Aspray24 expands with new £6m logistics hub

Express carrier Aspray24 is celebrating its 30th anniversary in 2013 and has marked the occasion with the opening of its new £6m state of the art warehouse on a six-acre plot next to its existing 12-acre site in Noose Lane, Willenhall.

According to MD Stuart Laight, the acquisition of the site next door has delivered a number of great benefits for the fast-growing business.

“First, it extends the operational space in the hub so we can stay here for the next 10 years and gives [operations director] Ian [Barclay] an extra 40 trailer spaces so when we hit peak at night sortation we can get the vehicles and trailers that are not required that night out of the way,” he says. “Second, it allowed us to put up a purpose-built logistics building – that is phase 1. We have planning permission for an identical building for phase 2.”

The new building is 20m high - 17.5m to the eaves – and most of the floor space is given over to narrow aisle 10+ high pallet racking that provides 10,500 pallet locations. There is also a bulk stack area and capacity can be extended in future by adding a two-floor mezzanine.

“So within a 55,000 sq ft footprint we have two and a half times more capacity than our previous 70,000 sq ft building,” says Laight. “We can also bring all our logistics people on to site – with the import/export side and pick and pack it is feast and famine and that gives us the flexibility to move labour between transport and logistics and offer overtime opportunities to our people.”

The opening of the new warehouse also “ties in nicely” with the growth of Aspray24’s International division, which was set up three years ago but has really started to motor in the last 12 months.

“We have a settled, experienced team now – it is completely different to logistics or next day distribution, though there are obvious synergies between International and Logistics,” says Laight. “If someone is importing product they will want to do something with it, and similarly if they want pick and pack or storage, that product might well be imported.”

Laight had been eyeing the site next to the existing hub for some time, and the combination of a deal finally coming together and a return of confidence – albeit fragile still - to the market made this year the right time to move, he says. 

“We saw at the back end of last year volumes from our existing customer base start to improve and that has continued so now we genuinely believe that is the flickering signs of growth in the UK,” he says. “Stripping out new business, volumes are showing signs of improvement, year on year and month on month, which is overdue and very welcome.”

The company also gained a significant number of new accounts at the back end of 2012 and that continued into the start of this year. As a result, Aspray24 will witness probably 20% growth during 2013. So a short-term spike at the start of the year has continued, with the volumes anticipated in the usual busy September/October period being experienced in the March to May period.

Expansion plans

In response, it has brought forward other expansion plans, including a virtual doubling of the size of the Cardiff and Avonmouth depots, the moving of Milton Keynes into a new depot in June and bringing forward the expansion of the Manchester regional depot, which will be completed during October 2013. The Scottish operation at Larkhall, Lanarkshire just off the M74 will also double in size during the winter period.

Aspray24 has diversified somewhat away from its core construction-related market, but it remains focused on the B2B market, still largely next day delivery of industrial and manufactured products.

“Manufacturing has seen an uplift and in some cases we have benefited from a return to the UK and the Eurozone by our customer base,” says Laight. “Automotive has picked up and petrochemicals are going great guns. We have also seen a return of companies who want a base within the UK but have been frightened by the recession to the degree where they no longer want to do the logistics themselves.”

While Laight is adamant Aspray24 will never specialise in home delivery he says the line is blurring between B2B and B2C. “There has been a shift where everybody wants to buy online and while we are definitely not a home delivery expert, for us that shift means that a builder ordering hardware online doesn’t want it delivering to the builders’ merchant, he wants it delivering to the house he is working on,” says Laight. “That puts added pressure on and we are looking at working with partners or working smarter to obtain more data from the customer at the point of order. So rather than just ‘Joe Bloggs, 2 Priory Close’ it’s ‘what’s the product, can it be handled safely by one person, does it need a tail lift, where’s it going in the house etc’. I don’t think society and the transport sector are as one yet – they want all the benefits but not any additional cost.”

Aspray24 has also had to find a way to handle B2C for customers who don’t want separate B2C and B2B carriers.

