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HOT IL COLE,
Whatever the economic climate, people have to eat. But is the controlled-temperature sector recession proof? If nothing else the millennium celebrations should be good for business. But are escalating equipment costs and complex legislation driving operators out of this sector? CM has been taking the temperature of the market.
In controlled-temperature transport there is one factor which is crucial to business success or failure: time. When you are carrying a load of perishable goods for one of the UK's major supermarkets—the "Big Five"—there is simply no room for error.
Tim Wilkins, managing director of refrigerated haulier Blakes, stresses that effective time management and investment in the right equipment have been invaluable to staying profitable in the refrigerated transport sector.
Inside Brakes' 3,900m2 warehouse in Alcester, Warks, the temperature is always 1°C—the company doesn't carry frozen food. A team of 35 works a three-shift rota preparing pallets for distribution from one of the 15 loading bays.
Some loads that arrive at the warehouse are quickly moved on to the supermarkets' regional distribution centres (RUCs); others are stockpiled awaiting orders.
Blakes delivers 95% of the supermarkets' products; the rest are collected by the supermarkets' own trucks.
"We carry the whole range of diary products—everything that the housewife uses we will carry," says Wilkins. "Hygiene is important. Every vehicle is washed externally once a week and internally once a day." Biakes has also installed a generator to power the site and save its stock of food in the event of a powercut Business development manager Ian Evley says: "It's all about being at the right place at the right time. We also invest in whatever we need to get the job done. We must be reliable. Our work is time sensitive—specific products must be delivered at specific times. Time is absolutely critical in this type of work; ultimately we are serving the consumer."
Late load
Deadlines are a fact of life for all hauliers, but in controlled-temperature distribution a late load may cause a customer to walk away from a supermarket, perhaps for good; and of course food products have a limited life.
As Evley explains there are also two critical periods in the working day: "Stores have two different cycles, one in the morning and one in the evening, People buy different things at different times of the day."
Catering for such a market is practically an art form. "This supply chain is probably one of the most advanced in the UK," he adds. "We are talking about hours and minutes—not even half days."
Evley Eases with buyers and logistics llo•
ill experts from the Big Five—Tesco, Sainsburys, Safeways, Somerfield and Asda. Communication is vital in the movement of chilled goods from the supermarkets' RDCs to the hauliers' warehouses and finally to the stores.
Evley says that the supermarkets can be demanding, "but we are never negative. The RDCs are under constant pressure; our job is to make sure that we can support their objectives so that they can get the goods to their customers."
His face becomes very serious at the mention of the word "stock out" —the nightmare scenario when a food distributor runs out of stock and is unable to serve the supermarkets. It is a phrase calculated to strike any controlled-temperature haulage manager with dread. But with foresight and effective communication it should never happen.
'lb serve the RDCs on a national level Blokes also runs warehouses in Redditch, Warrington and Airdrie. A fleet of 85 trucks haul refrigerated food between the RDCs, the warehouses and the supermarkets.
Asked to predict what 1999 has in store for this sector Wilkins pulls no punches. "l think that it will be a difficult year," he says, citing the fuel tax escalator, increasing traffic congestion and the Working Time Directive. And while food is the most basic need there is, he fully realises that even this sector is not reces sion proof an economic slump would hit the supermarkets, and ultimately the controlledtemperature specialists which serve them.
Potential hassles
Given the potential hassles of working in refrigerated distribution, would Blakes ever consider branching into other types of haulage? Wilkins is adamant that there will be no change at the firm: "We are very focused on the business that we have," he says. "We have no need to diversify."
Blakes was set up in 1924 as a general haulier. From the 1930s to 1987 it transported milk, before concentrating on chilled food distribution. Now that the firm has the necessary equipment—including the warehouse chain and a fleet of 140 refrigerated trailers Wilkins points out that there would little point in getting involved in other enterprises.
Conversely, this need for specialist equipment means that smaller hauliers cannot afford to compete effectively in the controlledtemperature distribution sector.
"The capital expenditure is too much, Wilkins warns. "People starting up should think carefully"
H by Tim Maughan.