Resilience in practice
When we first featured Multimodal Logistics in our magazine at the beginning of 2018, we defined the past three years of operation for the shipping and transportation services provider as ‘eventful’. Well, having got in touch again with the company’s General Manager Tim Wray to find out how the last 12 months have unfolded, it is now safe to say that the last FOUR years have been abundant with challenges and opportunities alike, keeping Multimodal busier than ever.
“Throughout almost the entire first half of the year, we had constant problems with the weather, mainly due to the Beast from the East, which led to port closures and volume fluctuations. It was only after May that we started to see a regular operational route,” Tim begins. “The summer and the autumn did not prove less challenging, either. As a result of infrastructure changes at our local port in Felixstowe, the availability of containers was affected, which disrupted the operation further. Then, in early autumn, we had peak volumes arriving into the UK and a reduction in haulage resource available. Put together, all these circumstances made 2018 one of the most challenging years I can recall.”
In spite of the difficulties, Multimodal still managed to increase its turnover significantly, compared to 2017. “We were certainly projecting good growth for this year and we succeeded in hitting all of the financial targets we had set ourselves. What is even more encouraging is that we have a very positive outlook for 2019, when we expect to grow at a similar pace, if not faster,” Tim holds. In addition, the company is seeing a 50 per cent growth on the third-party logistics side of the business – an objective the General Manager defined when we spoke in February.
Reflecting on the reasons that have led to Multimodal’s successful financial performance, Tim distinguishes the extension of the business’ customer base as the key contributor to its growth. “Adding two or three new accounts has allowed us to increase our haulage resource to service the business. We have established successful relationships with owner drivers and small operators, which has enabled us to increase our turnover and therefore, improve our margins.”
Undoubtedly, issues will still be present for the whole logistics industry in 2019, as multiple factors come into play. “First of all, I do not think that the pattern followed by the industry is an accurate reflection of the actual market,” Tim notes. “It is true (in my view) that a lot of people are stockpiling cargoes, because nobody knows how the Brexit situation will unfold. Nevertheless, we remain a nation of consumers, so goods still need to be moved ongoing from the ports to the warehouses and then to the end customer.
“What has become an even more acute problem in the past 12 months, is the shortage of good and reliable UK drivers,” he reveals. “This is a very significant topic at the moment, as providers are starting to fight for the same limited number of drivers. In order to attract the right drivers, you have to engage with them and offer conditions that will satisfy their requirements. Of course, pay matters a lot and we are seeing an increase in the rates for drivers, because this is how the market works – where there is low availability of professionals, wages go up. This trend changes the playing field for us to a degree, so we have to adjust our business model to cope with it.”
During 2018, Multimodal’s own vehicle fleet has remained stable, but the company is planning on growing the amount of vehicles in 2019. “This will be one of our main activity areas next year,” Tim projects. “We have had a successful 2018, thanks to partnering with new subcontractors and using the rail network as much as we were able to. To take the next step on the growth path, however, we should invest in our fleet and we are already examining our possibilities in the area.”
Pursuing constant development seems to be the only way in which a company can navigate tough times and this is precisely what Multimodal is determined to do, in 2019, as well as in the long-term. “Our services will continue to be needed, there is no doubt about that. For us to be an efficient service provider, we have to stay as close to our customers as possible and do our best to understand their needs clearly. Thence, it is about agreeing a package that will simultaneously satisfy customers’ requirements and allow us to operate at a reasonable profit. It can be said that we are looking for growth and we are looking for the right people to achieve it with,” Tim analyses.
“I am confident that we have every opportunity to grow to a medium-size logistics supplier in the next five years.
We have the support of our sister companies within the group we are all part of, which means that we can potentially explore other types of businesses in the logistics sector, depending on how these will develop over time. We have no restrictions on what we can get into, so I am really optimistic that Multimodal’s growth will be consistent in the coming years,” he concludes.
Increased turnover in comparison with 2017
Extended its customer base in 2018
Planning to expand its own vehicle and subcontracted resource in 2019 and beyond