Yearsley comes in from the cold

Frozen food specialist Yearsley Logistics is celebrating its 60th anniversary this year. The firm, which is now based in Heywood, Lancashire, started in 1955 on a farm in Rochdale. It is still owned by the Yearsley family and led by MD Harry Yearsley.The Yearsley Group turned over £174m in 2014, more or less equally split between its two divisions - Logistics and Food. 

The Logistics division, headed by logistics director Tim Moran (pictured, with a special Yearsley anniversary liveried vehicle), has 12 depots across UK from Glasgow to Kent and Bristol to Wisbech with capacity to store 365,000 frozen or chilled pallets and runs over 300 vehicles.

The company started out as a fruit and veg wholesaler, moving into frozen food in the 1970s as this became more popular. The company built a cold store for its products and quickly realised it could sell the space to other manufacturers and distributors.

“Yearsley Group moved into trading frozen food and then built facilities bigger than they needed,” says Moran. “So people said ‘I will buy that off you but can I leave it in your cold store’ so there is the birth of third party storage. Then people would say ‘that product you have in your cold store, can you deliver it’ and there’s the birth of third party transport. That was the way it developed.”

Today Yearsley Logistics ships over 10,000 pallets a day on behalf of its 500 customers, into retail and food service and manufacturers. It also offers a full range of other frozen food services including long term storage for food importers, blast freezing, repacking and specialist pick operations. Three years ago it also established a global freight forwarding division so Yearsley Logistics can now claim to handle product from source to store.

IT development

Another Yearsley Logistics USP is its 10-strong in-house IT department that has developed NetStock, a bespoke inventory management system that gives clients visibility of their stock 24 hours a day and enables them to send instructions to Yearsley Logistics.

Clients include Greggs, Brakes, Heinz, CSM, Premier Foods, Youngs – and Yearsley Food, which makes up around 5% of Moran’s business.

“All Food sales are moved through Logistics,” says Moran. “They could use another contractor but it is better for them and us if they use us.”

Moran’s future strategy is to develop “super hubs” to serve retailers at lower cost, and to move into ambient markets.

“After a couple of acquisitions we ended up at 12 sites and some of those sites overlap each other,” says Moran. “Heywood is our HQ and northern super hub. It is our biggest site with 60,000 pallet spaces now phase 6 is complete. It can grow by another 15,000 spaces but that will be our maximum. Another super hub is located at Hams Hall in the Midlands and we have planning permission for a third at Peterborough.

“They will be our retail super hubs delivering to RDCs. We have also got planning permission to expand our food service site at Belle Eau Park in Newark into our first national super hub for the food service sector.”

The rationale behind consolidating into bigger sites is driven by increased competition and the need to reduce the cost of storage and distribution.

“The recession brought a very cost-competitive market,” Moran explains. “Supermarket frozen food was predominantly a day one for day three, five day week operation. That went to day one, day three, seven days a week and then day one, day two, seven days a week and in some places is now day one, day one seven days a week.

“We used to get the order on Monday and we didn’t have to deliver it until Wednesday so we had all Tuesday to shunt it around the network. That disappeared because of shortened lead times. We needed to consolidate into fewer sites so we didn’t have to make as many shunt movements which are non-value legs. We are building big sites in strategic areas that allow us to hit full load movements into retail and food service as easily and cost effectively as we can.

“It’s also a push away from conventional storage into automation to hit the price point of warehousing in the future. We now have automation at four of our sites – Grimsby, Heywood, Hams Hall and Bristol – and we will need to do more in the future because there has been a price war in cold storage.”

Diversify

This intense price competition has made Yearsley Logistics diversify its business and look outside its traditional markets for more profitable opportunities.

“The majority of our business is still within frozen,” Moran says. “With super hub strategy we can start to ask what will we do with the other sites. The retail super hubs will be all about pumping volume and making it as efficient as possible.

“At the other sites we will be looking at what we can do in a more localised cold storage operation. Gillingham for example does a lot of work importing meat from the docks and it will probably stay that way. Our outlying depots will be there to serve the local manufacturing base with a cold store offer. It isn’t a one size fits all road map to the future because that’s not going to work. We have to have different sites for different things so the sites will still be there.”