“A lot of our bigger customers are saying to us that, while they might be able to get a better rate from Royal Mail for a 1kg carton, they don’t want to split their streams of traffic,” says Laight. “So they want us to provide a management solution even if there is a margin for handling the contract – that is the route a lot of the larger players are going. We are responding by talking to potential partners and on the logistics side we do use partners. If a client comes and says we want you to import it, store it, pick and pack it but we have an arrangement with say DHL to deliver it to the home, then that is no problem.”

Home delivery

Having to do an element of home delivery inhouse has meant operations director Ian Barclay is adapting the fleet mix to the delivery route as part of the £2.5m investment in new and replacement vehicles this year.

“We are doing it now and we need to adapt,” he says. “It is not one size fits all. Most of our vehicles are still 7.5 tonners, with an increasing amount of tail lifts, but we do also have 3.5t panel vans, 5.2t “super vans” and we also operate 12 and 18 tonners to respond to increasing demand for pallets. So we have had to increase the mix of vehicle types.”

Although as a loyal Daf customer the company has two Euro-6 CF tractor units, Barclay has bought as many Euro-5s as possible ahead of the deadline this year. “We have a couple of Euro-6s which are actually performing very well but we brought forward the purchase of Euro-5 purely on the basis of the inevitable price increase” he says.

Aspray24 handles the whole range of product sizes from a Jiffy bag to a carton, bundle or a pallet.

“Our core business is collecting anything from a parcel to a pallet, a length – which might be an ugly length – or a piece of machinery. We do the whole lot,” says Barclay. “On a normal night now we are seeing 30,000 items through the hub, of which 3,000 to 3,500 are pallets. The remainder are bags, bundles, parcels etc so we are competing with the parcels, pallets and groupage networks in our key trade of industrial B2B products. We consolidate the whole range - our customer’s customer doesn’t want his pallet arriving at noon and his parcel at 10am – he wants one delivery and that is where we excel.”

Because many builders no longer routinely visit builders’ merchants, they want all the products needed for a day’s work delivering direct to site first thing in the morning.

“Timed deliveries are a big challenge now,” says Barclay. “More customers are looking for ‘by 9am’ and that changes the profile of the routes and the type of vehicle required significantly. That is also reflective of the fact people are not holding stock – they need it there at the beginning of their working day. Perhaps surprisingly, we know of wholesalers and distributors who don’t hold stock- they order on a daily basis.”

Hub expansion

While in 2013 the focus has been on logistics, the 20% annual growth in Aspray24’s core next day delivery business will see it expand its existing hub too. “We will be increasing the size of the hub operation in 2014 or 2015,” says Laight. “This year has been about investment in logistics, and the network infrastructure. We have invested in the network capability to handle the additional volume – vehicles, drivers and on the site here to handle the numbers – and the focus for 2014/15 needs to be on the hub.”

The other good news is that the signs of growth now being seen within the UK mean contracts are being discussed at more acceptable rates than has been witnessed within the transport sector during recent years.

“Whilst there are still people who will go in and buy business it is not as aggressive as it was, particularly with some of the majors who would go in and knock 30% or 40% off a rate,” says Laight. “A number of operators, some of which have changed hands or restructured, are taking a more sensible view that it isn’t about volume at any price. That has helped us – there is still pressure out there but the market has settled and that can only help the industry.

“In the recession, a lot of businesses took the benefit of market rates they knew were unsustainable, but they took it as the norm and built it into their business model. Quite a few of them will definitely come unstuck as things start picking up. We have seen a good number of examples where the rates have doubled – I can imagine that conversation with the client.”

30 in 30

2013 is Aspray24’s 30th anniversary and to mark the occasion Laight has set the company the ambitious target of raising £30,000 for three charities: Help for Heroes, Macmillan Cancer and Air Ambulance. “We have had good support from customers, suppliers and staff,” he says. “We went to all the staff and asked them to choose three charities so hopefully we will be able to give each charity £10,000”.

There have been a series of charitable events from football and golf through to charity auction with a wide and varied appeal. For an update on Aspray24’s £30K, 30 years, 3 charities appeal please visit www.aspray24.com/charity.