The 2012 Haulier of the Year, CM Downton, is a family-run firm based in Moreton Valence, Gloucestershire. Despite MD Andy Downton’s self-deprecatory comments about the family just being simple West Country folk, the company is highly respected for its professionalism and consistent strong performance.
In an industry characterised by brutally low margins, where hauliers are often confronted with the unpalatable choice of buying unprofitable business or protecting profit at the expense of turnover, Downton has achieved the remarkable feat of boosting turnover and doubling operating profit since the credit crunch struck in 2008. In an industry where a profit margin of 3% or less is not unusual, Downton’s 7% return on sales while maintaining strong revenue growth was described as “spectacular” by one judge on the Haulier of the Year selection panel.
The company is confident for the future too, and a spate of contract wins means turnover is predicted to rise from £78m this year to £100m next year. In 2011, all UK contracts that expired were renewed for between three and five years, and the firm secured its largest contract win – an £18m a year deal with InBev.
This success has been achieved by sticking to the family values the directors believe in: highly-quality, professional service; never compromising on standards and values; employee and customer care. Collecting the Haulier of the Year trophy on 13 June, MD Andy Downton put the firm’s success down simply to “traditional family values and customer care”.
In its entry, CM Downton stated: “We have achieved unprecedented success in a highly competitive industry. This is the result…of the hard work of a dedicated team that provides the highest level of professional support and commitment to the company and its customers alike.”
The awards judging panel was impressed, describing Downton as a highly professional, well managed company. The entry included impressive customer testimonials, typified by: “Downton is proactive, constantly responding to commercial and environmental challenges”; and “Downton has expanded with us and continued to surpass our expectations”.
While the customer care ethos runs right through the company from the directors down, it is delivered on the ground by a dedicated team of managers and employees who ensure the directors’ aims are implemented. The hands-on style of the directors – MD Andy Downton (pictured centre)and his brothers Richard (finance director, left) and John (operations director, right) – means communication channels are kept short so decisions are made quickly.
The survey of the Haulier of the Year shortlist’s customers carried out by Analytiqa put CM Downton at the top of the list, with its key differentiator described as “consistently performing beyond the terms of the contract”, while the company’s flexibility and ability to make quick decisions was also mentioned by customers.
Andy Downton admits that it is easy to say customer care is key to success but actually delivering exceptional service day in, day out is far from easy.
“It is easy to come out with lots of nice statements, but my brothers and I have genuinely been brought up in the industry, and we have lived, breathed, ate and slept transport all our lives,” he says. “In the UK, you have the large Plcs at the top and the regional players at the bottom. The trick for us is to take customers from both top and bottom. I love the business and have always believed passionately in customer service. A lot of people talk about it, but don’t really understand it.”
The proof of the pudding is that many of Downton’s customers have been with the company for a decade or more, and getting under a customer’s skin to really understand their business is essential.
“We have worked very closely with our clients and we understand the industry inside out,” says Downton. “It never ceases to amaze me the number of people who come into our industry but don’t understand it and don’t have a service culture. There is still a lot of arrogance in the way contracts are managed, and too many people are not interested in cultivating relationships. They turn up at review meetings with the attitude ‘give ‘em half an hour and get the hell out of there’ and what they are not doing is servicing the client.”
This he believes is largely due to the close involvement in the running of the business by the Downton family.
“A lot of people do not believe in family businesses, which saddens me immensely,” Downton says. ”Families think and react faster. My brothers and I intuitively know the way each other thinks and we don’t have any corporate politics. We have made decisions on massive deals in minutes. We have surrounded ourselves with clever people but they all have to understand the way we think. If one of us isn’t happy with a deal we will walk away, but when we do come together we are a solid force and we go for it.”
One barrier to delivering exceptional service is of course at the root cause of the low margins currently seen in the industry – cut-throat competition that leads to rate cutting to secure new contracts.
“This is a very, very competitive industry, and some people position themselves in contracts where the margins are poor from the start,” says Downton. “They are playing catch-up from the start and that means an aggressive style from day one because the haulier knows the contract isn’t worth enough money and he is going after the client to find extras. The client then goes on the defensive and you have a recipe for disaster. Add in some poor service and a management team that isn’t engaged and it goes into freefall.”
That means pricing jobs right at the start and taking and honest and open approach to the contract.
“We are from the West Country and just simple guys, but the one test I apply to any outsourced contract is ‘when I’m in the sh*t, will this guy pull me out? If it’s Jubilee weekend and I have an extra 150 orders come through on a Friday night will he try and get them through for me?’ That is the ultimate test,” says Downton. “You can have the best business development team in the world but it all comes down to ‘when my back is against the wall, will they deliver for me?’.”
Downton admits that for some large blue chip customers there is a “comfort factor” in dealing with a large 3PL , but the impersonal service they receive can leave them “frustrated”.
“They can’t go to a small regional haulier because they are now no longer there,” he says. “So the trick for players like us and those in the MT Top 100 is to hit that middle ground and keep the service levels right. We will always have lower overheads and costs, and if you stay close and stay hands-on you will be alright.”
With Downton approaching £100m annual turnover, the firm is still a long way short of the £1bn 3PLs that make up the top five, but is there a limit to how big the business can become before it loses its family values?
“That is a good question that we often ask ourselves,” Downton says. “The trick is to break the operation down into business units to retain the same culture. So you could have a £250m business made of five £50m units as long as the people understand the ethics and what is involved. I am a great believer in local relationships. The challenge for mid-tier business like ours is to retain the family values and service ethic as we grow and I feel confident we can do that.”
CM Downton has done well in drinks and magazine distribution in recent years, and the brothers have no plans to move too far from its existing FMCG markets.
“We will continue to focus on the core markets we have today,” Downton says. “Food and drink has traditionally served us very well and the one thing we have learnt is stay close to the housewife and what she is buying each week. We are bringing in a new business development manager to focus on FMCG sectors and make sure clients understand there is a strong future for businesses like ours.”
