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FREE SPIRITS
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All the benefits of a national parcels network without the bind of joining a franchise network? That's what Phoenix Express offers the small operators it recruits.
• A parcels carrier is attracting a growing number of local hauliers onto its books by offering them access to a national distribution network without the need for either a joining or franchise fee.
Operators who sign up with Manchester-based Phoenix Express are given their own territory, and are allowed to set their own charges and go for business under their own names.
They can even decide whether to send a consignment through Phoenix's system — for which they must pay a fee and trunk into its Birmingham hub — or take it direct to the destination themselves.
The company, set up eight years ago, launched its network in 1988. It now has 33 agents, with depots from Glasgow to Cornwall, and wants another 20, These will either split existing territories with present operators, or work under them as a sub-agent, using their premises.
Phoenix makes its money from charging agents who use the hub — usually about 35% of what the customer pays. Parcels are then sent to their delivery point on each agent's returning vehicle, one of which arrives in the Birmingham hub every night.
Phoenix, which in turn pays agents for each delivery, runs two of the local depots itself, in Milton Keynes and Heywood. The company, which has its own fleet of 30 liveried vehicles, will take over the West Midlands territory soon.
Unlike franchised systems, Phoenix agents run independent businesses, explains general manager Steve Travis.. However, he is keen to establish a stronger corporate identity across the network.
At the moment Phoenix agents can use the company name or ignore it altogether. Few are dedicated to Phoenix: the biggest runs 50 trucks, less than five of which only carry Phoenix consignments. Some smaller operators depend much more on Phoenix business, explains "Fravis.
Parcels going from one territory to another arrive at the hub between 20:00 and 23:30hrs. They are given a routeing code and sent on between 00.30 and 03.30hrs. Next-day, two-day and threeday deliveries are offered.
Part of the arrangement with Phoenix is that agents delivering to another depot must meet these deadlines. If an agent has to collect for a colleague, he is paid by Phoenix, which, in turn, charges the company whose customer it is. A computer system is being introduced which Travis says will make this invoicing easier.
There is no legal contract with agents — simply an informal deal — but Travis is working on one: "We work on the principle that we don't want agents who don't do the job properly, and — at the moment — this works well enough," he says. Agents have been dropped for not meeting standards.
Travis, who joined Phoenix in October after five years with Elan and a short period with Federal Express, has had about 25 enquiries from hauliers since Commercial Motor ran a story in January explaining its expansion plans. "It's self-perpetuating. Operators we speak to tell other companies," he says. He has just taken on three new agents. Although the company does not provide recruits with vehicles or financial help, Travis will spend two days with them going through how he wants them to run their business.
Keeping a local identity was the major attraction for Manor Transport of Droitwich, which joined Phoenix's network in November and covers Worcestershire.
The company, which was with Connect UK until early 1989, is virtually dedicated to Phoenix, sending 100 consignments a night through its system. It runs six vehicles, including one 7.5-tonne Roadrunner — its biggest — and has a staff of five. What set it against franchising was the outlay and the problems franchisees in other networks had with payment. "We talked to some companies which had very bad experiences," says sales manager Steve Dennis. Many new franchisees go into parcels without knowing anything about the industry, adds Dennis, who has worked for 14 years with Parceline and National Carriers. He reckons his company retains at least 40% of its revenue after charges for use of the hub and delivery by another agent have been made.
For haulage company Teamhawk of South Shields, becoming part of Phoenix will mean it can save money on its growing small-consignment business, believes sales director Steve Gallagher.
Until it joined the network four weeks ago, it was obliged to trunk non-profitable parcels for its clients nationwide to avoid losing their cost-effective full-Load and groupage work. You have to deliver what the customer wants. If you don't, you miss out to your competitors. Our clients were asking for small parcel deliveries, and we ended up taking full-loads in one direction and a few parcels in the other. Unfortunately, you have to take the good with the bad," he says.
EXPERIENCE
The company won the Tyne & Wear, Northumbria, Cleveland and Durham area from a smaller haulage firm. Phoenix's major plus over other networks was the fact that it had been around a while and had managers with experience in the parcels industry, says Gallagher.
He expects that Phoenix business will eventually account for about half its profits. Tearnhawk has 18 vehicles. One artic goes to the Birmingham hub every night. "We keep about 50% of our revenue after paying for the trunk," he says.
Phoenix was founded by Peter Crossway eight years ago, but until Travis joined it was based Largely in the North, doing direct deliveries for customers elsewhere in the UK. To compete with other carriers on service, we had to get a network together," he says.
Crossway had sold an earlier firm. Evancrest Transport of Bradford, to TNT in 1979, and had been forbidden to reenter the industry for two years. He chose the name Phoenix because "I was rising out of the ashes".
Now he too is keen to give the &2.25 million-turnover firm a bigger profile, possibly by encouraging more agents to market themselves partly as Phoenix. Its plans include a joint venture with a European parcels carrier.
"Within three months we want to be operating with another organisation throughout Europe," says Travis. "We'll start off cautiously, but we could have an arrangement to trunk parcels for Germany to a company with a hub over there."
El by Murdo Morrison