Parcel business flourishing in remote areas

Abenefit of the many tentacles Deutsche Post has in the freight forwarding and parcels market was that Securicor Omega Express was able to take over the lease at a former Danzas facility close to Dublin airport last year when the Irish operations of Danzas, AEI and ASG were consolidated.
Although there is no direct trading relationship, general manager Garrett Thornton says that thanks to a group Internet tool, "we are aware of what's happening elsewhere in the group".

Relations may grow closer at a day-to-day operating level in future.

Meanwhile, Securicor runs pick-and-pack and parts bank operations from its new 1,800sq metre unit and uses it as a next-day parcel distribution facility for the north side of Dublin. The main hub is west of the city at Ballymount, where the company sorts 25,000 packages a night.

Around 10% of Securicor 's business comes from regional couriers or international operators which need allIreland coverage. The company collects and delivers for air freight companies, such as Airborne, and works for FedEx in 25 of the 26 counties of southern and Northern Ireland, excluding only Dublin.

"There's no conflict of interest if we use our relationship management skills properly, " says Thornton. "We're not predatory – we're not going to go after the small courier 's customers at less than five packages a day. We don't mind carrying for them but we don't have the sales people to service it ourselves.

"A number of companies have come in and worked hard to develop the market, but we would be the largest privately owned parcel carrier in Ireland. SDS [owned by the Irish post office], Interlink and ourselves probably have 75% of this business, " he says.

"TNT is focusing more on air freight. FedEx had its own network before 1992, but now has a single office and uses us as its general service partner for Ireland.

"Having a vehicle in Donegal to do a delivery in the morning and to make a collection in the afternoon is important – the branding of the vehicle is not an issue.

The multinationals have long been represented by others.

This market is more mature than a lot of other countries in that respect, reflecting the need to have vehicles serving areas such as Donegal." Securicor has 11 of them, out of a total fleet strength of 265, and opened a branch in Letterkenny in February 2001. "It's mind-blowing the expansion that's gone on there, " says Thornton. "There are developments all round town – new government departments, shopping centres, sports facilities.

"If we want to stay successful in Ireland, we must invest in infrastructure and make sure people on the west coast can get their product to market easily. The competitors make big claims but it's all ex-Dublin, or at least east coast.

"We access some of the remoter parts of Ireland – that's where our business has flourished. For example, we can pick up in Connemara at 4.30pm and the shipment can be in Germany in three or four days. That might be crucial to a small jumper knitting enterprise. They can look at the website and see exactly where it is." Thornton manages all Securicor 's business in Ireland except logistics, which is run separately from a facility in Damastown, north of Dublin. Next-day business is "quite healthy, " he says, but the fastest-growing sectors are same-day and international.

He is undaunted by the slowdown in the Irish economy. "There had to be a dampening. But we plan in three and five-year modules and our business plan has not changed. We've sustained our volumes and we are going to achieve our business plan." In addition to Letterkenny, a depot was opened in Athlone last year, and Tralee and Waterford will follow by the end of next year.

Overall volumes have increased by more than 10% over the last year and Thornton says this was not achieved at the expense of margin. "Price improvements have been on the back of service level – the investments we have made in customer automation systems, premises and so on." Securicor claims to have been the first to offer online track-and-trace and he promises in-cab technology over the next year. "It will mean customers can rely on what they're seeing on the website. They will have live data." An interesting feature of the Irish market is that most customers are satisfied with guaranteed next-day service rather than a time-specific delivery. "There is no market for services such as pre-9am – it's just 'as early as possible'. But 80% of our deliveries would be pre-noon because the vehicles are mostly used for collections.

We operate there and back now, not on a round-robin basis, " Thornton says.

The Working Time Directive means "bringing some imagination" to the way Securicor works, but it is already on a four-day week and operates some routes on a two-driver basis, for example delivering in Sligo and then going on to Donegal.

Performance-related pay was introduced last year. "We had ISO, quality managers and so on in place, but now we've got the driver – the whole organisation, " Thornton says. "We don't have to 'manage in' quality. It has brought people closer to the business. We now get drivers bringing in sales leads." Overheads continue to increase sharply, including insurance and wages. Last year 's 7.5% pay award has been followed by a 5.5% – plus-1% formula this year, but Thornton remains in favour of the system.

"Central wage negotiation has been one of the biggest benefits to Ireland since it came in, in the late 1980s, " he says. "Managers spent a lot of time negotiating before then – time that has been freed up to allow businesses to become more innovative.

It's generous in terms of the amount paid, but we don't have the industrial relations distraction." Securicor instead prefers to add value, carrying out pick-and-pack for a variety of customers. Cosmetics, for example, are packaged in wicker baskets ready for point of sale. Parts banks at Dublin plus another three of the company's 11 locations support IT companies and the banking community's automatic cash dispensers.

A one-off operation – but a massive and critical one – was the supply of 700,000 tonnes of euro coins between August and December.

Securicor is still making final deliveries, and is in the process of collecting the former Irish coinage. "The fact that you haven't heard more about it is a testament to the success of the operation, " says Thornton.

"This is an organisation that can react to major requirements."