Red Star 'could have made profit' this year – Lynx still confident in rail
Lynx Express remains committed to rail despite last week’s closure of the Red Star operation it acquired in 1999.
Together with TDG and GB Railfreight, the company is part of the Minimodal consortium which won £1m ( t1.6) in last year ‘s Strategic Rail Authority (SRA) competition designed to stimulate and incentivise innovative thinking about rail transport.
The partners hope to develop a high-speed train to carry parcels in specially designed containers between London and Scotland, taking trunkers off the roads. MD David Burtenshaw said: “Minimodal is still in the development stage but we are still supporting it.
Our confidence in rail is not shaken.”
At the time of the acquisition, 75% of Red Star ‘s revenue was next-day road delivery. “They were struggling to sell sameday, ” said Burtenshaw. “But the benefit to us was as a same-day carrier: it was clear we should concentrate on same-day by rail and next-day by road.”
Lynx shut down 60 parcel points – peripheral locations where only a handful of parcels a month were going through – and restructured around major towns and cities. “We ended up as an 80-point network whose services we were confident we could sell, ” said Burtenshaw.
“We invested in the call centre at Stevenage and put some of our best sales people in. We were starting to see improvement and the market was beginning to recognise rail as a viable option.”
Red Star ‘s same-day turnover – road and rail combined – was £5m ( t8.2) at the time of the acquisition and Lynx had grown it to £7m ( t11.5) late last year. “It could have become a profitable business this year. But then Hatfield happened and customer confidence deteriorated overnight, ” said Burtenshaw.
After the crash, Lynx approached the SRA requesting a grant to keep the operation going through the next year, but was turned down.
Lynx will keep the roadbased business, operating it under the Lynx Sameday name, and said it had offered jobs to every Red Star employee.
“There are 100 vacancies in Nuneaton thanks to increased overnight business, and more around our network, ” said Burtenshaw. At the suggestion of the union of Rail, Maritime and Transport Workers, Lynx also contacted rail operating companies and he said they had also shown interest in employing some of the 250 affected staff.
Posted: 28/05/2001
