Freight expectations: Inside the sector’s busiest year
It’s an oft-used phrase in 2022 that the live music business is packing three years’ worth of activity into one year, as postponed festivals and tours from the pandemic period concertina alongside new tours and events around the planet. But, while there will undoubtedly be certain artists and outings that become casualties of the resulting vastly oversaturated marketplace, on paper, at least, the windfall for the likes of contractors and suppliers should help make up for some of the darker, revenue-free days that Covid inflicted.
In the freight and transport sector, the order books are full. Indeed, backlogs of requests remain seemingly permanently on reserve for those acts still scrambling to find solutions to get back out in front of their fans, while standard industry practices such as double drivers are all but non-existent for the foreseeable future such is the dearth of trained and skilled people.
“To be totally honest with you, everyone is working as hard as they ever have – but always with a smile on their faces, and no one is complaining,” reports Rock-it Global managing director Chris Palmer. “Because we had nearly two years without any kind of significant touring, everyone is just so hungry to get back to what we know and love best… 2022 is shaping up to be the busiest year I’ve known in over 20 years in the industry.”
“Everyone is working as hard as they ever have”
KB Event CEO Stuart McPherson comments, “We have everything from the biggest stadium tour on the road out right now (Ed Sheeran’s Mathematics) through arena tours such as Little Mix, Craig David, Stereophonics, etc, down to theatres with the likes of George Benson, Gregory Porter and many, many others. We are running from Malta to Finland with acts like Bring Me the Horizon, and we’re doing just about every festival on the circuit with various acts and production trucks over the summer.
“The volumes we are experiencing with re-scheduled tours and shows, coupled with new tours, festivals and events, are like nothing we have experienced in 30 years,” he continues. “This has been exacerbated by the challenges placed on the trucking industry by the TCA [Brexit deal]. The temporary dual registration easement agreed in March, with a planned permanent arrangement in the autumn, means that KB are able to service the European tours we are booked on.
“But the big challenge facing our sector is that there are now only five companies in the whole of the EU – KB being one of them – that are established and able to take advantage of the dual registration agreement to service tours throughout the UK and EU. This sees a huge demand for these services with a much-reduced resource pool to support the industry requirements.”
“The volumes [of events] we are experiencing are like nothing we have experienced in 30 years”
All too aware of the importance the sector has on delivering live music to the masses, Lisa Ryan, group CCO for EFM Global, comments, “Logistics is a hot topic at a much higher level than previously, due to the many ongoing challenges facing the industry, culminating in the perfect storm for everyone involved in touring.”
Detailing the various aspects contributing to that perfect storm, Ryan listed the main issues: ongoing global supply chain disruption (including port congestion and unreliable schedules), reduced space capacity on board flights and vessels, high fuel prices and unprecedented rate levels for international air and sea freight in particular.
Extremely high demand for ATA Carnets, short supply of trucks and drivers (particularly traditional music tour truckers) and shortage of “spare” aircraft available to the private charter market and resourcing, including staff.
“My advice is to plan to be late and over budget – in other words, don’t underestimate the budget or the length of time it may take to get from A to B to C on tour,” says Ryan. “Plan ahead, allow contingency, and keep last-minute changes to a minimum, where possible.”
“2022 is proving our busiest year to date after 40 years in operation”
It is sound advice that finds a sympathetic ear with Transam Trucking chief Mark Guterres. “2022 is proving our busiest year to date after 40 years in operation,” attests Guterres, who explains that his business experienced tremendous upheaval even before Covid reared its head, thanks to Brexit.
“Over three years ago we moved a large part of our European operations from the UK to [the Republic of Ireland] and the Netherlands, long before Brexit, so therefore our European operations have been running smoothly for some time now.” He adds, “Our biggest problems continue to be caused by the lack of preparation and planning by the UK authorities.”
Indeed, Guterres himself is now based in Auckland, New Zealand. “Here, I’m nearly a day ahead of the USA and therefore I can bridge the gap between our European offices and operating centres and our US-based customers,” he explains of his antipodean relocation.
