More than just a trucking company
The name Eddie Stobart is known around the world by those interested in the trucking industry. Tim Giles talks to the man at the head of the UK transport industry phenomenon.
It is very unusual for the name of a major road transport organisation in one country to be known widely in areas where it does not operate. Eddie Stobart Ltd is a name, or a brand, known by many around the globe due to its phenomenally successful fan club and a reality TV series about the company’s operation. There is something about the organisation, with its individually named trucks, all with a girl’s name on the front, alongside strong branding with memorable visual images, that has caught the imagination of people in the UK, and now around the world.
The Eddie Stobart Group that exists today is a far cry from the small agricultural business set up by the original Eddie Stobart in the Lake District, in England’s far north-west, back in the 60s. Now the company operates out of 40 sites in the UK and Europe, involving itself in road freight, rail freight, sea freight, warehousing and logistics.
The company is now run by Eddie’s younger son William who, along with close colleague Andrew Tinkler, bought the company in 2004 when it was on the verge of bankruptcy. The two now work as Chief Operating Officer and Chief Executive Officer respectively, taking the company from a large trucking operation to a major force in the UK economy.
William Stobart had come into the family business in 1979 as a truck driver working with his brother Edward. He retains the strong Cumbrian accent and down to earth, straight talking attitude that took the small operation of four trucks in 1979 to over 2000 in 2011. Although the brand is seen as iconic from the point of view of the public, those running the company retain a straightforward business-like manner, focused on the day-to-day work of efficiently getting goods from A to B.
The central nervous system of the Stobart Group is something the company has developed itself called GTS. This is a sophisticated and comprehensive tracking system which keeps tabs on every item of equipment and consignment around Europe. The level of information available to individual planners controlling the operation means they can make swift loading and routing decisions.
“What the system does is give the planner a lot of options,” said William. “But, at the end of the day, it is a human brain that plans that truck. We have trialled some automated systems but there are so many variables you have to think about. We’ve tried to devise a system where there is still communication with a phone call between the planner and the driver.”
The system has been developed to minimise the amount of empty miles travelled by the trucks in the fleet. On the screen, there are three colours: green is for a loaded truck, yellow is for a truck travelling under 45 miles to its next load and red signifies a truck travelling further to pick up its next load.
There are also black dots on the monitor screen and these denote trucks that are neither in their loading and unloading location nor in a Stobart depot. These trucks are on their statutory breaks, 45 minutes under European law. If a planner sees the truck has been parked for longer, they will often call to find out if there is anything wrong delaying their departure.
“You have to have a system like this which is live because the supply chain is so tight,” says William. “Financially, we get paid by load so any little problem means we have to sweat that time.”
All of Stobart’s freight is charged to the customer on a per load rate, set annually as part of the contract. The only variable is the fuel surcharge, to compensate Stobart for fuel price fluctuations.
The sophisticated system allows both planners and their superiors to drill down, examining the work done by an individual driver or individual truck. It is also possible to track back the previous 24 or 48 hours. It constantly calculates the relationship between loaded and empty running and will highlight anything it regards as excess dead mileage.
The work needing to be done is fed into the system directly from the computer systems of most of their major customers, arriving in real time and ready to be allocated to particular trucks by planners. Some of the smaller customers and those who only use Stobart occasionally will phone or fax in their orders which will be keyed into the system by Stobart staff.
“When we are quoting a job we have a computer model to help us,” says William. “It’s all about time, so we will agree with the customer about how long it should take to load a truck. If it takes longer we will send them another invoice. We are responsible for the time between when they load and they unload and we have a lot of data on road speeds on different roads at different times around the country. We then agree a tipping time and also include some non-productive time, which is the time the truck will take to get to its next load point.”
Stobart has calculated an overall cost per minute of the truck and its driver which includes everything apart from fuel and tyres. These two elements are added in per kilometre when calculating running time, when the truck is on the road. When Stobart knows the total amount of time each job will take, the company can then calculate its quote to the customer.
Overall, the Stobart fleet averages 84% of its time with the truck loaded and the company has calculated that for every 1% it increases this number, income increases by £2.5 million ($4 million).
The fleet includes Scania prime movers rated at 440hp and Volvo FH prime movers rated at 460hp running at 44 tonnes as a six axle semi. Where the prime movers are 4x2, they work at a GCM of 40 tonnes, with between 400 and 420hp.
Automated manual transmissions are used in all trucks. Opticruise with three pedals is preferred in Scanias and the two pedal I-shift in the Volvos. Stobart is now trialling reverting to manual gearboxes, due to the way Stobart analyses fuel consumption on a driver by driver basis.
“Our drivers are paid a fuel consumption bonus,” says William. “There are four KPI’s they need to meet to get the bonus. They have to keep the rev counter in the green band. We know if they brake too sharply, if they accelerate too sharply and we also know if the truck has been stood too long with the engine idling.”
This system has led to drivers asking to have control of the transmission, through a manual gearbox, in order to achieve the right results to get a bonus.
“We do not award it on the straight fuel consumption of a driver because there are too many variables – types of truck, types of load etc. But by simply looking at four areas we can reward them for behaviour which saves fuel,” says William.
Stobart has the contract to move the Mercedes-Benz Formula One team around the world. It has 24 dedicated trucks for this, all of which are Actros prime movers. When not involved in the Formula One work, the trucks are integrated into the general haulage fleet.
The company also hauls all of the Pirelli tyres used by the Formula One teams in the competition. This involves another 16 vehicles carrying tyres to the various Grand Prix events as they happen.
To improve efficiency, Stobart is also beginning to utilise railway, currently running four trains. Intermodal is becoming a larger part of the business, and is used for part of the Tesco supermarket distribution contract. A fully loaded train of containers leaves Crick, in the middle of England, every day at 6am and arrives in Glasgow, Scotland at 3pm. Supermarket deliveries for the Glasgow and Edinburgh area are then delivered directly by road before goods for the rest of Scotland continue north on a train to Inverness where they are distributed by truck around northern Scotland.
Trucks owned by Stobart are maintained on a repair and maintenance contract with the truck manufacturers, enabling the company to precisely predict the cost of each vehicle, which are all turned over every three years. Trailers are replaced every five years but are purchased with a form of guaranteed buyback, and trailer maintenance is handled by the company’s own technicians.
“We have an academy, based in Widnes, Lancashire, into which we bring 18-year-olds where they are trained in all aspects of the business,” says William. “By the age of 20 they will have a license to drive a semi-trailer, having spent six months on the road with a driver. We also have a simulator on site. We need good well-trained drivers who also understand all of the systems we have in the cab.
“The whole thing about the Eddie Stobart Fan Club does help with recruitment and has caught the imagination of the general public. You have to feed that, which is why we have things like the TV program.”
Any further growth of the company is going to need an increasing workforce. The company is also expanding into ports and airports as well as a fast growing biomass buying and distribution business. At the same time it is becoming a logistics provider, adding warehousing to its existing transport contracts.
“You reach different stages as your fleet grows,” says William. “We have reached 2200 trucks and it is a bit of a plateau for us. The next step is to go up over 3000. At the moment, in the UK, the large logistics companies who rely on smaller subcontractors are finding it difficult as subcontractors disappear. With a price per load, it means if a customer’s volumes drop then their costs also drop.
“We have seen a lot of interest and enquiries coming from Central Europe. So our next move is probably into places like Slovakia, Poland and the Czech Republic. Many of the big retailers have seen a lot of growth in that area. We are going there with our existing customers. If they want to go to systems like just in time and include primary freight, they need our kind of systems.”