Lesley O’Brien: “Costs are up, rates are being pushed down and everyone's fighting for mechanics…”

Lesley O'Brien OBE is MD of Halifax-based family haulier Freightlink Europe. A tireless ambassador for the transport industry, she highlights the key issues facing smaller operators - and the best ways to tackle them

Q&A

What are the biggest challenges facing hauliers right now?

Everybody is pushing down on rates but our costs have gone up. It’s gone almost like it was before Covid and the smaller operator needs to keep a close eye on it. Operators are tired; it’s one challenge after another. The biggie is that the smaller ones have relied on the second-hand vehicle market, but with the low emission zones, all of a sudden they can’t have those vehicles any more. Or they’ve invested in them and now what? With such high investments and small margins it’s not worth it. So we’re seeing a lot of consolidation.

Any plans to fully decarbonise the fleet?

It’s a bit too soon for us to dare. And we’re not a big company that can invest and trial it. But clearly with the next tranche of vehicles we’re going to have to start thinking about it. We probably should be thinking about it now, but let’s just let other people trial it, and let other people learn, and let us learn from their mistakes. All the supermarkets have got the kind of investment money to afford for it to go wrong, if it does.

Can you understand why SMEs are worried by the cost of the switch?

Yes, and are all these steps going to wipe out the smaller operator? Think as well about the age of our industry. We want clean air but it’s a bit daunting. We want more government help. There are massive steps underway to get people into the industry but if we don’t get it right they’ll come in one door and out the next.

So smaller operators risk folding in the government’s push to decarbonise?

Yes, the smaller operators don’t have that money so it will take them out. But then the TCs say operator licence applications are increasing, so maybe people think it’s a good industry to come into, but you need a bit of money. New vehicle costs are escalating.

Is the fuel situation improving?

It’s easing a little bit. We’ve invested in Euro-5 and 6, but we’ve still got an issue getting trucks. We’ve got customers pushing prices down and we’ve got maintenance costs going up 20%. So your costs are going up but your service is going down because everyone is fighting for mechanics. We have to pay them more to keep them. That’s a difficult conversation with my customer when I’ve already had the conversation about driver salaries and fuel etc. The strongest survive but you can’t keep slashing your rates or you’ll be out of business.

How can you best tackle these problems?

Give the best service. And when something goes wrong you have to put it right. Also talk to your customers. You’re consultants, so understand their needs and adapt your service to them and be an integral part of their logistics chain. By breaking that chain you risk them going somewhere else who may be cheaper. But will they give the same level of service?

Look at what you can do differently. We’ve started doing some refrigerated works and hazardous works. You can’t just stick with general haulage and pallets; you’ve got to diversify as much as you can.

Is that helping grow the business?

Last year was brilliant, one of our best years. Contracts came off, we were working with great customers and we moved to this new site in Halifax which has been great. January has been quiet, as it is for everybody. But in the last week it really picked up and it still is. It’s like no longer are we Bradford City, we’re Leeds United. But the bigger you are the harder you fall, that’s the danger.

It’s good other than this drive by everyone to bring down costs. You’ll find the haulage community starts fighting for the business which is bad news for us.

Some operators say the downturn in volumes is forcing them to park up some of their trucks and sub-contractors are also losing out?

Yes they are. We lost - or walked away from - a big contract at the end of last year which is one of the reasons we decided to diversify. We have quite a few 7.5-tonne vehicles but now everyone is going straight to 18 tonnes so salary-wise we might get rid of our 7.5-tonne vehicles and reduce our fleet.

You’ve been critical of driver agencies in the past. Is your problem with the drivers or the agencies?

Both. The drivers have a stigma of being useless and not looking after the truck. You need to sit them down, do a walk round check, involve them. Then all of the sudden they’ll probably be a good part of the team.

But recently I did a presentation for an agency network and told the people there to stand up if they’d got a transport manager. Nobody did. I told them to write down all the operators’ licence undertakings that they have to adhere to, then asked how many of those they thought directly rely on the driver? They didn’t know.

Then I asked, in their recruitment process, what question they would ask the driver to avoid a bridge strike. None of them knew. So I told them they’re recruiting drivers for me where if it goes wrong my livelihood is at stake, and all my employees, and they just walk away Scot free. We should be working together with them because they’re a vital part of our logistics chain.

What would help the situation?

Small operators need to rely on the agencies to train drivers. Wouldn’t it be great if they had a relationship with the driving school around the corner who had already given them a driving assessment?

Should they be responsible to the Traffic Commissioner?

They would say they don’t have time - but nor have I. We need Earned Recognition for agencies but unless the industry says you must have it it’s never going to happen. It’s the same as FORS.

Earned Recognition now seems to have more respect than FORS…

Will you tell my customers that? Yes, the RHA put me on a FORS auditing course and it’s just a tick box exercise, whereas with Earned Recognition you’re constantly being assessed for what you do. FORS has some great aspects but you can be in breach of your operator’s licence and still have FORS. Not a lot of people know that!

Is there an easier solution to gaining compliance?

Personally, I'm quite happy with Earned Recognition. It’s not easy but it keeps us on our toes. But I‘d like everybody to have an audit every two years and get rid of everything else. Just have one thing that covers everybody. Operators may find they are operating safer. Some people will agree with me, some will dispute it vehemently. That would also get rid of a lot of the bandits out here. It would get rid of a lot of my smaller competitors.

You’re building a big reputation for championing the cause of smaller operators…

I’m shy really [laughs]. When I say something it’s only what everyone else wants to say so what’s the worst that can happen? Yesterday I had to go and buy the Sun newspaper because I was in it! I like to think I speak out for the smaller operator. I’ve been there with the multinationals but when you come back into the family you’re juggling all these hats. I’ve got a great team here but small operators don’t have that.

Are you happy with the level of growth in the business?

I have no desire to be Stobart’s. You can just be filling in KPIs. Here the doors are open and you can hear what’s going on and there’s a lot to be said for that. We’ve got 38 trucks and by the end of this year we’ll have about 50. We don’t want to be the biggest players. Once it becomes a vanity project you’ve lost where you’re going. But I’m striving for the secret work / life balance, which is very difficult in transport.

Who’s your perfect customer?

One who pays. Amazon invited us in because they’d seen our vehicles going in there for someone else. They said they wanted us to be part of the team. So you go online to fill in an application but it’s a one-way conversation and I’m not going to agree to that. It’s bullying. So I didn’t fill it in, I needed a two-way conversation, so we never went on their approved supplier list and they were probably shocked.

Tell us more about your fleet?

We have a mixed fleet. For me, it’s the after service. You can have a wonderful Scania but if it’s broken down what I want is the back up and it’s that which fluctuates all the time. So we’ve got DAF, Iveco, Volvo and it’s yes, its service. Were moving away from contract hire because at least if you’ve got your own fleet, if times get hard, you can sell. If you’re hiring  you’re tied in there. Everyone’s different so listen to your accountant and surround yourself with people who know better than you.

What’s the longer-term plan for the business?

I am a bit of a control freak, which is not good, so I’m trying to empower other people. We’re a family business but it’s not the Kevin and Lesley show or it would be called O’Brien Distribution. It’s important that if something happened to one of us we have a great team that can carry it on. It’s not about trucks, it’s about people.

For more stories tracking the industry journey to decarbonisation see our new Freight Carbon Zero website.