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James Wilkins, operations director of postal provider Secured Mail, explains how experiencing harsh reality led to better fleet management and a more efficient business.
Back in 2007, when Secured Mail was just a fledgling start-up, we made a key decision that was as important as almost any other we have taken. After outsourcing our mail deliveries – and experiencing unreliability and a total lack of quality control – we leased 15 vans and took on the same number of drivers.
It is hard to overestimate how important that move was. As a company we need to deliver items around the country on time. Our customers, for whom we shift bulk mail and packets, expect a reliable and transparent service. Yet when we were relying on an externalservice it was hard to guarantee that would always be the case.
The quality of the service we were getting was sub-standard. It was not as reliable as we had hoped and it had the potential to damage our brand. As a director, you expect to be in control but that was far from the case. The lack of ownership was a major problem for us. The drivers were subcontractors, which meant we had little or no control over the management and the training of them. That makes it hard to guarantee quality. Another downside was that we couldn’t have Secured Mail liveries on our vehicles.
However, the crippling issue was the cost of outsourcing. Compared to running your own fleet it is far more expensive. In the embryonic days of Secured Mail that cost was simply unsustainable. However, despite that, we are now a much more mature company and we would not rule out outsourcing again in the future. I am glad to report that switching over to our own fleet was one of the most painless parts. It was a smooth transition, with only small mistakes made. Each of our initial 15 vans cost about £20,000 a month and we also had 15 drivers, at about £20,000 a year. However, crucially, the switch has been a profitable choice for the business.
Our own fleet now delivers over 400million items of mail a year to 56 Royal Mail inward mail offices across the country. The key, as mentioned, is control. The move almost pushed us to the wall but we learnt from that and we now have the means to take all the items we collect from customers to Royal Mail regional sorting offices. Its‘final mile’ delivery service then sees the mail to its destination.
Another big consideration when you are running a fleet is geography. Petrol costs, especially at current prices, are a huge outlay for any business that relies on vehicles, so getting location right is important. Secured Mail was founded in Aintree, Liverpool, and for four years that site served as our head office and depot. However, we recently opened up a 25,000 sq ft warehouse in Warrington. It has made a huge impact.
Warrington is only 20 miles down the road from Liverpool and is an ideal location for us. The new depot is beside the M6 and M62, offering our team of drivers fast access to the motorway network. The move has saved us thousands of pounds a month in running costs. If you have a fleet of drivers, it simply makes no sense for them to be driving 20 minutes just to get on to the motorway.
Like many firms, we learnt the hard way about how best to run the business. As a rule – and this is not rocket science – I would say that the more control you have, the better. That is certainly the case with fleet management. Running vehicles inefficiently can be a serious drain on your bottom line. After a few missteps we found the right solution. It has greatly improved our results and customer satisfaction.