New Kids on the Block
Of course, the coronavirus crisis radically changed the world as we know it, and in live entertainment, many companies folded, skilled people left the business entirely, while others used the moment as an opportunity to launch new enterprises to shake up and disrupt the marketplace.
In the freight game, one of the significant players to emerge from the pandemic is Freight Minds – a collection of vastly experienced individuals who initially set up a logistics company called SFW Logistics before morphing into the latest incarnation.
Based at London’s Heathrow Airport, Freight Minds got off the ground in August 2021 when industry veterans Alan Durrant, Geoff Knight, Matt Wright and Chris Jenkins began offering services including air passenger and cargo charter; warehousing and logistics; couriers; ATA Carnets; and Brexit-related customs clearance services both into and out of the UK via road.
“These companies are rapidly trying to recruit staff to plug the gap, but the pandemic hasn’t helped”
Addressing the current situation in freight, Wright tells IQ, “[Pre-Covid] we could reasonably rely on published ocean line schedules with the occasional hiccup. Now it seems to be the opposite: permanent hiccups with the occasional vessel running on time.
“There’s been a massive staff reduction in the supply chain since March 2020, and the way these companies communicate has now changed. The vast majority is now expected to be done via email, which isn’t always the easiest way to discuss matters. These companies are rapidly trying to recruit staff to plug the gap, but the pandemic hasn’t helped and Brexit has compounded that further.”
He adds, “Only operating as a new business, the work has hit us like a tidal wave, which has been amazing for Freight Minds, but it’s come with its challenges as we only have so many hours in the day to service our customers.”
One inescapable horror that is affecting companies across the transport and freight sector is Russia’s war on Ukraine, which has prompted fuel prices to soar and contributed to rising inflation. But there are other costs to contend with as well.
Noting the ever-increasing price of diesel and other fuels, KB Event’s McPherson tells IQ, “Tours and shows are booking so late at the moment that we are quoting pretty much at fuel rates as they sit. However, our drivers’ wages have increased by 46% since August 2021, and for anything we are quoting on that’s more than a few weeks away, we are having to put in contractual clauses to say that we will review the fuel costs prior to start up.”
While those staff wage rises are inevitably passed on to clients, McPherson is at pains to highlight that ongoing fuel cost reviews should lead to lower quotes at some point. “We are being very clear with clients on what fuel rate we are quoting at, and we’re being absolutely transparent that if fuel costs reduce when we are live, we will reduce our charges,” promises McPherson. “It is unreasonable to expect clients to cover fuel increases but not to offer a reduction when costs reduce.”
“Logistics costs, whether via air, road, rail or sea, have been soaring for months and are showing little sign of slowing down”
Elsewhere, Ryan notes that freight forwarding costs have also taken an unprecedented leap, meaning that fees for moving equipment from city to city, country to country and continent to continent have soared, post-pandemic. “Logistics costs, whether via air, road, rail or sea, have been soaring for months and are showing little sign of slowing down in the immediate
future,” states Ryan.
“Factors driving these price increases are ongoing global supply chain disruption, port congestion, reduced capacity in tandem with increased demand, staff shortages, high fuel prices and now rising inflation levels in many locations. Plus, the ever-present impact of Covid-19.”
While Ryan is reluctant to specify general ballpark figures, “as it varies dramatically on different routes,” she tells IQ that costs have at least doubled and significantly more in many cases. “I can tell you as an example that from the Far East to the UK, the sea freight rates around the time of the Tokyo Olympics had increased to more than five-times pre-pandemic levels,” she adds.
In tandem with many businesses forced to curtail normal operations during the pandemic, Rock-it Global’s senior management team used the downtime as wisely as possible in an effort to ensure the company was ready to hit the road running when the green light was finally given.
“We had the foresight to hire a good number of people at the back end of 2021 as we could foresee what was going to happen with the explosion of work,” says Palmer. “For me, it is incredibly important to protect the team we have, so we always want to have enough people to cope with the demand. I have an incredible team, from operations to business development to warehouse and transport – and they all manage their own parts of the business – and my job is to make sure that they all have the tools they need to make it all work.”
