J P Bull Transport

A Message from Lord Pickles and Lord Blunkett, followed by J P Bull Transport's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from J P Bull Transport is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Blunkett signature Rt Hon The Lord David Blunkett
Pickles signature Rt Hon The Lord Eric Pickles
1JP BULL TRANSPORT |
BEST PRACTICE REPRESENTATIVE
Director Jonathan Bull
JP Bull Transport solely
provides transport by road
In terms of transport by road, JP Bull Transport Ltd is a very
small company. It runs a fleet of 28 vehicles, all 44-tonne
artics with the exception of one 13-tonner, and 40 trailers. It
transports a variety of goods on a daily basis, from cardboard
packaging to fresh and frozen food, all over the UK. It tends to
work with full loads only as opposed to single pallets or parcels
and has depots in Avonmouth, Monmouth and Hereford.
Director Jonathan Bull tells the
Review
more.
The key to profitability is maximising the utilisation and economic efficiency of the
resource. Although the logistical planning of combining customers’ requirements is
the obvious route to efficiency, we will always look at the financial implications of
our job pairing and routing, since sometimes the most financially efficient plan will
make no logical sense whatsoever.
Monitoring and technology
Maximising utilisation and efficiency of our fleet is only possible because of the
technology we use; we have real-time tracking on all vehicles, which allows us
to see each vehicle’s history and predict forward delivery times. We can also
monitor driver and vehicle performance via the manufacturer’s telematics, which
allows us to monitor acceleration, braking, idling and driver anticipation and such
performance is scored accordingly. This in turn reduces our carbon emissions,
which the telematics can also measure.
FACTS ABOUT
JP BULL TRANSPORT
»Director: Jonathan Bull
»Founded in 2004
»Based in Hereford, Monmouth
and Avonmouth
»Services: Transport and
logisitcs
»No. of employees: 36
»Turnover: £5.8 million
»Road fund licence for 44
tonne vehicle per year: £1,328
JP Bull Transport
THE PARLIAMENTARY REVIEW
Highlighting best practice
2| JP BULL TRANSPORT
Challenges of a small
transport company
As with many other sectors, there is
a large subcontracting culture within
the transport industry, and this can
lead to difficulty in acquiring suitable
third-party contracts; to do this we
have to prove that we can supply at
least the same level of service as a
provider with a national network and
hopefully demonstrate the benefits of
being small. These are usually based
on the ability to make decisions and
implement them more quickly, thus
giving benefits to our customer and
ultimately their customers. We are
lucky; we are a third-party logistics
provider to 80 per cent of our clients
and so can maximise our margins.
Transport in any form is very exposed
to economic activity, be that growth or
recession, factors directly affecting our
customers or the volume fluctuations
from month end or month beginning.
All these bring huge challenges in
terms of resource requirement, and
finding a balance between permanent
and temporary resources in terms of
people and equipment is essential.
The River Severn crossing
Having two out of three of our bases
either side of the River Severn has in
the past cost us up to 2.5 per cent
of our turnover or potentially half of
our profit. Therefore, you would think
that when the tolls were removed
late last year that this would result
in higher profitability. However, the
tolls were not only a physical barrier
to some trade but they also hugely
affected the free flow of labour.
Due to the accessibility to Wales and
the West Country, Avonmouth is
strategically placed and has seen huge
development over recent years in
distribution and warehousing, which
has led to huge demand for drivers
and warehouse staff.
While tolls were applicable to the River
Severn crossing, a huge disparity in
the cost of labour had developed, and
as such during 2018 labour costs in
these sectors began to rise sharply in
anticipation of the complete removal
of tolls, and as a result any cost savings
have been depleted. The increased
freedom of labour has also led to
a change in the dynamic according
to which some of our customers
work, which has led to lower levels
of revenue and new challenges for
revenue streams.
Payment terms
Cash flow is an important part of
any business, and for us, as with any
similar company, managing our cash
flow is a challenge. All our outgoing
costs are settled on average 30 days
from when the work was carried out.
In contrast, our invoices are settled
45 days from the end of the month in
which the work was carried out, so jobs
completed on the first of the month
are not paid for 75 days. This creates
a high level of negative cash flow with
as much as 20 per cent of our annual
turnover tied up while our nett margin
is typically three to five percent.
The time Jonathan spent
on a farm in his youth
became the inspiration
for establishing his own
business
Transport in
any form is
very exposed
to economic
activity, be
that growth or
recession,
factors directly
affecting our
customers or
the volume
fluctuations
from month
end or month
beginning
3JP BULL TRANSPORT |
BEST PRACTICE REPRESENTATIVE
There are financial tools available
such as factoring or, as in our case,
commercial finance whereby we can
draw up to 85 per cent of any invoice
value, but this has a detrimental effect
on our nett margin and so we only
like to use this to assist with asset
purchases. It is also very important
to understand that if a customer
falls into administration, any money
drawn against that customer needs to
berepaid.
Growth and sustainability
When I was 14 years old I spent all
my spare time helping on a local
farm; this then turned into my first
job on what was then called a youth
training scheme. It was here that my
foundation of problem solving, and
the value of money, was laid. I suspect
my previous employers got fed up of
me asking, “how does that translate
to money in the bank?” Their answers,
however, certainly served me well
and made me think. I have always
thought that building a sustainable
business is about understanding your
customers’ requirements and serving
them well. The balance of providing a
personalised, workable solution and
a competitive price is a tricky one and
varies from customer to customer.
One of the advantages of a solely
owned company is the ability to
decide on the financial strength of
the business, as opposed to having
shareholders who may wish to extract
varying amounts of capital. Instead, we
choose to maintain a strong balance
sheet, which we see as an important
factor in our ability to sustain a
financial downturn.
As I mentioned previously, transport is
more susceptible than most industries
during an economic downturn as
it provides a front-line, immediate
service; as such we need to be able
to react quickly to continued declines
in volume as well as sustain periods
of loss. At JP Bull Transport Ltd we
have a policy of owning outright at
least 50 per cent of our equipment
with the rest split between finance
and contract lease arrangements.
This gives us the ability to take
more control, either increasing or
decreasing our resources to fit the
requirements accordingly.
I have always
thought that
building a
sustainable
business is
about
understanding
your
customers’
requirements
and serving
them well
During 2018 labour
costs began to rise
sharply in anticipation
of the complete removal
of tolls

