Mainfreight always moving forward

By Dita De Boni

Bruce Plested throws his head back and laughs heartily when asked to describe himself as a boss.

The managing director of Auckland-based freight-forwarding company Mainfreight and passionate philanthropist, Mr Plested is stumped for an answer.

"All I know is that when we started the company I realised that I wanted to make a difference to this country, to give people something better and cheaper - real, quality transport," he says.

And this has largely been achieved, although a snapshot of the company's financial results for the year to March 1999 shows a thriving domestic-based company still teething in the coveted Australian and international markets.

In an industry where, in the years to 1999, earnings before tax slipped dramatically across the board and the industry average return on equity was stuck below 7 per cent, Mainfreight has doggedly built an empire under the fallout of deregulation which it is now attempting to extend across the Tasman.

Mainfreight's "caring" corporate culture is also widely attributed to a manager with a vision and an entrenched "100-year philosophy".

From its humble beginnings in 1978 when Mr Plested, a former accountant, used $7200 to hire a solo owner/operator, Mainfreight has grown to be New Zealand's largest multi-modal freight-forwarder and is currently attempting to make serious dents in the Australian market against such giants as TNT, Linfox and New Zealand's Owens.

Mr Plested says he was up against the same giants in 1978 in New Zealand, and they didn't faze him even then.

"The competitors were hugely strong, they were all in the top 25 companies in New Zealand, and they utterly dominated the market.

"We [Mr Plested and partner Neil Graham] did not expect to succeed on the scale that we have, but we realised after the first few months that we really had a place in the market."

Although Mr Plested takes pains to point out that the very powerful truckers union was "extraordinarily helpful" to the company in the early days, Mainfreight managed to avoid rigid union regulations in those years by employing owner/operators.

"We moved all our freight by sea between Auckland, and Christchurch and Dunedin, and we worked weekend shifts to make sure we loaded and unloaded the ship using the whole of the seven days - we found that was faster and more reliable than our big competitors."

Deregulation of all kinds was to play a huge part in the Mainfreight success story, but again Mr Plested remains conciliatory about the myriad of rules and regulations which kept the oligarchies of trucking so powerful in the years before 1984.

"Up to 1977, goods could only go 40 miles on a truck, and any more than that they had to go by rail or by sea," he says. "In 1977, the distance became 150 kms, and so on, to give NZ Rail a period to adjust.

"But it's not that crazy really, - every country has to build its railway and protect it - I think it was the right thing to do at the time."

Chris Dunphy, general manager of Mainfreight's international division, says after prohibitive distance rules were abolished in 1985, the huge players came tumbling down and smaller, more flexible companies blossomed.

"It's one of the extraordinary success stories of deregulation, " he says. "Mogul, Freightways and TNT had every single piece of freight in the country by right. So when deregulation came, they had to lose some and to keep downsizing - and then they lost morale and some gun managers."

In fact, Mainfreight was to subsequently buy former competitors, including Daily Freightways and Chem Couriers in 1994, 75 per cent of Lep New Zealand in 1996, and Combined Haulage and Senco Haulage in 1997.

Transport industry analyst for Warburg Dillon Read, David Fraser, says that Mainfreight's owner-operator company culture has had a huge positive impact on its bottom line.

"Companies like Tranz Rail have some problems they have to overcome yet - the old state workforce mentality has to change to a whole new culture, whereas Mainfreight started off with that [de-regulated] culture and everybody they've brought in has been moulded that way as well."

The culture at Mainfreight has also been shaped by the philanthropic activities of Mr Plested, who has placed the company firmly behind initiatives such as the Books in Homes project in South Auckland and day visits to depots by local IHC children.

Mr Plested believes his 100-year philosophy - which he now considers not long-ranging enough - will be fulfilled through the company keeping its reputation for caring about the environment, the community, and the freight it carts.

"We wanted to get our workers to care about something bigger than the day-to-day thing."

The company started recycling in 1987, - first bottles and paper, then plastic, tin, broken wooden pellets and finally rainwater caught in giant 30-gallon tanks and used to wash dirty rigs.

Mainfreight moved to Australia in 1989 after long-time client Fisher & Paykel asked for distribution and storage assistance in Sydney.

The environment in Australia is similar to New Zealand in the mid-1980s, with trade unions trying to maintain their power base in an industry in the final throes of deregulation, Mr Plested says.

In fact, the company blames a significant part of its Australian operations loss of $887,000 in the year to March 1999 on waterfront strikes which Mr Dunphy describes as Australian wharfies protesting against "productivity-type initiatives".

He says despite the less-than-glowing result from Australia this year, the company runs the risk of becoming insignificant if they aren't operating on both sides of the Tasman.

Whereas in New Zealand the core of the industry is transport, Mr Dunphy says in Australia the challenges are a mixture of a more regulated working environment and customers who need more efficient distribution and warehousing systems.

It looks as though 57-year-old Plested will rule the roost at Mainfreight for some time to come, and while he may be short of words to describe his management style, his right-hand man certainly is not.

A "tin-clad marshmallow" are Mr Dunphy's first thoughts, but he retracts that and settles on "visionary".

Mr Plested seems to be comfortable with the second description and graciously answers the original question. "A fire that just won't go out. That's what I think bosses have - a passion that's bigger than your own company."