National contract logistics company, SGS Logistics, has debuted on the Australian Financial Review’s Top 100 Fast Starters 2018 it was revealed this week.
It landed at 31 on the list with a 112 per cent increase on year-on-year revenue.
To qualify businesses must have commenced trading on or after 1 July 2014 and provide two years of turnover data and show a minimum of $500,000 in the second-most-recent reporting period (2016-2017).
If the entrant is not publicly listed, the Financial Review seeks verification from external auditors or accountants and determines rank by revenue reported for the last period (2017-2018).
Established by company directors Luke Sadler and David Gay in 2015, the Melbourne-started nationally focussed SGS Logistics, based in Scoresby, provides dedicated driver fleets to its customers, specialising in reduced costs and logistics efficiency according to Sadler, who had formerly worked with Kings Transport.
“I’m not suggesting the position we’re taking in the industry is unique and that we’re alone in what we’re doing. But the fact is most transport companies don’t pay owner drivers enough. We’re determined to take sub contractor pays back to where it was 30 or 40 years ago when it was considered a great paying job. We want to make sure these drivers are properly renumerated and to make it the highly regarded position it once was,” he said.
“By looking after drivers they will stick around. There’ll be less damages, increased levels of productivity and vastly improved customer service,” said Sadler.
“The goal is for this strategy to lead to contract extensions and renewals. Too many transport companies spend every contract cycle trying to put out spot fires until they realise with 6 months to go they actually haven’t delivered on anything they said they would, and only start trying to deliver then.”
“It’s a pattern you see where transport executives speak at presentations about efficiencies and forget it when the contract starts distracted by margin and client management.”
Sadler said he wants to influence the industry long term. By getting better rates for owner-drivers it would have a ripple effect and positively impact transport companies and their customers.
The strategy of reducing gross margins by paying drivers more in order to facilitate higher net margins in the longer term by keeping customers for longer is working said Sadler who was confident that current revenue was already enough to see SGS Logistics appear much higher on the Fast Starters Top 100 for 2019.
“Actually seeing it in black and white helps to demonstrate that we were able to turn what was a few years ago a concept into a reality. For everybody else it demonstrates that what we’ve been driving everyone mad about, giving drivers a bigger slice of the pie, works”
“We’re very excited to be on the list,” he said.
“We see this entry alongside our fleet of over 100 drivers as evidence that we were right.”
(Image: Luke Sadler, SGS Logistics Director, Mark Fenton Sodastream Director).