The group chief executive of rapidly growing Monex Group said companies that are buying up businesses and consolidating will survive the current turmoil within UK haulage – and it remains on the acquisition trail.
James Howells told Motor Transport the industry had become much more complex and was being bogged down by bureaucracy, but that by scaling up it was surviving “by the skin of our teeth”.
Monex has hit the headlines in the last couple of years with purchases of Bridgetime Transport, Richardson Traction and most recently Welsh haulier Freight Movement, which collapsed into administration last month.
Howells said it was by no means as aggressive in its acquisitions as others, but that it was now putting the final touches to a purchase in Colchester and was also in talks with two other firms.
“The industry has got complex through bureaucracy,” he said. “It now needs a lot of people to run it and it’s become almost unsustainable. It used to be that running 10 to 15 trucks was a struggle; now 40 to 50 is the number that’s really hard.
“Freight Movement ran 50 vehicles and had a turnover of £10m. [But] it’s about the ability to generate gross profit to pay for the overheads.
“You need a team of people for compliance, for HR, for fuel and so on. It’s just become quite a complex thing and it’s the scale of the business that makes it work.”
Howells said people management and driver training had also become more difficult: “I understand health and safety,” he said. “We have a compliance department and they are very busy. But I don’t understand why it’s all changed. Man managing people has become very hard.
“But what we are finding is we have the infrastructure in place and are able to run the business and deal with the bureaucracy and people and the changing costs, but by the skin of our teeth.
“We have to add more and more vehicles to add to the rising costs.”
He acknowledged survival was harder for businesses smaller than Monex Group and added that companies at all levels were struggling: “Those aggressively growing and consolidating are staying ahead of it.
“People that are struggling and standing still are struggling for sure.”
Howells said its acquisition strategy was largely about looking for family-run companies whose offspring had chosen to give haulage the cold shoulder and that the well-run Richardsons was a good example of that: “We are not as aggressive as some of the bigger players,” he said.
“We’re looking for family-owned businesses with solid customer bases. We are finding that these smaller transport companies with no succession plan and a loyal customer base are a great way to go for sure.”
