A Family Tradition
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-By John Boley
In 1925, Roy Bayley Russell won a contract to distribute motor spirit for Dalgety & Co, who had just been appointed the Queensland agent for the Commonwealth Oil Refineries. It was the start of a dynastic transport business that nowadays has expanded to incorporate cranes, warehousing and customs / quarantine services. The family business still remains primarily a family transport business with the third generation of Russell Family members taking the reins in 2007.
Today, the group includes Russell Transport, Caloundra General Transport and Metro-Lift Cranes. The former operation concentrates on freight transport and offers contract distribution services, heavy haulage, specialised transport and freight terminal services. Caloundra General Transport was acquired in 1994 from the Weyer family on the Sunshine Coast and focuses on the local delivery of beer, wine and spirits in that region. The Warana operation is “the perfect location to bulk line haul palletised goods through the use of B-doubles.”
The third business in the group is Metropolitan Carriers Pty Ltd, trading as Metro-Lift Cranes. This business was purchased by Roy in 1936. The name was shelved for the best part of 60 years before Roy’s son Phil brought it back in the early 1990s to operate a mobile crane hire business in the greater Brisbane area. Metro-Lift Cranes was a progressive and logical step for the growing operations as it provided a wider range of logistical solutions with one point of contact.
Ken and Julie Russell told Business in Focus that it was “important for our business to have the ability to offer the full range of logistic services so that one phone call from the customer’s side is all that’s needed, rather than having to organise cranes at each end and transport providers between those two points. They can make one phone call and facilitate the whole shift.”
The mining and resources sectors are highly competitive. “At this stage, we say that service levels are critical because responsible people have the same equipment. What customers look for in those sectors is a safe and reliable service, and one thing we focus on here is to provide a safe and reliable service. That is a clear distinction for us. We are not out to attract just any old customer, because not every customer has the same philosophy. Those that just want something done cheaply, regardless, can possibly find the most competitive person that will potentially do it without servicing their vehicles, without meeting the procedure requirements and other factors. But we want to operate safely and we attract customers who value that philosophy because they want to support a safe transport environment.”
Russell Transport is supportive of an industry where operators are able to operate safely and the rates to provide a safe service are also reflected throughout the industry. “The biggest challenge to achieving this is not just pressure from customers to drive the price down, but also from transport operators themselves and the conditions in which we all operate. The industry is largely made up of owner operators (comprising up to 85 per cent of the industry) – often a person knows how to operate trucks and vehicle combinations, but they are not necessarily inherently equipped with the skills and experience to understand how to successfully run and cost their business to ensure they are meeting legislation requirements (mass standards, vehicle standards, fatigue laws etc), being paid for their time as well as the cost to run their vehicle. It is not simply the case of ‘if the wheels are turning then I must be making money.’
“There are new owner operators entering the industry every day – wanting to be their own boss. But it is these very people that continue to put downward pressure and expectations on rates in many sectors of the road transport industry, as they come to grips with the actual cost of running their own vehicle and then negotiating a safe rate with their customers or other operators to be able to run their business safely, responsibly and legally.
Russell Transport’s fleet of more than a hundred vehicles includes mainly Cummins powered Kenworth trucks in the heavy sector and Hino for the lighter operations, “our vehicle of choice in the last 6 years – based on their safety, cost and support.”
Russell Transport is strong on customer service. The transport industry is a tough industry in which to operate, “and we are looking for our services to differentiate us from competitors, based on good working relationships. Good service reflects a good relationship with the customer.”
Basically the business philosophy is “a whole trailer load or we don’t go. We are not a parcel pick-up and delivery business, although we can provide on-board parcel moving if required. We are not a large operator in any one sector of the transport industry, but combining our different areas of operation together, we believe ourselves to be a medium sized transport operator.”
