To remain competitive C&H (Hauliers) has wrapped up the niche paper reel market, expanded into recycling and invested heavily in its fleet.
The choice of becoming a niche player with a limited pool of clients or a general haulier swimming in a bigger pond is always a tough one. Essex-based C&H (Hauliers) has focused on the paper reel market, and MD Steve Mercer (pictured) is hoping to secure an extension to its current contract with one its biggest customers, Aylesford Newsprint.
Newsprint customers regularly switch supplier, so a single contract with a customer like Aylesford Newsprint means being flat out for three weeks, then quiet for a fortnight before it picks up again. "If you are a haulier and it’s your only contract, what do you do with your trucks for two weeks?" he asks. "No one can afford to stand trucks."
The unique selling point for C&H (Hauliers), which is part of the Charles Gee Group, is that the company hauls for the majority of the newsprint producers. Mercer can divert truck and trailers to follow the peaks and keep the fleet fully utilised. "When DHL ran the contract [C&H took it over in 2009] it had to sub-contract to us in the peak times to cope with the volume of work.
"We get challenged by local hauliers who say they can do the work with one of our clients cheaper but you have to buy all this specialist equipment and you only have work for two weeks every month," he says. "Market saturation is key in a niche sector like forest products."
Streamlined
Since he joined in 2008, Mercer has streamlined C&H’s management, diversified its work and added wheels to the fleet. "Ten years ago the company was a brokerage; we sub-contracted tonnage to hauliers. Our customer expectations increased and we started to do it ourselves," he says. "Five years ago we had 45 vehicles. When we won the contract for the Aylesford Newsprint business it came with an additional 25 vehicles."
To move the business forward it was easier to grow existing customers in forestry products, and C&H expanded its paper recycling business, boosting the moving floor fleet from eight trailers to 44 in just four years.
"We haven’t moved away from finished paper but we have expanded into other sectors without the need to invest into other markets - but I think that will come because the newsprint sector is falling," Mercer says. "We will have to organically grow ourselves (again) but it won’t be an aggressive thing."
Aylesford Newsprint, which makes up a third of C&H (Hauliers) current business, buys in 500,000 tonnes of recycled paper to help produce around 400,000 tonnes of reeled newsprint paper a year for newspaper printers.
Lee Smyth, sales administration and logistics manager for Aylesford Newsprint, says: "In the UK, every type of supplied paper runs differently on the presses so to maximise the printers’ efficiency a major publisher will run a specific sheet from us, which creates a block order which we will deliver over three weeks.
"When a printer gets new paper from a different supplier they have to adjust the machines. The reason C&H was chosen [for the existing contract] was that they were best positioned in the industry to handle the on/off block ordering pattern that the larger pressrooms tend to operate, so when it goes quiet they can switch their fleet to other newsprint customers."
Martland Holdings bought Aylesford Newsprint from SCA Forest Products and Mondi Group last year. The new owner has successfully reduced containerised paper shipments to destination outside of Europe and increased sales in the UK and Benelux markets. This has led to a significant rise in European deliveries using Joloda-equipped trailers.
Positive response
"C&H has responded very positively to the challenges this presents, especially for a UK based operator," says Smyth. "Our strength is selling quick turning around in the UK selling with specialised trailers; what has been encouraging for us is that C&H has invested in the fleet part-way through the contract.
"Previously, a transport company would have invested heavily in the fleet at the beginning of the contract, driven the vehicles into the ground and will then only reinvest if they are successful in retaining the contract."
That investment by C&H is evident in 30 new universal specification trailers to carry reels and bailed paper as well as operate in Europe, worth more than £1m. These trailers are designed to do all of the forestry work except loose recycled paper and the specific shotgun load of paper reels to News International’s printing site at Broxbourne.
More importantly, the new trailers solve planning issues. "A major headache for our route planners is ensuring a trailer matches the load and is compatible for loading and unloading at other sites," Mercer explains.
"With a varied fleet of trailers in terms of height and loading systems, significant empty running between sites was unavoidable. For example, a vehicle would deliver to a press room in London then reload in Cambridge with bailed waste and go to King Lynn and reload for Europe.
