Freightways managing director Dean Bracewell speaks to DIESELtalk editor Robert Barry on the importance of being profitable, embracing diversity and equal opportunity, and identifying opportunity in an always changing environment.
When asked what makes a good corporate citizen, Dean Bracewell immediately and candidly replies that it is one that makes a profit.
Appointed Freightways managing director in 1990, Bracewell says ensuring the company remains profitable to allow it to invest in people is a priority, “And means we can afford to act as a good corporate citizen.”
The Freightways Group operates its many brands in a niche market, moving time-sensitive items up to 25kg in weight for local, national and international customers.
Bracewell says the company builds its strategies to support four key operating objectives under the titles of positioning, people, performance, and profit.
When the volumes of freight fell for the express package industry in the year following the Global Financial Crisis, the Freightways Group was strong enough and flexible enough to survive the downturn without resorting to restructuring or redundancy, according to Bracewell.
He is rightly proud of this fact, and he is also part of driving an openly communicative culture within the Freightways Group, which embraces diversity and equal opportunity.
In a historically male-oriented industry, Bracewell notes that more than 30% of the Freightways management team is female, and a woman is sitting in the position of chairman of the board.
“We’ve had a long culture of equal opportunity within the group, and have actively championed it, and it’s part of our people objective that we will strive to promote from within the company, it’s just common sense, ” he says.
Today Freightways employs more than 3500 people in its three core businesses — express package, business mail, and information management.
The company’s initial public offering on the NZX took place in 2003, and today there are more than 7000 shareholders.
In the 2016 financial year, the company’s revenue was $505 million, earnings before interest, taxation, and amortisation were $88M, net profit after tax was $56M.
Diversification and the internet disruption
Bracewell says the Freightways Group will continue to organically develop opportunities in the three markets in which it operates, to build upon the diversification which it started in 1999.
“We are looking for greater penetration in the information management sector, and we will position the businesses as innovative market leaders that are relevant to customers,” he says.
“We will look into acquisition opportunities as they arise.”
“Management and the board are aware of the disruption at play within our sectors from evolving technology-based solutions, and we see it as an opportunity. Our operating environment has been one of change for most of the lifetime of the industry. Our job is to work alongside our customers, and make relevant changes as they are ready to change, and as we do,” he says.
“The biggest disruption to our industry has been the massive growth of express parcel deliveries from online retail businesses to consumer (B2C) instead of the traditional business to business (B2B) model.”
Introduced more than five years ago to help consumers shopping online, “Pass the Parcel has grown far beyond the original platform of supporting Trade Me members,” he says.
“Consumers don’t all necessarily understand our industry, so we listened carefully to retail customers to provide them with the services they wanted.”
Bracewell says, “It was a great starting point for us to be able to accommodate a unique set of customers.”
EV must be commercially viable
Bracewell says the Freightways Group is positioning itself for the day when electric vehicles are a sound and proven commercial proposition, and it is already installing charging stations for such vehicles in new facilities such as its Dakota Park building near Christchurch Airport.
“Any new vehicle must meet the high standard of reliability of our current fleet, so we’re not leading the charge, but we are across it,” Bracewell says.
“We will have hybrid and EV vehicles in the fleet in the future, but they will have to be practical and proven technologies, it has to be commercially viable for our 1100 independent contractors and us.”
He says, “Our linehaul fleet tends to consist of European brands, and the contractors turn them over every five to seven years, as they clock up high mileages.”
The heavily networked express parcel company operates a hub and spoke system which maximises on-road efficiency for its contractors, and for moving the freight from depot to depot.
Bracewell points out that building density of business within an existing contractor-run territory also helps reduce the company’s overall per-item carbon emissions.
Health and Safety is top priority
Bracewell says that health and safety are the number one management priority at Freightways Group, and the company was tertiary accredited by ACC more than a decade ago.
“When the new legislation came in we were able to build an increased focus off an already solid platform, and health and safety are always the first items on the agenda for management and board meetings.”
“It has always been and will continue to be management’s top priority to build a culture of health and safety throughout the business,” Bracewell says.
“We know we are in a business surrounded by high risk,” he says, “So it’s important to identify those risks and ask if you have the right tools and strategies to address that risk across the businesses.”
Operating environment
Bracewell says the Freightways Group is encouraged by the investment in the road network and infrastructure by central and local government.
“It’s heartening to finally see the emphasis on investment to keep the supply lines open,” he says.
“To keep the economy moving, we must have the roading infrastructure to keep the supply chain open, we would have liked to see it happen earlier.”
Bracewell concludes, “We are also encouraged by the government working with the Road Transport Forum on streamlining the driver licensing regime for heavy vehicles, the hurdles need to be realistic, and the government seems to be supportive of this.”
