The power of networks key to the future of Farrall’s Group

Matthew Farrall has been joint MD of Farrall’s Group since June 2019 and is the third generation to take charge of the family firm, which was founded in 1956 in Chester, joined the Transport Association (TA) in 1996 and was a founder member of Palletforce in 2001.

After leaving school, Farrall spent six years in the family business in a variety of roles, going on to gain experience with Hoyer, Palletforce, Hellmann and Gwynedd Shipping before returning to the fold in 2008. He graduated from the University of Huddersfield with a first-class degree in logistics and supply chain management in 2018.

“Both Palletforce and the TA symbolise the values that Farrall’s holds as a business,” he says. “We treat everyone as family and think long term.

“The last five years have been challenging with Brexit and Covid but we have always looked to protect ourselves for the long term. Often opportunities have come across our table for a quick win but we always put longevity first. My dad and grandad both did 30 years; I plan on the doing the same and hope my children will too.”

After a “great year” in 2022, Farrall’s found 2023 much tougher.

“We did alright, as a lot of reputable businesses did, but a lot of less reputable operators that did not have the same strong foundations fell by the wayside,” says Farrall. “That has created opportunities and we have had to evaluate which opportunities to take as we can quickly end up like them by taking on too much.

“We have a set of criteria for any potential acquisition before we would even consider taking it on. It has to own its land and the majority of the kit has to be owned and fairly modern. It is vital to stay on top of the fleet.”

Perversely, customers who are looking for replacements for the hauliers who went bust still expect to pay the same rates that pushed their previous contractor into administration.

“We will never drop our prices,” insists Farrall. “Are we sometimes too expensive? Yes but I value our service and we can then pay our staff the right wages. Our view around the board table during Covid was ‘people over profit’ otherwise we weren’t going to survive.”

Farrall expects 2024 to be a steady if unspectacular year in terms of volumes. “In some respects I don’t mind that,” he says. “The last two years have been extremely volatile and I will be quite happy with a year of calm.”

One of the strong foundations that Farrall talks about is owning rather than leasing its property.

“Land is scarce and prices are going through the roof,” he says. “We have done a mix of purchasing and contract hiring of trucks but it is good to own the asset when business turns down.

“That is where a lot of people who grew fast but couldn’t afford to buy the trucks so contract hired them and then ended up in the mire when the work dried up. It was almost a no-brainer to contract hire when interest rates were low but we won’t be doing that now.”

Another abiding principle is to run a safe and compliant operation at all times.

“There are still a lot of cowboys out there who will cut corners but I want to sleep at night knowing we won’t get pulled for something silly,” Farrall says. “It is a tough message to get across to customers because all they want to know is the price and will it get there.

“We have to demonstrate why we are different and a lot of that is added value which includes the presentation of the equipment. You can buy new and not look after it or livery it up – we take pride in our branding.”

Farrall’s took the “big decision” to become a founder member of Palletforce when it was set up by Mick Scarlett, though Farrall’s father Mike took some persuading at first.

“The firm was with Weaver Express which didn’t work out too well so he was hesitant about joining Palletforce,” he says. “He still sits on the advisory board and our pallet network director Paul Mather sits on the member services committee so we are heavily involved in the network.”

Palletforce was bought from its 88 shareholder members by EV Cargo in 2015, since when it has grown to a membership of over 100 and annual volumes of 4m pallets. Farrall’s was one of seven hauliers to be first inducted into the ‘100% Club’ for members delivering 100% service levels in 2019.

“We have two depots running in the network and are a leading member of the 100% Club,” says Farrall. “We look after Palletforce like any other customer and hope they will look after us. Our team takes pride in delivering a 100% service day in, day out.”

While Farrall has some reservations about Palletforce’s hub fees he praises the network’s willingness to help support him in growing input volumes at his new depot in Telford.

“They are looking to get us to at least a balanced position,” he says. “It is a lot harder in the Midlands than I thought it would be! So Palletforce is the right choice.”

Badge of honour

Being accepted into the TA is a source of pride for its 65 members, for whom it is still a badge of honour.

“To be a member you have to be a reputable operator,” says Farrall. “We are also FORS Bronze and are not far off Silver. We will be going for Earned Recognition over the next year or so.”

While not an admirer of TfL’s DVS, Farrall’s is investing in upgrading its 70 vehicles to the latest specification as it has a lot of deliveries on its general haulage work in London.

“I’m not sure which way London will go,” says Farrall. “The drivers and planners all hate it! Maybe the way it will go long term is that there will be hubs around the edge with final mile delivery on electric vehicles.

“I think the TA has a great opportunity and we have discussed with Fagan & Whalley that we could do something here. If not, we will find the big boys doing it – they already operate hub and spoke models and that is their bread and butter.

“If the government isn’t careful they may find someone comes in and strategically places themselves with a hub and spoke model with electric final mile and monopolises the area. Hence SMEs like ourselves need to work together which is why we set up a joint venture with Fagan & Whalley is to compete against the larger blue chips.”

The joint venture is a 4PL that manages haulage contracts for customers, subcontracting the work to Farrall’s, Fagan & Whalley and other hauliers. “It is becoming more of a tech company than a freight forwarder,” says Farrall. “It works really well with Fagan’s and you have to choose who you work with carefully. My parents and Sam [Fagan, MD operations at Fagan & Whalley] and Dan’s [Fagan, MD commercial at Fagan & Whalley] parents seemed to think exactly alike and now it is the same with my sister [joint MD Kat], me, Simon and Dan. They will always look out for us and we will look out for them.”

Farrall’s has set up an electrical business, Edge’s Electrical, so it can install cameras and sensors on its own and other Palletforce members’ vehicles.

“We do that at favourable rates to try to make it cost effective for everyone,” says Farrall. “We are investing in our supply chain which has paid dividends.”

The essence of a pallet network and the TA is collaboration between like-minded, often family-owned, hauliers. Succession planning can be a challenge for some of these firms but Farrall sees plenty more people in the TA like himself stepping up to take responsibility for keeping the family tradition alive.

“Working together is going to be key to success,” says Farrall. “I have very good relationships with a lot of people in the TA and it is great to see the younger generation coming through. In this industry you need friends and without them you won’t get far.

“There are some great reputable companies in there like Knowles, Campeys and Welch’s that we work with and we can just pick the phone and ask for help. We are very close to Fagan & Whalley – when we had a contaminated fuel crisis a few years back we had a call from Dan saying ‘there are three trucks on the way, tell me if you need more’. That is what the TA is all about and we will all help each other.”

Quite apart from a friendly support network, the TA continues to provide more tangible benefits including access to secure fellow members’ parking, fuel bunkers, truck washes, breakdown recovery and workshops. These relationships extend to delivering loads for other members when required.

“I know they will treat our load as if it was their own customer,” says Farrall, “whereas if we subcontract to other less reputable firms they don’t look after the work as well.”