Move Logistics chief executive Craig Evans. Photo / Supplied
It’s been a patchy few years for Move Logistics, but new chief executive Craig Evans says the company is on its way towards a more settled earnings trajectory.
Move, with an annual turnover of $349 million, is much smaller than market heavyweight Mainfreight ($5.7 billion) but Evans, who spent most of his career with Mainfreight, doesn’t see it as a David and Goliath story.
Evans started with Move in January and concedes that it’s been a patchy few years, mostly reflecting a rush of acquisitions early in the piece, while Mainfreight has had about 45 years of steady, incremental growth.
“It’s a different proposition for me,” Evans says.
“Yes, I came from Mainfreight – I understood the lessons and investments that myself and many others did over those years, but this business is in a very different start position.
“This business has all the upside to be a strong alternative, not to replicate what they [Mainfreight] have done.”
Evans sees Move’s point of difference as offering a much broader service than its competitors, with what he says are strong virtues in domestic and international freight, warehousing, and even transtasman shipping.
Move is one of New Zealand’s largest end-to-end logistics experts, freight forwarders and warehousing providers.
It is also involved in “4PL” — fourth-party logistics — where manufacturers outsource management of their supply chain and logistics to an external provider.
And it is also one of New Zealand’s biggest private domestic freight and logistics platforms, with a network of branches, depots and warehouses.
The company’s result for the half-year to December 31 showed revenue for the six months was $169.5m, down 4 per cent from the prior comparable period, while its loss came to $1.5m. For the 2022 year, the company reported a bottom line loss of $3.1m, which compared with a $1.3m profit the year before that.
The operating environment increased pressure on the business in the most recent financial year, with increasing costs. Trading volumes in freight and fuel were below expectations, reflecting the impact of Covid-19 on fuel deliveries in the first half.
In July 2021, Move embarked on a two-year plan to work its assets more smartly, and Evans says that process is largely complete.
Move covers a broad range of services, from standard freight through to heavy haulage — its Tranzcarr Heavy Haulage division has carved out a speciality in delivering huge wind turbine parts to remote wind farms.
The company, formerly TIL Logistics, joined the NZX in 2017 after a reverse listing through Bethunes Investments.
It is the sum of many constituent parts.
“To bring all those together in one company has its own challenges,” says Evans. “We are now in a stabilisation phase of that strategy and it’s going well.
“We have a bit to tidy up as we come out of that change strategy, but we have a lot of positive stuff that is emerging now.”
At its half-year result, Move said the second half — which has just finished — would be challenging, and Evans says that prediction has held true.
Many businesses have been through tough times over the Covid period, and more recently with extreme weather events.
Inflation running at an annual rate of 6.7 per cent has made businesses acutely aware of their costs. Evans says the upside for Move now is that the market is “more attentive”.
“The doors are opening for an alternative. Whilst it is tough for those who are more mature than us, it’s not as tough for us as an emerging entity.
“Yes, it is tough, but we see opportunities.”
Evans said at the half-year result that management was on a journey to position the company as a solutions-driven transport and logistics business, or in other words, as a one-stop shop.
In an interview with the Herald, he acknowledged freight had been weak, but that was part of a global trend from which the company is not immune.
Move’s Transtasman shipping pilot — the Atlas Wind cargo vessel — is in its early days and is going better than expected, he says.
Evans started his career with Freightways in Hawke’s Bay before joining Mainfreight.
“Long story short, I met [Mainfreight] founder Bruce Plested, who offered me a job in 1987.
“I liked the vision that Bruce presented and what the business could achieve against what was a very heavily regulated, unionised industry that was never sexy.
“Transport was not seen as a good career move in those days, but Bruce made it sound so exciting.”
Thirty-five years later, Evans left Mainfreight in January last year. When the opportunity came up, he decided to become part of Move’s change strategy.
He says the company is now focusing on higher margins.
“We are having a different discussion with the customer base to move into the higher margins.
“This business has been caught in the trap of being in a bulk-thinking, legacy business operating on low margins at the least cost to produce a bottom line of some sort.
“We have moved from that mindset into broadening the capability of this business — that allows us to have a different conversation with the market in a far broader market sentiment,” he says.
“We have come out of the tunnel and are blinking in the light.
“I would be disappointed if that stability is not deliverable, or on an even keel, by the end of this year or early next year.
“By early next year, we will certainly see things settle down for us.
“Our goal is to achieve a different position by June 30, 2024.”
In the age of the internet, consumers have become accustomed to “just-in-time” efficiency, but Evans says that might need to change as the economy decarbonises.
“The market wants the benefits of a low-carbon economy, but the just-in-time behaviours will slow that down,” he says.
“If a customer allows you two or three days to get a parcel from Auckland to Wellington, other than overnight, then that allows you the efficiency of loading more units, so fewer trucks get sent, or you can see rail as an alternative.
“It brings a whole lot of opportunities into the mix and delivers a much better carbon equation that people are seeking.”
Evans says consumers need to be asked the question: do you actually need it tomorrow?
“We are all guilty of it.
“We order over the internet and expect to walk down the driveway as soon as we have pressed the ‘send’ button.
“It’s very hard to achieve reduced carbon emissions when you get those sorts of behaviours,” he says.
“Covid proved that the world does not fall off its axis because it’s not just in time.
“Faster and smaller equals a higher cost for carbon. Slower and bigger equals less carbon and a lower cost to serve.
“The problem is that the market has been conditioned into thinking that that’s what they need.”
Instead, consumers need to be asked if just-in-time is what they really want.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
OPINION: Ferries dilemma reveals deeper port strategy issues.