As the transport business involves a continuous programme of hefty investment, its protagonists, although unprepared for Covid, were nevertheless quick to adapt to the conditions imposed by governments around the world. Guterres notes that his company rolled out an extensive expansion project prior to the pandemic that is only now beginning to pay off.
“Shame on Great Britain as most of our trucks are now EU registered”
“Apart from our UK operations centre, we have Transam Trucking International Ltd based in Cork, Ireland; and Transam Trucking B.V. based near Schiphol Airport in the Netherlands,” he says, adding, “Shame on Great Britain as most of our trucks are now EU registered.”
KB’s McPherson reveals, “We have spent in excess of £3m [€3.5m] on additional trucks and trailers in the last three months to expand our fleet, but this resource has just been swallowed up, and we find ourselves, on a daily basis, having to turn tours and shows away, at the moment.
“KB are also actively employing management and administration staff and staff to bolster our front-line teams, and we are expanding our director team. We are on a very aggressive employment drive to broaden and train our driving team. But finding the quality of people we are looking for is proving a real challenge.”
Improving Working Conditions
The ability to recruit – and retain – staff has become a multifaceted task. The pandemic saw thousands of employees who were furloughed or made redundant find employment elsewhere, and rather than that work being viewed as a temporary solution, many people are opting to remain in new occupations that often involve more sociable hours and better working conditions.
That situation has upped the ante for HR and recruitment experts, while one key issue that Rock-it’s Palmer is keen to tackle is in improving welfare conditions for personnel. “Mental health is a very important subject for me as I have struggled a lot in the past, and I never felt I got the support I needed, so that is one thing I was very keen to change,” Palmer tells IQ.
“With this incredible tsunami of work comes challenges of keeping everyone in a good place mentally. A large part of that is making sure that we have enough people at the pumps so that we can all take a break when we need to,” he explains. “We continue to hire new starters and train them – and, importantly, we have retained all of the key staff that we supported through the pandemic so that we are now ready to deal with these challenges with a smile on our faces and a spring in our step.”
“The market itself just has to learn to circumnavigate the current challenges”
But it’s not all gloomy news on the recruitment front. EFM’s Ryan states, “From our perspective, we have been fortunate to have re-employed the key staff that we lost over the past few years, along with employing a number of excellent calibre new staff around the world. We took the time to invest in systems and training, which is now paying dividends, and we are currently opening three new overseas offices in Europe and the Middle East in response to demand from clients.”
Freight Minds is also expanding. “The next two years represent a huge opportunity for Freight Minds to show its wealth of in-house experience, which at the moment is up to around 150 years as we’ve just had Andy Lovell join us,” says Wright.
He adds, “The market itself just has to learn to circumnavigate the current challenges and continually learn to adapt to the new post-pandemic world and the challenges that Brexit has thrown our collective way. What was normal in 2019 is no longer normal.”
Pre-pandemic there was an accelerating drive by artists and others to improve sustainability across touring and live music, while diversity and equality were no longer being seen as buzz words but more essential elements of a 21st-century industry.
In the rush to get back on the road some of those concerns may not be as prevalent, but as the recovery transforms – hopefully – into a business-as-usual situation, they will undoubtedly start creeping back up the order in terms of priorities, meaning the transport sector needs to keep working on potential solutions to present to clients.
Looking ahead, Palmer predicts that once the crazy circumstances of the coming year subside, the core values that were coming to the fore pre-pandemic will once again become significant, industry-wide.
“I am certainly still being asked regularly by clients both old and new about our carbon offset programme that we have”
“A lot of our blue-chip-type clients are now asking us about our [environmental, social, and governance] policies as part of the vetting process before we even get to the quoting stage,” reveals Palmer. “I am certainly still being asked regularly by clients both old and new about our carbon offset programme that we have in place, so it’s clearly still a concern within the industry.
“I believe that after this initial rush of madness, we will get back to the points that matter for long-term sustainability in our business – looking after our planet and looking after our people.”
At Freight Minds, Wright notes that sustainability remains on the agenda, “But with the ever constant changing world of logistics due to carriers cancelling flights or ocean lines adjusting schedules, there is an element of constantly putting out fires just to try and get the equipment to the next show on time. With that being said, it’s still a very important subject and one that we can’t ignore,” says Wright.
