Thinking Out of the Box

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-By John Boley

Do you ever forget just how huge Australia is? If so, the chances are you are not responsible for distributing a product nationwide. Sure, it’s relatively easy down the eastern seaboard with its large population and economies of scale. To the far west the sheer emptiness almost plays to your advantage, with many companies having Perth-based warehousing solutions. But what about the bit in the middle? In that central stretch from Adelaide to Darwin there are around two million people, covering 2.3 million square kilometres, but how to get to them?

For many people, it’s a logistics nightmare, but Russell Wescombe, National Business Development Manager at Central Logistics Group, wants to help them sleep easier. He is used to dealing with situations where his biggest clients are away on the east coast while he is at home in Adelaide. Central Logistics Group has two sections to address this kind of scenario: Central Freight Management Services Pty Ltd and Central Warehousing and Distribution Pty Ltd.

Now those terms are fairly self explanatory, creating the opportunity for both companies to work together as a group providing an extensive logistics offering. Russell says the company has been around for many years and is one of the leading independent logistics companies in South Australia. “We offer a large degree of services for any one company operating in this market. The company has been around a very long time, originally starting as a transport business, and then developed into freight management and then further into warehousing.”

Central Logistics Group, he says, can ease any company’s nightmares regarding warehousing, distribution, home delivery and reverse logistics in the entire South Australia-Northern Territory region. (At least that’s the speciality and core expertise, although Russell would like to stress that Central has full national reach too).

“Interestingly, most of our market is not local; it’s in Sydney and Melbourne head offices. It is something of a challenge to operate in a state where your market is in another state.” But logistics is not rocket science. “Many companies in the industry can do most or some of the same things, so you really want to set yourself apart, either as someone who cares more or is more flexible. Our speciality that what we have really focused on is to provide all the services you need in South Australia. We want our clients to ‘set and forget’.” Businesses can do without problems in this region – they have enough in Sydney or Melbourne. So “you don’t need problems in South Australia and NT as well. You want to know you’re using someone who you can just give you the full service and not worry about it.”

The advantage of Central is the resolute way it remains based in Adelaide. “With most of the multinationals you’re often dealing with a sales person who changes every couple of years, whereas we have had a constant management team for many years. We know what we’re talking about. If we make a promise to you, we know we can keep it. People respect that.”

Adelaide is a very parochial market, Russell acknowledges. “People just don’t change because they feel like it, you’ve got to work hard; it takes a long time to secure accounts over here. You’ve got to be in it for the long haul.” Using Central is more cost-effective, he adds, because it lacks the extra level of costs that the largest companies have to build into their rates. “I like to describe Central as a jigsaw piece. We are the missing piece in making your national logistics very successful; we’re the missing piece of your big puzzle. So if you really want to be successful nationally, put our piece into your picture. We’re the ‘central’ piece.”

State by state, says Russell, the offering of a national logistics company sometimes fails; clients with single national contacts tend to be locked into that process “and they can’t get out. We promote the independent angle. There are a number of companies like us in every state and we actively talk to them and work out how we can put together deals that service the national market. In particular, we set ourselves up as what you might call a one stop shop, in that we cover all of SA and Northern Territory as a service for companies that need to distribute product from interstate.” This really benefits those companies based in NSW or VIC, in particular.

Most freight travels east to west, and most of what is in the west is either brought in directly from overseas or is shipped in bulk out of Sydney or Melbourne directly into the Perth warehouses, Russell explains. “So our main markets for the freight side of the business are Melbourne and Sydney, where we offer an overnight service out of Melbourne and a two day service out of Sydney. We also have a couple of clients coming down from Brisbane. From a warehousing perspective, many of our clients are importers so they bring full container loads directly into South Australia by ship and we unload, warehouse and redeliver.”

Russell says Central likes to think, as it were, out of the box – “we have considerable expertise in handling non-standard types of product. Generally, the multinationals have a preference for handling nice neat pallets, 1.2 metres high by 1.2 metres square. Once they get things that are not that size they tend to shy away from them. But we love them, we handle products like spas and tyres and large rolls of plastic that can weigh up to 2 tonnes that go into the mining industry. We do crates of all different shapes and sizes. We easily do the standard pallet work as well, but we are experts in handling non-standard product.”

This is important as the current development of consumer behaviour leans more and more towards both online shopping and home delivery. Central handles all such deliveries for one major household name and has been in this sector for 25 years; now it represents the future. Australia Post recently announced its major venture into online parcel deliveries; Russell points out that the Post model has restrictions on the size of the parcel. “Online nowadays you can buy anything, so how do you handle the products that Australia Post won’t take? We are actively pursuing this avenue and have offered ourselves as a quality option to be able to handle any and all kinds of product.”

As an example of where the business is likely to move in the next few years, Central is working with a company that is setting up in the US, selling online internationally. “They wanted to set up a system where they could sell online but distribute into Australia in bulk and have somebody break that bulk down and redeliver individual items.” It is very difficult for international freight companies to be cost-effective at that distance for individual consignments. “So we had the idea that once a week they could compile all the orders for Australia, ship it as one shipment into a local provider and then deliver it locally. There are many other opportunities we are looking at in the online market. Essentially, the things we like to target are what the majors aren’t doing.”

Russell also predicts that “reverse logistics will become a bigger part of the market.” For a long time this really only meant handling returns from customers – broken items or maintenance/service related issues where something needs to be returned to the manufacturer or distributor. “We can set up an operation for anyone looking at managing that kind of problem. It is becoming a bigger issue now because a lot of people need to get product back, especially with the changes in things like recycling laws. You’ll find somewhere down the track shortly that suppliers of electrical products, for example, will be held responsible to collect and dispose of spent products and or packaging. I am confident that will come into play within the next 10 years.”

Russell says Central’s strength is concentrating on its home region. ‘We have such a great network operating over here that we can solve almost any logistics problem anyone has. South Australia as a market is not very big; it represents 8-9 per cent of national GDP. Therefore anyone that has a requirement in South Australia, first of all they’re not necessarily going to do it themselves because it’s just not large enough to warrant setting something up. Secondly it’s so small they don’t want any problems.” That’s where Central comes in. “It’s tough operating in a state where your market is in another state. So we’ve really pushed that ability to be able to make things happen here seamlessly and better than anyone else. We’ve been very successful at that; for a very long time.”

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

September 19, 2018, 2:04 PM AEST