It was not a good weekend to be stuck behind a lorry. From Bristol to
Cheshire, truckers took to the road, applied the brakes and drove as slowly
as possible, in convoy, in a glum protest against soaring diesel prices and
a looming increase in fuel tax.
Normally, the green livery of Eddie Stobart would be among the most common
sights driving up and down the M6, but not on Saturday, not during the
go-slow, anyway. Stobart's lorries did not take part. It was, the company
decided, not its battle. It doesn't see the point in demanding a
postponement to the 2p fuel escalator tax, the protestors' primary demand.
“Gordon Brown stopping 2p for a year does not solve the issue,” Andrew
Tinkler, the chief executive of Stobart Group, said. “We have to get to the
bottom of why oil prices are soaring. The whole world has to get together to
sort this out.”
But Mr Tinkler does have a solution, he thinks - and the chief executive of
Stobart Group is aiming as high as he can in an attempt to put it into
place. “I need to talk to the Government about my plan to take 7 per cent of
the trucks off the road ... I'm talking to the Department for Transport, but
I want to see Gordon Brown himself,” he said. “I understand the pressure he
is under with these fuel protests and I think I can help him.”
How? Make the lorries a metre longer, with a second steel axle near the rear
of the trailer so that they have the same turning circle as the existing
13.5-metre trailers. And there would be, as a bonus, no need for road
widening. Sounds simple, when you say it like that.
If Mr Tinkler is well aware of the threat posed by higher fuel prices - small
hauliers will go bust if fuel stays at this level, he believes, and
consolidation is inevitable in an industry where margins can be as small as
5 per cent - he is less concerned by the current Shell tanker drivers'
strike. Stobart Group has at least a fortnight's worth of diesel put by.
Yet although that approach to business sounds efficient and forward-thinking,
that would be slightly to underestimate the Stobart Group. Its mantra,
established when Mr Tinkler bought the business in 2004, has been applied
rigidly ever since. It is simply this, he says: “Our whole model is about
taking waste out of the industry. I hate waste.” Stobart's survival
strategy, in an environment in which oil prices have doubled in a year, is
ruthlessly to pass on the increases to its customers. Each week, the extra
cost of fuel is passed on to businesses such as Coca-Cola, Nestlé, B&Q
and Tesco, for whom Stobart transports goods. Had it not done this, Stobart
Group's fuel bill would have increased by £27 million in the past year,
according to Mr Tinkler. To put this into context, the company's pre-tax
profit for 2008 stood at £3.5 million.
The second part of the haulier's business model is to fill up its 1,100
lorries as much as possible. In the past, retailers and manufacturers have
contracted dedicated services from hauliers. Stobart offers clients the
chance to share trucks with other customers, cutting their bills and the
impact on the environment.
“Our whole aim is to reduce empty legs,” Mr Tinkler said. Utilisation is
running at 83 per cent, compared with the 50 per cent rates of some
competitors. The goal is to get the utilisation rate up to 90 per cent.
Finally, journeys are costed stringently and divided into fixed and variable
costings, so a customer can see exactly what its money goes on. If the
customer can reduce the time that a Stobart lorry spends at its site,
waiting to be filled, it will be rewarded with a cheaper contract.
“It's a pay-as-you-go model, but the secret of turning this business around
was to make sure that risk was appropriately allocated,” Mr Tinkler said.
Mr Tinkler's connection with the Stobart family goes back to childhood. He and
William Stobart, the chief operating officer and son of Eddie, have known
each other since they were 15. Their parents were friends through church in
the small Cumbrian town of Kirkby Stephen, where they lived. Their
friendship was sealed when they married sisters.
As a teenager, Mr Tinkler washed and painted Stobart trucks for pocket money.
In 1987, he set himself up as a joiner with £500. He bought a van and
painted joiner/building contractor on the side. His lucky break came on his
first job, where he was fitting doors in an old people's home. He was asked
by the main contractor if he would take on the building work.
Mr Tinkler was no builder, but, undaunted, he found a couple of builders to
help him out, labouring during the day and working on the books at night.
The job turned out to be worth £400,000.
From there he developed WA Developments, which focused on civil engineering
and railway infrastructure. In 2004, Mr Tinkler and William Stobart bought
Eddie Stobart from William's brother, Edward. The company was weeks away
from going bust, after posting its first loss in 2001 - in part because of
the soaring price of fuel.
Last year, the company listed on the London Stock Exchange after reversing
into Westbury Property Fund. In March, further loose ends were tied up when
Mr Tinkler and Mr Stobart sold the loss-making WA Developments to Stobart
Group for £10million. At the same time Stobart bought Irlam Group, a rival,
for £59.9 million. It has also taken an option to buy Carlisle airport, also
owned by Mr Tinkler and Mr Stobart, for £15 million.
