New ideas and fresh thinking are top priorities at delivery giant Hermes as it tackles the challenges of adapting to a low-carbon future where access to cities could be limited, John Maslen reports.
The parcel delivery industry is one of the most challenging business environments for fleets, where an ‘every second counts’ approach is required to meet the needs of customers.
It sits at the sharp end of service delivery for thousands of companies, particularly with growth in online shopping and home deliveries, where high customer service expectations all come down to delivering a parcel to the right address, in a short time window and in good condition.
The daily pressures of service delivery can dominate the attention of managers at the expense of ensuring there is strategic oversight.
For Kevin King (pictured), national fleet services manager for Hermes, the key is to strike a balance to manage the present and prepare for the future, especially as the industry faces important challenges. Many of these revolve around diesel, which is the power behind every major commercial vehicle operator in the UK.
In response to concerns about the health impact of vehicle emissions, pressure groups, politicians and local authorities are looking at ways to reduce carbon emissions – and diesel is in their sights.
The pressure has been increased by a recent high court ruling that the UK is not doing enough to reduce pollution, which could force cities to introduce tough measures to cut emissions.
Already London is moving towards an ultra-low emission zone (ULEZ) as early as 2019 and that is the first step which could see zero emission zones introduced in the coming years.
As a result, King says, it is essential to think ahead and consider how the business needs to adapt.
“When you start to look at 2020, most cities in the UK are going to have some kind of legislation relating to emissions being introduced so they can manage air quality,” he says.
“We need to understand these challenges and be on the front foot with developing solutions.
“It is our job to understand the impact of these changes and then to make sure the business changes with it.”
This is easier said than done, as legislation rarely provides a clearly-defined route for companies to follow.
However, King says it is essential to keep pace with the changes but also watch closely for emerging trends that allow the company to proactively take action in important areas, such as reducing its environmental impact.
To achieve this goal, companies need to invest in fleet expertise and King brought substantial experience when he joined Hermes just over a year ago, having spent most of his career in the fleet sector.
His 40-year industry experience started with his appointment as the first UK apprentice mechanic and engineer for Christian Salvesen in 1976.
Since then he has held fleet roles in companies as diverse as Cemex, C Butt and PepsiCo.
At Hermes, King has hit the ground running by reviewing the fleet team and introducing a range of initiatives.
He says: “They gave me an open book, telling me to identify what I wanted to do and present it back to the senior team, which I completed in July last year.
“I am good at going in cold, putting a plan together and executing it, which is what I am currently doing.”
He oversees a fleet of 510 cars, 20 vans and more than 50 trucks, in addition to 1,060 trailers and 87 forklifts.
The company is supported by suppliers and an army of around 14,500 self-employed couriers who help to complete ‘final mile’ deliveries.
Introducing changes in such a complex fleet requires senior management support.
King says: “Hermes inspired me because they have the drive to implement change and it is coming from the top. They are supporting me 100% and we have lots of changes planned.”
The first step has been to reorganise the team with a focus on managing present day challenges, but also preparing for the future.
King says he has learnt lessons from the training and support he received when he was an apprentice.
He adds: “One of the first things was to make sure I had a progression plan in place for the team. I am working with individuals to push them to a new level and that links back to my own experience. I have always benefited from having someone mentor me and, even in my current position, it is still important to seek sound advice from people you respect in the industry.”
For two of the team members, this includes training them to replace his role in preparation for when he retires further down the line.
He adds: “I am performing a programme with them currently, training them to be able to take on the role of fleet manager for Hermes. They spend time with me several days a week just to learn what I do, how I do it and understand the role in detail.”
In addition, formal training is also being provided through the Freight Transport Association (FTA) Commercial Vehicle Fleet Management qualification, which covers a series of modules that provide the skills and knowledge to effectively manage the operation of commercial fleets.
King says: “It is a way to see how they are doing and how they are progressing.
“We also work on their objectives for the year and most of those concern how they can improve their expertise and expanding their responsibility when it comes to taking on key tasks.”
Their projects have ranged from switching forklift trucks from gas and diesel to electric and the introduction of new fleet safety solutions (see panel above).
As part of the progression plan, King also acted to ensure the team is multi-skilled and can take over each other’s roles if required.
He says: “I wanted to break away from people being siloed to a certain task and ensure they can work in other roles, which is important for developing teamwork.”
The team is kept busy supporting 27 depots, with an expanding business and workforce.