For his part, McPherson is committed to reducing the carbon footprint of his company’s activities. “As KB was the first trucking company in the UK to get accreditation to BS8555 (Environmental Standard) back in 2007, it has been very high on our agenda for a long time,” he says.
“KB started pushing the use of Hydrotreated Vegetable Oil (HVO) as fuel, and looking at more sustainable routings”
“In 2019, KB took the fight to the market and started pushing the use of Hydrotreated Vegetable Oil (HVO) as fuel, and looking at more sustainable routings. One of our big corporate clients [was] the first to really buy into this with a 50+ artic show for Google in Barcelona. Sadly, very shortly after this event, the pandemic hit and the industry ground to a halt.
“During the pandemic, we continued to work on and develop our sustainability strategy and engage with the industry leaders to inform and advise. This included giving formal presentations to the TPG on sustainability in trucking. This has certainly been carried into live with some of our clients, with acts like Bring Me The Horizon and Enter Shikari buying into full HVO (non-palm-oil source) fuelled touring. The quest continues…”
Targeting Vertical Markets
Despite the current boom times, the experience of the pandemic has taught those working in live music’s transport and freight sector that the ability to be nimble and identify other business opportunities is a crucial skill to ensure corporate survival.
Indeed, Palmer reveals his company is looking at other areas to fulfil the company’s ambitions for future growth. “At Rock-it we are very realistic,” he says. “We have traditionally had maybe [about] 75% of the live music touring market, and we know that there are some truly excellent other freight companies out there. So we are looking for growth in other sectors where we can use our learned skills in other verticals such as TV and film, sports broadcast, e-sports, theatre and art, amongst other things.
“During the pandemic we pivoted in various directions – as did many of our compadres in transport and freight – and we have seen that there is a huge market for skilled freight forwarders in the ‘time-sensitive’ market in the aforementioned verticals. We are growing all the time, but we are also focused on the next ten, 15, 20 years, and we are not looking to capitalise on what is happening right now to make a quick buck – we are planning for the future so that we have a strong and skilled team and a varied client base.”
A Rosy Future
Having endured two catastrophic years, transport and freight operators are understandably happy to finally be back problem-solving the live music industry’s logistics nightmare.
“We have been inundated with truck and Carnet requests with the European Festival season in full swing, and we are handling one of the logistically biggest music tours this year, for Rammstein,” reports Ryan.
She muses, “The business had doubled year on year in 2019, and after the obvious downturn across the entire industry, we are now ahead of where we left off pre-Covid, thanks in part to the other areas in which we operate that came back to life considerably earlier than music and theatre touring – TV and film, exhibitions, hotels, aerospace and automotive, for instance.
McPherson warns that while 2022 might feel like a gold rush, expansion in the sector will involve some patient planning
“Now we are laser-focused on maintaining our high service levels for the customers, continuing our innovative ways of operating and investing in our people and their well-being.”
Wright comments, “The next two or three years will certainly be a challenge for all of us at Freight Minds but given our collective experience from years of doing what we do, we will be able to guide our existing and prospective clients through the new world that we all cohabitate.”
Rock-it’s Palmer is in a similarly optimistic state of mind. “In terms of our operations, we’re in a good place to be able to cope with the rush, and we are working in tandem with all sectors of our industry from booking agents to promoters to make sure that shows can go ahead despite the financial and operational challenges that we’re facing.”
However, McPherson warns that while 2022 might feel like a gold rush, expansion in the sector will involve some patient planning, and he believes that there could be another wave of mergers and acquisitions as the sector evolves in the post-pandemic period. “There is certainly the opportunity for strong organic growth at the moment, but we believe that the current demand is not representative of the medium- to long-term picture,” he tells IQ.
He concludes, “KB plans to continue to grow organically at a sustainable pace over the coming 24 months, but in reality, this is somewhat hampered by the availability of new equipment: truck and trailer lead times won’t see new kit that is ordered now on the road much before summer to autumn of 2023. To that end, we are seriously considering what options are available for acquisitional growth or strategic partnership.”
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