Surging profits, a string of successful contracts and a shrewd growth plan have made Expect Distribution a stand-out performer in the haulage sector. But the Bradford-based 3PL has also made the welfare and gender diversity of its staff a top priority.
These may be uncertain times, but the only concern for Expect Distribution MD Neil Rushworth right now is ensuring the company can meet growing demand. Our 2020 Haulier of the Year has prospered during the pandemic, aided not only by having contracts in the right sectors, but also by new deals that have quickly added to its bottom line.
But with Covid-19 sparking what Rushworth describes as an “explosion” of business for the Bradford-based 3PL, capacity is becoming a growing issue, especially amid signs of a more general market upturn as the year unfolds.
“The concern is, if the economy recovers at pace, can our industry cope with it?” he explains. “Over the last few years it’s not necessarily become less competitive, but lots of hauliers have become content with what they have. There aren’t enough out there wanting to grow, so it will be interesting to see what happens.
“Expect wants new sectors to move into. Others are less ambitious and happy to stick with the hand they’ve got. But every risk we take is calculated.”
A founder member of Palletline, the family-owned business has 296 staff, four sites and 110 vehicles. Two years ago it added a new 215,000sq ft site near its head office overlooking the M606.
Rushworth, pictured, describes winning the award as “a morale booster” for the whole business. “It certainly felt like we’d earned it with the amount of work we’ve put in,” he laughs. ”But volumes returned after the initial lockdown period to about 15% above what we’d budgeted for.”
He agrees that the spike is down to the customers and sectors that the business works for being exceptionally busy in the pandemic, such as food and drink and pharmaceuticals. Expect also has a lucrative partnership with the Astonish cleaning products and deals with many online retailers.
“Call it fortunate, but the markets we deal in have been unaffected,” he says. “With online retail, we’ve seen people spending money on bathrooms, wood-burning stoves, kitchen worktops – we deal with all those guys. We’re also a nominated courier for Amazon.”
The company looks to grow at 10-12% a year. “We turn over just under £35m, with profits of just over £3m,” Rushworth reveals. “The profit has been really pleasing; it grew from just over £2m in 2019, so quite a hike.”
Expect furloughed half its staff in the “total confusion” of a year ago, but within three months they were all back. A Covid management team was set up, but wild predictions of an Armageddon of liquidations failed to materialise. Conversely, Rushworth feels the government overcompensated in protecting businesses: “The volume was still there for a lot of hauliers, and the industries where they were strong, they were really strong!”
The company also worked to lift morale – the management team even made sandwiches every Friday for drivers and staff. And with doubts hanging over summer holidays, Expect converted part of its site into a beach. Rushworth also wrote emails to everyone on furlough every week, giving updates on the business so they weren’t sitting at home feeling isolated.
Six redundancies were made, but only because Covid exposed inefficiencies. The proof-of-delivery document has been scrapped, for example, in favour of a digital approach, in a move universally welcomed by customers.
Expect places huge emphasis on the welfare, development and diversity of its staff. Prior to the pandemic it progressed five drivers from Category C to Category C+E, took on six new apprentices, and moved two warehouse workers through its Warehouse to Wheels scheme. It also works with Huddersfield University to take students on placement and holds four driver open-days each year.
Best part of the job
The best part of the job, Rushworth says, is contract logistics. “It’s giving customers a solution, a longer-term win. With general haulage you can speak to them one day and turn it on the next. But this is a three- to six-month planning process with the customer.”
The company also partners with energy drink Boost and in January signed a five-year contract with Dutch veterinary products manufacturer Beaphar. “They wanted a 3PL that could manage the warehousing and picking operations – those are the sort of contracts we’re aiming at,” Rushworth says.
Expect’s biggest customer is Card Factory, a contract it won through 10 years of engagement. “Rather than them just ploughing all the freight through a pallet network, we’re servicing 1,200 stores in a more cost-effective way,” Rushworth explains. “We can manage their growth better as well.”
The ultimate aim, he says, is to be in a niche between the SMEs and the 3PLs, rather than in a race to the bottom where it’s all about the tariff: “We charge a fair price and the customer feels like they’ve got a partner, not just a supplier.”
The next step is catering for the growing B2C market, which takes up nearly 20% of volume. This brings us back to the firm’s expansion plans, which centre on growing the contract and warehousing division, not the fleet.
“We have a number of partners who we run direct trunks to, so the aim is to deal with the volume we have efficiently,” Rushworth says. “It’s about growing the bottom line. We’ve always grown organically as well, although acquisitions are on our radar if we find the right fit.”
Targets extend to the south of England, with all four operating bases currently in the West Yorkshire area. “We channel a lot of freight through the Palletline network into that south-east pocket, so perhaps it might be best having our own operation down there,” he says. “Then maybe local acquisitions. We’re not at that stage, but in order to cater for our growth, how are we going to do that? Our site here in Bradford doesn’t have infinite capacity. We need to cater for our customer base in this area by having another base in the West Yorkshire area. That might happen during 2021.”
Ultimately, Rushworth is confident he has the team to take the company forward. “Being in a family business you can be a bit vertical,” he admits. “Everything used to be channelled through me. You can only grow so far with that approach. So yes, I feel as though we’ve got the right model, but there’ll be a few more hurdles along the way. There’s still an air of uncertainty, but there’s a better feel about it than people thought there would be.
"The industry is in a good place.”