"That typically requires a ‘systems’ trailer [using fixed tracks in the trailer floor and skates to deliver reels of paper] that wouldn’t be tall enough to reload bailed waste, so we send a taller systems trailer but it cannot reload when it gets to Kings Lynn because it has to collect a load for Antwerp and it’s too tall," he explains.
"The challenge was building a trailer that can be loaded using a track system and discharge in all the major pressrooms. Then overlay that with the European work, we need a trailer than can operate at 4.0m.
"Another driver was to create the 2.7m side and rear as well as meet European standards for load bearing curtains and discharge through the rear, which is required for European work when we are backhauling, as well as a 24 tonne payload on five axles that rises to 28 tonnes on six axles at 44 tonnes."
Dual-ride height
Tony Sturgess is the chief design engineer at SDC Trailers in Mansfield. "The trailers needed dual-ride height suspension but different dual-ride height settings to work with the new tractors at 1,100mm fifth wheel height and existing tractors at 1,250mm fifth wheel height," he says. "The trailers were designed with slim neck depth and slim-line roof rails to give a side and rear aperture of 2,705mm and fitted with 385/65R22.5 tyres."
There are aluminium track in-fills that allow forklifts to run on the trailer deck without damaging the Joloda/Loadmate tracks, load bearing curtains to EN12641-2:2006, and three sliding posts on each side of the trailer with four wooden batons per bay, which is another requirement for collecting loads in Europe.
The all-purpose trailers replaced 60 general trailers, and Mercer says he will add 20 a year over the next five years. "Empty running was considerable before we got the dual-height trailers, again you come back to the problem that the planners could not plan effectively to link together work because of the trailer, now they don’t have to think about it," he says.
The added specification for Europe is a mixed blessing. "The trouble with our European paper reel work is that like the UK, it’s inconsistent. We may ship the same volume to Europe every week but it goes to one area for a few weeks then it stops, and we go somewhere else for a few weeks.
"That inhibits us from arranging local agreements, that irritates me no end because it puts us back in the hands of the agents for backloads," he says.
Avoiding the Euro-6 cost penalty
Steve Mercer is unequivocal about Euro-6. "Talking to Mercedes the Euro-6, which comes in on 1 January 2014, the add-on cost is £8-12,000. At best fuel efficiency will be the same as Euro-5, and Euro-6 chassis is heavier," explains the MD of Essex-based C&H (Hauliers).
This is why he brought forward all his truck purchases and spent more than £3m on upgrading the fleet. This included 37 Mercedes-Benz 6x2 Actros Gigaspace Euro-5 tractor units.
C&H employs 160 people, including 127 drivers and annually transports 2.3million tonnes of forestry products. The fleet includes 110 trucks, all Euro-5 and none older than 2009 and 240 trailers (see sidebar). "The manufacturers haven’t sold Euro-6 [as an alternative to Euro-5] at all and, with no incentive from the government, what is the point?
"All you can do is a Reduced Pollution Certificate to sweeten the deal, so there is nothing that drives you into taking Euro-6," he says suggesting it will be 2015 when the company next buys a truck.
At some point hauliers who do buy the new technology will have to pass on that cost because it is unavoidable. "Haulage is a marginal business and a marginal change makes a huge difference to the bottom line.
"You have to educate customers, who have their own challenges, that Euro-6 is a cost increase we cannot avoid," he says.
The Actros 2545 6x2 trucks were specified with residual values in mind, something driven by the manufacturers. "We have replaced Long Distance cabs with (bigger) Gigaspace cabs for the same price - it’s all about the RVs," he adds.
As the Euro-6 deadline looms ever larger, Mercer feels Euro-5 will become more expensive. "We hedged our bets and bought early because we can get a good price commanding extremely good RVs, because the right spec kit at Euro-5 in four or five years’ time will be quite desirable," he says.
The final round of purchasing took place with 10 Daf XF105.460s fitted with the Superspace cab. He chose Daf because the dealership is opposite its Kings Lynn site, where seven will operate and because of the change in backup. "Daf has just matched what Mercedes are doing; offering a vehicle with two years repair and maintenance and not a service package without repairs, plus there is no mileage cap on it," he says.