King has split the country into north and south regions to make oversight more manageable, as it used to be covered by a single role.
Vehicle replacement cycles vary from three years for vans, which can do up to 150,000 miles a year, to six years for trucks.
Every depot has a compliance officer who looks after maintenance and conformity. Servicing work is carried out externally.
Supplier standards are monitored through a vehicle off-road report which ensures they meet their key performance indicators (KPIs).
Suppliers include BRS, Fraikin, Ryder for vans and trucks and Zenith for cars.
With day-to-day management under control, King can focus on strategic objectives, including cost management, safety and future access to cities.
He says: “Our fleet is Euro 6-compliant, but we need to keep reducing CO2 emissions. Clients want to minimise their impact on the environment, but we also need to consider how cities will change.
“I am looking at the role different types of fuels will play, particularly when it comes to getting into London in future.
“Legislation will mean change will have to happen in the long term. There is no two ways about it. This could mean a shift to electric vehicles in cities and then deliveries being made from outside to a depot, so that everything in the urban area is electric or plug-in hybrid.
“It may be the same with cars, because if you have managers and they are moving around a city, then they need to be in vehicles that are sustainable.”
Hermes has already made steps towards this vision of the future by working alongside Gnewt Cargo, one of the world’s largest electric vehicle delivery fleets, for work in London.
It is also set to trial plug-in hybrid and CNG vehicles in the capital.
The business is using a range of other technologies, including in-cab cameras and telematics to drive further efficiencies (see panel opposite).
It is also launching an innovative testing programme for the use of self-driving delivery robots in London. In partnership with Starship Technologies, Hermes will soon trial a number of parcel collections in the London borough of Southwark.
In addition, last year the business launched a dedicated Innovation Lab in the centre of Leeds to develop new delivery solutions.
Initial projects being worked upon include self-tracking parcels and new tracking services using digital personal assistants.
A key objective will be ensuring Hermes can integrate its technology with the growing number of smart devices from technology giants such as Apple, Amazon and Microsoft.
Hermes will also proactively seek to collaborate with the UK’s leading universities to share ideas and provide inspiration, while offering the next generation of engineers the chance to utilise the Innovation Lab and its facilities.
The daily and long-term challenges of the role mean fleet management is still something King relishes after 40 years in the industry.
He says: “The CEO is a driven person and knows what she wants and we are growing year-on-year, so we are really being led from the top and she is an inspiration.
“It is a great job, I love it and wouldn’t be without it. I can’t imagine doing anything else. It is just the buzz around the whole aspect of transport.”
Technological innovation at Hermes
Technological innovations play a major role in ensuring the Hermes fleet is efficient and safe.
In the latest initiative to roll out across the commercial vehicle fleet in May, new in-cab cameras will be introduced.
The system includes both forward-facing and driver-facing units.
This required an explanation of the benefits of the system to secure the support of employees and union representatives during long-term trials.
King says: “We can actually see both aspects of any incident, so we can prove our driver was driving properly, wearing his seatbelt and he was concentrating and doing the right speed.
“You can then show what the other driver was doing at the same time.”
A key to successful introduction of the system was providing evidence from historic footage showing how it could benefit employees.
King adds: “There was a bit of scepticism in the beginning because of the camera facing the driver, but when we showed them footage and involved them in the policy around the cameras they were happy.”
As part of the introduction, there will also be a two-month period for drivers to get used to the technology. After this, the company will be able to use it to actively manage drivers.
King says: “It is a softly, softly approach when it goes live. During the trial of the system, we had a 36% reduction in near collisions, so it benefits the company and drivers. We think we can get it to nearer 50%, which is important because one-in-five near collisions ends up in an accident.”
The Lytx system is triggered by events such as hard braking and then footage is forwarded to the fleet team.
“The system can be used as a coaching tool to feedback to the driver and identify training requirements. You need cameras to be able to manage drivers on the road,” King says.
The footage from the Lytx system has been used to support claims with insurers to show that drivers were not at fault following disputed collisions.
In addition, the company also has a telematics system in the commercial vehicle fleet which provides a useful incentive for drivers to focus on their performance on the road.
He adds: “Depots have a league table and there is always an element of competition about who reaches the top. Also, drivers don’t want to be at the bottom of the list.”
Currently, the systems just focus on commercial vehicles, but King would like to see the technology used in the car fleet.
Kings says: “For cars, there is more of a challenge regarding return on investment, but I think it would be the right thing to do. We will look into whether it is a viable proposition, but I think it is.”