Russell Group’s clients will often examine prices and go through the complete rationale of “why our prices are a little bit higher than someone else’s – but when they look at the service, the safety and the number of systems we have in place to ensure that safety and reliability is embedded and maintained in our business, then they either understand what we are trying to achieve or they will move on. So what we have is a good group of customers who want to work with us to improve and ensure safety during the loading, delivery and unloading of their goods.” They want to be associated with a transporter who practises safe loading and driving techniques and maintenance standards to ensure their load gets from point A to point B on time and without incident. “Our service is about the same philosophy as what we use to purchase trucks or other equipment: we are looking for the overall lowest cost of life.” Sometimes at the end of the day, what may seem more expensive at face value, “by the time you have walked through the whole operation it is actually a lower cost because of how extra charges get added. It is more about having those costs identified to the customer then through transparency, and once they actually see the facts behind it, it is easier to work through those pricing issues.”
It’s not that potential clients see transport and logistics just as a commodity, says Julie. “I think people do have good intentions. But often good intentions don’t lead to good outcomes. It really is the transport community that needs to think about ‘how do we educate?’ and ‘how do we inform those owner operators and small transport businesses out there that it is your life/livelihood?’ – the way you behave, load, drive, cost, and deliver can make or break you.”
The transport business is often undervalued in terms of skills and competence, says Julie. She and Ken both have a qualified business background at degree level but feel the general public perceive people in the industry as just ‘truck drivers’, people who may, if they are lucky, have merely completed high school. That’s not the reality. “I think the transport industry has had and maintains intelligent educated people up to tertiary and even further levels that are attracted to the industry and they work effectively in it.” In saying that, Julie also notes that some of the brightest leaders in the transport industry received their education through experience and not studies – and that has to be acknowledged as an invaluable and necessary part of any successful career. “I sometimes think the public perception is surprise that there would be business people here, but of course there are.”
Transport is a perfectly valid career, not just a ‘job’. In Australia particularly “there is a perception that a driver is just a driver. We like to call our drivers ‘operators’ because they do more than just drive a vehicle. I really think even the role of a truck operator needs to be looked at as a profession. It is not just a job or a task – it is a career.” Russell Transport is a strong supporter in promoting the transport industry as a career of choice for the next generation of workers. There is an ageing population in the transport industry, which means the industry is not attracting as many new entrants as it has in the past. There are some roadblocks to new or young entrants into this industry which are currently being looked into. For the most part, the licencing restrictions often see young people being attracted to trades as opposed to transport simply because a driver must hold an open licence for at least 12 months before they are able to attain a heavy vehicle licence (e.g. MR / HR licence). This means that in the most critical time when people finish school and decide what they want to do with their lives, the transport industry is not able to offer them much. Often, new entrants will come to road transport after a few years in warehousing, bus driving or taxis.
Russell Transport has started to tap into the Certificate courses for Driving Operations as this enables the company to bring on trainees in a safe and supportive way that will provide them with both on-the-job and theoretical training, yet not affect insurance excesses. The cost of a trainee is more economical to the business than paying another driver to attend a two-man delivery.
Russell Group has some 260 full time employees. “The point is we would prefer to use our own employees as opposed to subcontracting. That is led by the drive to have control over our operation which in turn gives us rigour in the business. It means we have confidence; we know that we are training the people that are driving our equipment, giving them the professionalism we expect them to demonstrate when they are dealing with our customers and people on the road.” The company also has its own internal workshop services. “When we purchase a vehicle, we buy a cab chassis and then we will build the body, mount the vehicle loading crane, set up the tracking devices and the phones and so forth. We do that all in house, again to give us control,” which in turn gives the company a greater flexibility and ability to react fast to customer needs. “One of our fortes is manufacturing dedicated and purpose-built equipment in an efficient manner which delivers an outcome that separates us from a standard transport operator.”
All family businesses, they say, end up having to make a decision – to face either succession or selling. “In our case we have been able establish a succession plan which allows the business to go ahead with certainty.” For the customer, there is always the built-in advantage that the people they are dealing with are the owners of the business. “No matter how big we get, you still have family members that really worry and are concerned for the business on a day to day, year by year and generation to generation basis.”
The post Russell Group first appeared on Business In Focus Magazine.