These moves have formed the basis of what Mr Tinkler says will be Britain's
leading multimodal logistics company. Eddie Stobart no longer wants to be
just the king of the road, but the king of rail, water and the airways as
well.
There are ambitious plans to develop The Port of Weston at Runcorn. Stobart
Group is now the harbour master and has the go-ahead to develop the site. By
connecting it to the Manchester Ship Canal, Stobart believes that it can
begin to develop a viable inshore freight-shipping business. The company
already has a rail service, powered by Eddie the Engine, primarily used by
Tesco, which transports goods from the Midlands to Scotland five days a
week. It is in negotiations with Network Rail to open up more dedicated rail
freight routes, which would be shared, like its lorries, between customers.
The group is considering financing options to bring these projects to life
and, despite the credit crunch, is confident that investors will be keen.
“It's all about reducing our carbon footprint,” Mr Tinkler said. “We have to
get our customers interested, but if oil remains at these levels I can't see
how they wouldn't be.” For a man who admits that he flies around the country
a couple of times a week in a private jet to see his staff, it could be
argued that he is laying the carbon footprint stuff on a bit thick. Does he
really believe in going green?
He looked slightly embarrassed at the question. “I hate waste,” he said. “I
try to turn the lights off as much as anyone, but you can't turn them all
off then trip over and kill yourself.” And, he admitted, he does drive a
gas-guzzling, four-wheel-drive Mercedes. “I travel so much I have to be
comfortable. But I will be paying a higher licence on that.”
Mr Tinkler, with his stylish suits and Dolce & Gabanna shoes, is not a
typical trucker. Indeed, he looks a bit of a dandy - but he comes from a
church-going family and is closely involved with his local community.
Stobart Group sponsors local sports teams and sports events - from rallying
and motorcycling to football and rugby league - and Mr Tinkler has put £2
million of his own money into two city academies in Carlisle.
“I was never much good at school, but I realise now education is so important.
I want to show those kids that they can get on and go to university and be
entrepreneurs, if that's what they want. You have to develop your
foundation. The more you can give back to where your roots are, the more you
can get people to work for you.”
Those roots remain in Cumbria, where the Stobart story began with the
eponymous family firm. A generation on, they maintain the link with
England's North West that keeps Eddie Stobart's green lorries heading along
the M6.
CV
Born: July 1963
Educated: Kirkby Stephen Grammar School
Family: Separated, two teenage children
Career: Started as a joiner in 1987. WA Tinkler Building Contractors
became WA Developments in 1993. The civil engineering firm added railway
infrastructure to its activities in 1997. In February 2004, WA Developments
acquired Eddie Stobart and Mr Tinkler became chairman. In October, 2007
Eddie Stobart acquired Westbury Property Fund through a reverse takeover and
Mr Tinkler became chief executive of the listed company
The leader questioned
If you could change one thing in the financial and commercial environment,
what would it be?
Someone has to get control of the oil. Politicians have to step in all over
the world because inflation will cripple the world's economy
Who is or was your mentor?
No one, really. I've copied some things from some people
Does money motivate you?
No - it's nice to have, but it is all about the satisfaction of your job
What was the most important event in your working life?
When we took over the Stobart business, which was losing £10.5 million a year,
and had to turn it around
What gadget must you have?
Mobile phone or e-mail
What does leadership mean to you?
It's about directing people, risk-assessing the direction they're taking, but
letting them get on with the job they've been given
Which business person do you most admire?
Sir Richard Branson
How do you relax?
I own four racehorses, which train at Darlington. I follow our rally drivers,
Carlisle United FC and Widnes Vikings, which Stobart sponsor. I'm interested
in fashion and I have my own style. Having the right clothes gives you
confidence
Behind the story: who was Eddie?
Eddie Stobart, a strongly Christian Carlisle man, began the family firm in the
1950s as an agricultural business in Cumbria.
By the 1970s the company had expanded into haulage and began to build a
profile as Britain’s leading independent. The haulage company passed into
the hands of Edward Stobart, the third of Eddie’s four children. By 2002,
with more than 1,000 lorries on the road, the company was facing problems
because of the high cost of fuel. It posted its first loss and in November
2003, Edward sold it to his younger brother William, who later sold the
business to WA Developments, a rail infrastructure group.
William remains chief operating officer. The tradition of giving lorries
female names continues today. The first four Eddie Stobart owned were named
after singers — Twiggy, Tammy (Wynette), Dolly (Parton) and Suzi (Quatro).