This article was sponsored by J P Bull Transport. The Parliamentary Review is wholly funded by the representatives who write for it. The publication in which this article originally appeared contained the following foreword from Rt Hon Michael Gove.

Rt Hon Michael Gove's Foreword For The Parliamentary Review

By Rt Hon Michael Gove

This year's Parliamentary Review comes at a momentous time for parliament, as we collectively determine the destiny of the United Kingdom. 

On October 31, the UK will leave the European Union. The successful implementation of this process is this government's number-one priority.

Three years after a historic referendum vote, we will deliver on the decisive mandate from the British people. Trust in our democracy depends on it. Until that final hour, we will work determinedly and diligently to negotiate a deal, one that abolishes the backstop and upholds the warm and close relationship we share with our friends, allies and neighbours in the EU. But in the event that the EU refuses to meet us at the table, we must be prepared to leave without a deal.

As the Chancellor of the Duchy of Lancaster, it is my job to lead on this government's approach, should that scenario happen. Preparing for Brexit is my department's driving mission. But while I am leading this turbocharged effort, the whole of government is committed to this endeavour.

Ministers across Whitehall are working together to ensure that every possibility is considered, every plan is scrutinised and every provision is made. A daily drumbeat of meetings means that we are holding departments accountable, so that preparations are completed on time.

The chancellor has confirmed that all necessary funding will be made available. And we have mobilised thecivil service, assigning 15,000 of our most talented civil servants to manage our exit from the EU.

We will make sure that on November 1, there is as little disruption to national life as possible. Our trade relationships will continue to thrive, thanks to agreements with countries around the world worth £70 billion. Our country will remain secure, thanks to nearly 1,000 new officers posted at our borders. And the 3.2 million EU nationals now living and working among us can remain confident, with absolute certainty, of their right to remain in the UK.

Above all, our goal is to be transparent. Soon, we will launch a public information campaign so that citizens, communities and businesses are ready and reassured about what will happen in the event of “no deal”.

In my first few weeks in this role, I have travelled to ports and tarmacs, borders and bridges, all across the UK –from the seaside of Dover to the rolling green hills of County Armagh. I have heard from business owners and border officials, farmers and hauliers. They are ready to put an end to uncertainty. And they are ready to embrace the opportunities ahead.

Our departure from the EU will be a once in a lifetime chance to chart a new course for the United Kingdom. Preparing for that new course will be a herculean effort. But this country has made astounding efforts before. We can do it again.
Rt Hon Michael Gove
Chancellor of the Duchy of Lancaster