Looking beyond frozen food is also part of the future strategy, and that is why the company has quietly changed its name from Yearsley Cold Storage and Distribution to Yearsley Logistics.

“Diversifying out of frozen is very much on our minds,” says Moran. “We sit as the largest frozen food logistics provider, nearly double the size of our nearest competitor in terms of storage space with 365,000 pallet spaces.

“ As we are approaching saturation. We are always looking for new customers of course but there is a lot of consolidation with that. We believe there is a great opportunity within ambient and that is something we are actively pursuing.

“What we did in frozen we believe can be replicated in ambient and we see ambient as a very fragmented market. There are some very big boys and lots of end players who are still probably in pallet networks. So there is a big job to do creating a true UK ambient solution. That is the next phase for us. What we do in ambient now is very small but is something we are actively pursuing.”

Ambient

While Moran initially plans to move into ambient food distribution he is not limiting his ambitions.

“Our expertise lies in food and we have the contacts within the retailers to make food work for us,” he argues. “However ambient is a huge market and we are ambitious to grow so if it’s a pen and pencil, a TV or a sofa doesn’t really matter. It’s a commodity that needs storing and moving around.”

Of Yearsley Logistics 12 sites, five do both frozen and ambient now. “It is too early to tell if will stay with frozen and ambient on one site or go to dedicated ambient and frozen sites,” says Moran. “Some of our frozen customers have asked us to look at ambient solutions for them. Piecing that together to create critical mass is the important part.”

Improving efficiency by handling both frozen and ambient products fits in with the current drive by the major supermarkets to drive cost out of their supply chains as they increasingly compete head to head with the discount chains.

“The way the supermarkets are working has changed,” Moran believes. “There has been a realisation that, if all the supermarkets are buying the same products at about the same price, they see the supply chain as the difference between their offering. If they can get cost out of the supply chain they can offer it to the consumer cheaper.

“Things are changing within the retailers to take cost out of the supply chain and we are all trying to do things more cost efficiently. We have offered a solution to Aldi so they are better able to cope with their growth. “To do that across other retailers is possibly the way forward. They don’t want the cost of that product sat in their DC; it is already sat in a warehouse somewhere so why not consolidate it down and get someone else to do the service for them.”

Yearsley Logistics fleet mix has changed in recent years after the Food division acquired frozen seafood wholesaler IcePak three years ago. This brought a customer base of smaller high street food service outlets requiring Logistics to add smaller vehicles to the fleet.

“We are predominantly an artic fleet and the majority of movements are 26 pallet trailers,” says Moran. “But we have a deep level of distribution because of the food service business, and we are delivering to Chinese takeaways, schools and NHS sites as well as supermarkets. So we have everything from an Isuzu van to 44-pallet double-decks.”

He continues: “Our wholesale business was built on the high street – freezer centres, markets etc - but they went into decline as the supermarkets got bigger. From the logistics point of view we have always been used to going onto the high street and delivering with a tail lift. IcePak did bring a slight complication but we have coped.”

Yearsley Logistics has added eight frozen double decks to its fleet but the heavy nature of the product can restrict their usefulness. “You have to get the product mix right,” says Moran. “You need lots of product that are light, Yorkshire pudding are a great example.”

Yearsley Logistics has begun phasing out its 32-tonne, 14 pallet rigid vehicles in favour of urban trailers for delivering around town. “That is about unit utilisation,” says Moran. “We only used the 14 pallet vehicles once a day because at night they became useless. The urban trailer may only be used once a day but it is the lesser cost part of the cost of the rig and we can use the unit again at night.

“We are looking to get two movements minimum out of every vehicle every day – a day shift and a night shift – if we can.”

Yearsley Logistics employs around 400 drivers and tries to minimise its use of agency drivers. Moran says the driver shortage and consequent rise in wages reported by some operators has had a limited effect on Yearsley Logistics.

“There has been a lot of noise in the industry about drivers’ wages in the last year and a lot of people have reacted to that,” he says. “We have to solve the perception of a driver shortage. We don’t feel that impacted by a driver shortage but that may be because of our network which means we can pool our drivers from different areas.

“Birmingham is a very competitive market for drivers but around the North West and other regions it’s not too bad. It is a very competitive industry and hauliers are not having a great time at the moment. We have to be very careful about what we pay our drivers and not get caught out by a scare story.”