Dave Sewell looks at how Eddie Stobart is boosting its profits on the back of cutting workers’ wages and conditions
From children playing “Spot the Stobart Lorry” on motorway trips to the Channel 5 TV documentary, haulage company Eddie Stobart has a knack for having good PR.
But as an ongoing strike at the firm shows, it is one of the keenest players driving through a vicious new business model in road logistics and distribution.
Its aim is to have fewer workers on worse conditions as it rakes in the profits by beating its rivals on price.
The current strikes involve more than 180 workers that Eddie Stobart is trying to sack in Doncaster. They used to be employed by Tesco, until the supermarket giant transferred them and their work to the firm in August.
“We’re on strike because Tesco gave Stobart our contracts and gave us 90-day notices,” one of the workers, Barry Lee, told Socialist Worker. “Tesco is making huge profits. We believe they are collaborating with Stobart to give us a raw deal.”
This case isn’t a one-off—it’s central to how Eddie Stobart works. When supermarkets use Stobart lorries they only need to pay for the loads they move, instead of keeping a workforce during times of lower demand.
The boss, Andrew Tinkler, calls this form of outsourcing a “pay-as-you-go” model. “The secret,” his predecessor Edward Stobart explained, “is never to have an empty truck. If you take lemonade down somewhere, bring water back up.”
The further this model spreads, the more the overall number of trips is reduced—and the more pressure is piled onto the remaining drivers.
A survey by the bosses’ Freight Transport Association (FTA) revealed that 45 percent of its members had made redundancies last year. An even greater number had cut hours.
In the face of recession and the rising cost of fuel, the FTA says, firms “continue to focus on labour as an opportunity for cost control”. This means attacks on jobs, wages and conditions.
A driver who had had the FTA’s average wage settlement every year for the last four years would now be more than 5 percent poorer after inflation. For many it is worse.
“We were on Tesco terms and conditions,” said another former Tesco driver. “They want to get rid of that, get people in on Stobart terms. They’ll be £3 an hour cheaper, without our pension or sick pay.”
The drive to cut has certainly boosted bosses’ profits. But it’s double edged for them—because they are far more vulnerable to disruption from those workers that remain.
So when almost 2,000 oil tanker drivers were balloted for strikes earlier this year it caused a massive political crisis. Even though their Unite union never actually called them out.
If they had struck it would have quickly meant shortages at forecourts and airports across Britain. It was a strike and mass pickets that won Shell tanker drivers a 14.5 percent wage rise in 2008.
The previous year Eddie Stobart had offered drivers £500, plus a stay at a top hotel, if they broke a strike by Tesco workers at Livingston, near Edinburgh. They refused. According to Unite, only a quarter of Tesco’s normal loads went out to stores.
There’s a dark side to haulage giant Eddie Stobart’s cuddly image. Besides giving all its lorries women’s names, the firm is most famous for its former owner’s insistence on having a “professional image”.
In the 1980s and 1990s, if any driver was caught not wearing a tie while on duty, they could face disciplinary action. Not the most practical or comfortable measure for a long day in a cab.
But then, “the tie wasn’t the important thing about the uniform,” according to former boss Edward. “It was the discipline.”
That must be the same “discipline” that saw 40 of the Doncaster workers turned away from work this September after being spotted on a protest against their imminent sackings. Bosses told them that they weren’t fit for work.
The firm isn’t always as scrupulous about drivers’ tiredness. Fatigue was one of the main issues raised by the firm’s Tesco drivers in Ireland when they struck in February.
And millionaire Stobart certainly didn’t always live up to the standards he set. He was given a 20 month driving ban after getting caught drunk at the wheel.
The rise of road haulage came about as governments started to run down the railway network in the 1960s. Supermarkets have been some of the biggest backers of the road lobby, through the British Road Federation in the 1990s and today in its successor, the Road Users’ Alliance.
This is because, while road haulage is less efficient and less safe overall, it boosts supermarkets’ profits. Some firms have responded to higher fuel costs by switching to rail freight. Freight sent by rail has fuel costs of 10 percent of the total instead of 40 percent by road.
But most retailers resist this, because it they would have to sign up for year-long contracts rather than cutting numbers in slow weeks. Using rail would also make it more difficult for the supermarkets to pare down the network to the absolute minimum.
Now the European Union is considering relaxing regulations on US-style “mega-trucks”. These are longer than a swimming pool and heavier than a Boeing 737.
This would let firms move bigger loads at lower cost—but at the expense of safety. Meanwhile Eddie Stobart is hedging its bets. The firm has been buying up airports.
It’s not just drivers who suffer at the hands of distribution firms. Workers in warehouses are also being targeted.
Companies are replacing permanent staff with agency workers who can be taken on or sent home as demand goes up and down. This has been behind recent disputes at Argos and Wincanton, which runs distribution for Marks & Spencer.
It’s hard to tell how dangerous haulage is because the official “deaths at work” statistics don’t include lorry drivers who die on the road—they aren’t considered to be in a “workplace”.
But health and safety campaign group Hazards estimates that around 790 people died last year in work related road traffic accidents.
The drive to consolidate distribution networks is concentrating the sector in the hands of fewer, bigger firms.
And the biggest players are looking to get bigger. Eddie Stobart could be bought by French firm Norbert Dentressangle, while Wincanton has been buying firms in Germany.