Telling the truth about SME life today

“The modern FD has to be empathetic to the varying needs of the team”

Tell us a bit about your background

After graduating with an economics degree I wanted to develop a career in industry. I completed my CIMA qualification with Rolls-Royce but soon moved into the freight industry and have continued to be employed in that sector ever since.

I made a number of moves at increasingly senior levels to companies in different sectors of the freight industry such that I now have experience of all modes of freight transport including spells in parcel distribution, a cargo airline, UK haulage and European road freight.

My first FD role was with RH Freight. I joined RH in 2001 and was part of the management team that grew the business from c. 40m turnover to c. 140m in the ten years before its sale to Kuehne & Nagel in 2011.

What were the biggest challenges you had to overcome when growing RH freight

As a relatively small UK company we recognised that in order to compete with the large multi-nationals significant growth could only be achieved by aligning ourselves with like-minded companies across Europe. 

We set about forming strategic relationships with the best independent companies in every country where both parties would sell into their home market and share the costs of operating a service. The biggest single contribution to the growth of RH was the decision to increase the volume of services offered and to persuade our partners to do likewise. 

We recognised that only by offering a commitment to a daily service schedule could we increase our customer base, especially amongst the larger volume customers that would drive growth. This meant making a commitment to services that we knew initially would be loss making but would ultimately deliver rapid growth.

Why did you decide to launch Baxter Freight

Principally because we thought that there was a significant gap in the market place. Freight companies fall largely into two categories. Those that operate their own equipment and those that dont. Neither are perfect models. Own operators are restricted by the requirement to utilise their own equipment and those without are totally reliant upon subcontractors. 

We felt that there was an opportunity to create a company that could add value for both customers and suppliers. Baxter Freight is principally a sales organisation. We already have thirty active sales staff and it is our intention to double this by early 2015. This represents one of the largest sales teams in the industry. 

Given that we do not operate our own vehicles our sales activity is not a direct threat to any other company, indeed it represents an opportunity for them to grow their business on the back of our sales success. 

Accordingly we can negotiate good deals with the best operators in each sector of the industry allowing us to source the most appropriate partner for each of our customers depending upon their own specific requirements. Effectively what we offer is a total freight management solution. Our reputation, experience and financial strength allows us to work with the strongest players in the market place.

How have the challenges there compared to RH”

Baxter Freight is a new company whereas RH had been established for many years. Being new brings its own challenges. At RH we had in excess of 4,000 regular trading customers, none of whom were more than two or three per cent of total turnover. 

We also had 17 locations including a foreign subsidiary. For these reasons, I took a very systematic approach to my role ensuring that everyone in the business was fully aware of their responsibilities and restricted any real ability on their part to deviate from them.

Baxter Freight is much more entrepreneurial. Although we have nationwide coverage, we are all located in one single office in Nottingham. We have recruited some of the best commercial and operational staff in the industry.

Our focus is sales and accordingly I have had to ensure that our procedures, whilst being robust, allow our team to use their skills and knowledge of the industry to offer creative solutions to customers and suppliers alike.

Are there any particular challenges for an FD in the freight industry

The basic challenges are the same. First and foremost, my job is to ensure that the business has the necessary systems and procedures in place. It is a very simple business model. We buy from our partner suppliers, we add value to their offering and charge our customers a reasonable margin in exchange for the added value. Relationships are key to the success of that model. My job is to ensure that our systems and procedures are up to the task of keeping suppliers and customers happy.

Our customers operate in many varied sectors and they range from very small SMEs to large blue-chips. The level of understanding of freight issues can therefore be varied. Accordingly, part of my role is to ensure that our procedures are simple but are also capable of being flexed in a controlled manner as and when required to accommodate the specific requirements of our customer and supplier base.

What key piece of advice would you give to those following in your footsteps

I would advise prospective FDs to immerse themselves in all areas of the business. The modern FD has to be empathetic to the varying needs of the entire team. It is difficult to fully contribute to the commercial success of the business without an understanding of all aspects of it. 

At one stage of my career I made a conscious decision to take an operational role. It took me out of my comfort zone but in terms of understanding the industry it was invaluable.

Finally, it is vital to surround yourself with a strong team. One of the major benefits of a start-up business is the ability to select a team from day one. This has enabled me to recruit talented and enthusiastic staff at all levels who will support me in implementing the systems and procedures required to ensure that Baxter Freight is a success in the coming years.

Steve Rafferty is finance director at Baxter Freight, one of the UK’s fastest growing logistics businesses. He is the former Group Finance Director at RH Freight, prior to which Steve held senior roles within parcel companies, airfreight operators and multinational logistics companies, amounting to over 25 years experience in the freight industry.


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