnership officially began in 2012, following Steve Porter’s acquisition of Red Funnel’s distribution arm in 2011. Steve Porter and Meachers knew each other then too, via mutual customer Gurit (a composite materials manufacturer on the island).
Steve Porter Transport MD Malcolm Gibson took up the story: “[Gurit] had various requirements, both national and international. And for a lot of its freight, Meachers was supplying it with a warehousing solution. Its whole warehousing function was exported from the island to Southampton and we were the transport
link.
Spice Girls
“It’s quite interesting… when you look back this group is almost like the Spice Girls – it was manufactured.”
“And you’re Old Spice!” quipped Meachers commercial director Gary Whittle.
This exchange highlights the depth of the partnership. There is nothing fake, there’s no show just because Motor Transport has turned up. It’s just guys getting down to business and delivering the goods.
“From our perspective we were quite a small player on the mainland,” said Gibson, “while Meachers was a more dominant supplier on this side and we wanted to tap into that resource
for the benefit of our services and our customers. We started with the UK full-load operation and Meachers was happy for us to utilise its trailers – which is unique as you can lose a trailer for a day, or maybe two, delivering to the island. That gave us an advantage because we went from a small fleet to a large fleet.
“That was the catalyst. We moved from the drop-trailer service to developing trunking services. We are a member of Fortec and Meachers provided us with trunking mechanisms to deliver to the Midlands. We were also working together for [packaging firm]
Huhtamaki,” he added.
That drop-trailer volume has increased by 28% for Steve Porter since the inception of the partnership in 2012, while Meachers is processing some 1,500 trailers a year for Steve Porter at its
facilities outside of Southampton.
“The big feature now is the groupage service. Mainland-based hauliers don’t want to be sending their goods across to the island. They can drop off their freight here and we can deliver it on to the island. As we speak that is the busiest operation – we’re moving 80 trailers a month through the consolidation centre,” Gibson said.
Whittle took up the story: “The initial set-up was these guys buying the Red Funnel logistics arm, and part of that package was the droptrailer option. We looked at it and said ‘we can’t deliver on the island anywhere near as well as Steve Porter’. It has a significant infrastructure on the island and understands what it takes to deliver on the island.”
Sole supplier
Steve Porter Transport has depots in Newport and Cowes and is the sole approved supplier of BOC Gases to the Isle of Wight.
“Red Funnel operates a ferry service, which we don’t, the value that we bring is the scale of running our UK operation. Malcolm can organise to pick up any load in the UK; groupage or full-load,” said Gibson. “We can bring it down here using Meachers’ USP, we can take it to the island using Red Funnel’s USP and we can deliver it on the island using our USP. The three of us are so much stronger together, so no-one can compete in terms of efficiency and cost. We are utilising the thing that all three of us are best at.”
The model for the three parties isn’t a revenue share. Whittle said: “Commercially it is difficult to sell a multi-party solution, because the expectation is that one party is always going to do more than the other. What about service levels? Who owns what contract? It can become quite messy.
"Certainly when we have spoken to people in the past we have clearly denoted in every tender that Steve Porter is our island solution and Red Funnel is our cross-Solent solution. But there is one port of call and that’s us. Similarly we’re comfortable if that one port of call is Steve Porter.”
Relaxed
This is the core of the relationship’s success said Whittle: it’s informal, it’s relaxed and it is clear to customers which firm does what: “We have marketed jointly, but we have stopped short of an economic entity because the relationship is so relaxed that we don’t have an issue. The minute we start waving contracts at each other the basis of this relationship disappears.”
Gibson concurred: “It’s natural. And the strength of it is trust.”
To win the Partnership Award – if you’re interested in entering in 2018 – you have to have one thing in mind: how does the partnership make all parties stronger than they would be without one other?
It’s a simple enough question, but one that is often difficult to express. For Meachers, Red Funnel and Steve Porter if they don’t play the rules of their game then no one benefits. It’s a simple as that.
Gibson said those rules apply to customers as well. They need to be aware throughout their entire supply chain of who has ownership of what, that they understand the reasons the trio work as they do, and they understand that moving goods in this way is for their benefit.
Innovation
On this basis the partnership has gone from strength to strength – innovating along the way. Motor Transport was lucky enough to tour Meachers Sustainable Distribution Centre (SDC) in Southampton, consolidating goods bound for the Isle of Wight.
Fortuitously the development of this site has come at the same time as Southampton is set to introduce a Clean Air Zone (alongside Birmingham, Leeds, Nottingham and Derby).
In 2019 the most polluting vehicles – and for HGV operators that is anything below Euro-6 – will be charged to enter the city. In a Southampton City Council report HGVs were identified as being responsible for 34.1% of all air pollution in the city, so it’s safe to say this is a responsibility that all three parties take seriously.
To that end, Whittle explained, Meachers has been working closely with Southampton council – as the main areas of pollution are areas approaching the city and in and out of the port. Meachers itself sits just outside of the Clean Air Zone, but is as close to it as it could possibly be (the next junction down the M271 or a quarter of a mile).
If you were to set up a consolidation centre for city and port freight, Meachers is based in precisely the right location.
“Because we’ve established this groupage and consolidation service,” said Whittle, “we have calculated, working with Southampton University, that per annum we have managed to save 22,000 journeys, or 11,000 round trips, to the Red Funnel port in the city centre. And that is just for our Isle of Wight operation.
"Across the piece, we have saved just under 80,000 road journeys a year by running this consolidation centre. That is enormous.”
It is just this level of return that saw Steve Porter Transport, Red Funnel and Meachers take home the Partnership award at the Grosvenor House Hotel in July.
RED FUNNEL
Unfortunately, getting three busy logistics companies (and Motor Transport) in the same room at the same time proved to be challenging, so we caught up with Lee Hudson, revenue director at Red Funnel, a few days after our visit to Southampton.
“The initial deal [to sell Red Funnel Distribution to Steve Porter Transport] set the tone for this arrangement,” he said, emphasising that the transfer of staff from Red Funnel to Steve Porter enabled the partnership to run smoothly.
“It helped to bed the partnership in. Red Funnel was playing both roles as a haulier and ferry company. The deal, and the partnership, has enabled us to focus on being a ferry service.
“We get all kinds of customers contact us to get cargo moved to the island. Through the partnership we can work with the customer to get cargo moving to and from the island seamlessly. All the customer has to do is work with one of us to get a door-to-door service.”
One of the main benefits for Red Funnel has been controlling drop trailer volumes to free capacity on ferry crossings, particularly during the peak hours of 6am to 8am, and because it is transporting so many trailers every day it has been able to reintroduce an overnight service to take trailers to the island and free up capacity on its peak boats – ensuring goods reach customers first thing in the morning.
Hudson was also keen to stress the benefits of consolidating deliveries and the number of truck journeys it has taken off the roads. While the environmental benefits are clear, it also has operational benefits, given the shortage of drivers in the industry, as reducing road journeys means using fewer drivers.
“It has definitely unlocked benefits for us that we could not have realised without the partnership,” he added.