Back in the New Zealand Rail days, the Railways thought they were in the railway business. They thought they had no competition and they were wrong. They were actually in the transportation business and their competitors were trucking companies. For passengers the competition was bus companies and then airlines.
In business, knowing what business you are actually in is critically important.
Finally though, with new management, Kiwirail have sorted this out. They are not in the transport business or the railway business. Now their competition is static walls as they compete for taggers.
Not really true, but maybe a good idea for Jim is to run a competition for taggers to ‘beautify’ the Huntly coal wagons and them arrest them all afterwards.
Another day. Another trip to Auckland.
This from the NBR last week;
Road transport haulage operators have been given a clear message by a High Court Judge: Overload your vehicles at your peril.
In a reserved judgment handed down at the High Court in Hamilton, Justice Lyn Stevens said the country loses $100 million a year in unpaid or under paid road user charges.
The judgment entirely debunked a widely held transport industry belief that enforcement officers allow a five percent weight tolerance over and above the licence purchased.
Justice Stevens made his comments in the case of Mt Maunganui transport operator TD Haulage which was appealing a District Court assessment that the company owed $1.215 million in short paid road user charges.
In the end, it is not known what TD Haulage was required to pay to settle the matter because a confidential settlement was reached been the parties during the appeal. But Justice Stevens closed the case by delivering a judgment anyway, using it to sternly warn the industry of its shortcomings.
Below is a brief video that Agoge Training has made to summarise the changes in Logbook and Work time rules effective 1 October 2007. If you would like a free high quality copy please contact Jim on 0800 42 46 43.
As of 1st of October some of the rules around work time and logbooks are changing considerably. These changes will affect most transport companies at some level. Below is a summary of the changes and when they take affect.
Work time and logbooks
- From 1st October 2007, instead of recording ‘on-duty’ time and ‘driving hours’ separately, all time spent working must be recorded as ‘work time’.
- Drivers must take a break of at least 30 minutes after 5.5 hours of ‘work time’, regardless of what kind of work they were doing.
- In any 24 hour period drivers can work a maximum of 13 hours then have to take a break of at least 10 hours.
- Drivers can still work up to 70 hours before they must take a break of at least 24 hours.
- Failure to produce a logbook can result in a fine of up to $2,000/individual, $10,000/company, and 35 demerit points.
Chain of Responsibility
Employers or those that control drivers can face fines of up to $25,000 if they knew, or should have known, that a driver under their control did, or was likely to, breach work time provisions.
- 1st October 2007 – 2 new logbook formats released (general and taxi), and all work time provisions become law.
- 1st April 2008 – All existing logbook exemptions expire.
- 1st July 2008 – Only new format logbooks may be used.
Last week I attended a presentation by the Road Transport Association about the changes in log books.
IT WAS BORING!
Now an important disclaimer: This is not a criticism of the RTAs intent. They genuinely desire to have a positive impact on the industry and the logbook rule change is really important.
The presentation was boring. The power point presentations were too long. They read straight from the slides, didn’t paint pictures, tell stories or sell the changes well.
And to top it off there were the grumpy old truck drivers there who thought it was a good time to relitigate the law. Not the RTAs fault but they should have shut them down.
Fortunately, with the exception of a couple of people I was with, there were no Gen-Y there. They would have been bored silly. They would have thought that the transport and logistics industry was boring, stayed and unchallenging.
Based on what they saw last week. They would be right!
If we are really to compete for talented, energetic, young people, we need to start being a heap more upbeat and edgy and passionate.
Not slowly, but now!
Express Couriers which is the joint venture between DHL and New Zealand Post, has completed the acquisition of Roadstar on the 1st July.
There overall goal in the acquisition seems to be to increase their service offer into multi-package and
“Customers are demanding we offer a full range of services including their multi-package and palletised product” says Jim Quinn, CEO of Express Couriers Limited. “We are delighted to have secured the Roadstar business to achieve our growth aspirations, and meet those needs” he added.
As a signal of the desire to ensure this new ownership is a success, Grant Robertson and the management team of Roadstar have agreed to remain with the business. Both Grant and his team continue to be passionate about the business and the industry, and are delighted to be part of a new ownership that shares this passion.
It is self evident that they will be seeking some synergies, and Roadstars branding is already changing. Even within the last week small changes have taken place in the CourierPost business to take up some of these synergies. I suspect you will see ECL move quickly to gain any synergies as I know they learnt a lot from the purchase of Ansett Couriers and XP couriers of old.
Freightways has purchased MSS Records in Christchurch for $1 million dollars. It intends to merge the operation into its Online Security Services business.
“Inclusive of synergies gained by merging MSS into Freightways’ established Archive Security business, incremental EBITDA of NZ$0.3 million is expected to be achieved in the 2008 financial year from MSS.” [Freightways Media Release]
My read on this is that incremental means once the synergies are achieved. Synergies generally save money, so it is safe to assume that the EBITDA (operating cashflow) was lower.
This causes me to wonder what sort of multiplier Freightways paid for MSS against its existing EBITDA.
If the MSS EBITDA was
250k it would have been 4
200k it would have been 5 (my random blink would be this one)
Once they get the synergies (which Freightways will) it becomes a 3. Not a bad buy, one less competitor and 3 years to repay the investment.
Freightways said it is looking for more acquisition opportunities.
Well NZ Rail, come Tranz Rail, come Toll NZ will finally disappear off the NZ Stock exchange.
Toll purchased 10% of the shares from a New York based fund and can now undertake a compulsory takeover of the remaining 6% of shares in the company for $3 per share.
Toll originally tried to gain compulsory acquisition when it took over at $1.10 per share and has withheld dividend payments over the last 2 years.
The parent company Toll Holdings in Australia has indicated it may duel list its shares from Aussie on the NZX.
It is another lose to the New Zealand Stock exchange who appear to be having more delistings than listings this year. It is also a loss to New Zealand as yet another huge company will see its dividends sent off-shore.
Toll is the operator of the largest rail, road and ferry business in NZ.
I have been following 11 different companies that are in, or fringe the supply chain and agoge's business. This is a basic index of the average share value (Total Capital / Total Shares).
I will try and up date it every few weeks. We will see what happens.
Statistics NZ released there latest employer-employee data last week. He are some interesting numbers I have discovered:
The transport industry had a 14.4% turnover for the year to March. This is down slightly on the same time last year which is 15.5%. For the wholesale trade (which includes many distribution centres) turnover is 13.3%
Looking at the stats it is interesting to see that the June Quarter is actually the highest turnover period for the supply chain industry and historically rises to around 17% for transport and 15% for wholesale. Time to keep a close eye on the your staff.
Number of workers
The other fact I found interesting was that since Mar 2002 (when agoge launched) work numbers in this transport category have increased by 15% from 61,000 to 71,000 people.
Workers in the wholesale industry have increased 14% from 96,000 to 110,000.
All in all a growth industry! While it would be nice to reduce the staff turnover I suspect that this will continue to rise. People are no longer committed to long term employment and will move jobs more frequently than ever.