Import Services is the only company with quayside warehousing immediately adjacent to the container terminal in the Port of Southampton. Managing director John Eynon tells Tim Wickham why that’s a crucial factor in supporting the demanding delivery expectations of customers like John Lewis, Amazon, Asda and Argos.
The Southampton area was the logical location for John Eynon when he had the opportunity to set up his own logistics business in 1984. He’d been working for a Midlands company that imported and exported toys when it hit financial difficulties. One of his main customers asked him if he could take over its work, with the proviso that he ‘went south’, as 99% of its goods came through the docks at Southampton.
“I opened my first warehouse in a unit on an industrial park in Fareham and didn’t have much of a long-term plan. I needed a job and this made sense,” Eynon recalled. “If an opportunity walks in front of you, you either grab it or you don’t.”
Eynon began with bank funding and brought two colleagues from the previous business. Import Services has grown steadily every year since then. The company handles B2B transactions, mainly from suppliers in China, for onward distribution to businesses to sell to their customers. Toys of all types are its main cargoes and in recent years Eynon has added homeware and sports products. Around 90% of the goods it imports are for the UK market and the rest are re-exported.
The company has warehousing for 10,000 pallets at Hedge End, another 10,000 pallets at Nursling, 32,000 pallets at Southampton’s container quay – and is looking for more space. It currently handles over 250,000 orders involving 4.4 million cartons a year.
It’s a business governed to a large extent by space – how much it has and how much it needs. This juggling act has always been the company’s main challenge and biggest risk. “Our clients tend to give us three-year contracts; landlords have much longer lease contracts, with a five-year break, if you’re lucky. It’s a question of finding the right space at the right time,” said Eynon.
Phil Munn, a VAT partner at leading audit, tax and consulting firm RSM, felt that this was consistent with many other local businesses, in that finding suitable property – along with developing technology solutions (noted below) were key challenges in achieving enduring competitive advantage.
Import Services employs 100 staff with around 14 of these in customer-facing roles. Annual turnover of £20m in 2016 rose to £21m in 2017. Seasonal demand for goods requires some double shift and 24-hour shifts. “The period around Christmas when we need to work longer hours is getting shorter each year,” Eynon noted. “A lot of consumer purchasing is being done at the last minute with our customers promising high-speed delivery. So the quicker we empty containers onto pallets the better, which makes having the quayside warehouse a real advantage.”
Eynon has carefully avoided the distribution element of such a time-critical supply chain. “I’ve never wanted to get into the freight side. Haulage companies operate on extremely tight margins and face constant battles. It’s easier if we get our customers to collect their goods, so we are no longer responsible for them,” he said.
The days of Import Services navigating through mountains of paperwork to a soundtrack of a humming telex machine are long gone. Although Eynon laments the simplicity of telex, he is also something of a pioneer in software development. He began using computers back in the 80s with constant process improvement at the centre of the company ethos and is proud of the positive customer feedback the company receives about its secure portal.
“I think our bespoke logistics technology has always given as a strong competitive advantage. We invest about £30,000 a year on software upgrades.”
As for the potential threat of Brexit, Eynon is understandably frustrated but not overly concerned. “Nearly all the goods we handle come from outside Europe, so we probably won’t be affected too much by the UK leaving the EU. Though we’ll have to see what rules they finally work out for importing and exporting with EU countries.”
Reflecting on the interview, Munn highlighted that Import Services’ success was much more than reacting to short term factors, noting that “during our interview two things became very clear; John was crystal clear on Import Services’ strategy and he understood that the company’s success is built on developing and maintaining long-term client relationships built on trust and reliability”.