Move Logistics
From Move Website - Additional info by MOVE Company Reports and added to by Share Investor.
Move Logistics Group is a 150-year-old company that is currently undergoing a transformation.
The business was formed in 1869 with the original Hooker Brothers transport company. In 1989, a new vision was created, to grow the business and expand nationwide.
They offer freight transport and warehousing services throughout New Zealand and co-ordinate freight movements offshore through their international alliances. They also have a specialist road tanker division which is one of the largest operators in the New Zealand fuel delivery market.
The Company's operations include general transport, bulk liquids, heavy haulage, shipping, storage and distribution, and freight. The Company operates through three divisions: Freight Services, Warehousing Services and Trading Services. The Freight Services division provides transportation services.
In 2021 MOVE underwent a rebrand and a new direction under acting CEO Chris Dunphy. Moving to a business where the truck operator is increasingly becoming the truck owner operator.
The Questions
Share Investor
In a way you have come full circle, after leading a division of the biggest logistics company in New Zealand - (Mainfreight)- you now lead the second biggest listed logistics company in New Zealand. So how does your approach to operations differ from that of “the Mainfreight Way” and how much have you borrowed from what you learnt while you were there?
Chris Dunphy
The Mainfreight Way has developed and evolved over the years - there is a lot to admire and emulate from their success. Equally the approach being taken by the team @ MOVe is more reflective of the combining of numerous businesses under one umbrella, as distinctive from bringing individual purchases / acquisitions to an already successful marque.
S. I
Like other New Zealand companies from 2020 till now - the pandemic and its effects are still with us - it has been a tough few years for MOVE Logistics. What have you learnt from the economic difficulties of these 2.5 years in terms of the company’s strengths and weaknesses? Has that made MOVE a stronger company?
Ours is a heartland kiwi business not an Auckland one. The industries that we serve are largely rural and regional. Keeping our teams intact and responding to our customers’ needs during and post-covid was challenging (e.g., vax mandates) as well as the disruption to normal business trading.
S. I
We have heard in the media that you are in the process of transforming the business. How is the transformation going?
C.D
Continuing, not linear and certainly requiring plenty of focus.
What are your thoughts on both the “economic slow-down” and the effect that it may have on the company & your overall strategy in both markets that you currently operate in - New Zealand and Australia?
Its real; inflation is a far bigger issue than media or the Reserve Bank are recognising (to date anyway) and we know that this inevitably causes wage & price ructions…we must get our customers to pay more so that we can retain our team members who are encountering real increases in their living costs.
Is this not the basis for inflation?
IMHO Inflation in the NZ setting is cost of living increases foisted through excessive government borrowing.
One cost goes up, so another one puts up their costs and so on. If you are leading and inspiring your team, would it not be better to become more efficient?
Of course, but the customer still must pay for the service provided.
Yes, costs are going up, but can your innovation drive cost out of the business?
To some extent (e.g., modal shift) but not entirely & that's why rates have to reflect rising costs.
S.I
Do you believe that you have responded to the economic uncertainty in an appropriate way?
S.I
How is MOVE currently doing in its various markets of operation and how well are profit margins holding up?
C.D
Switching to lower cost transport modes (ship & rail) where possible and margin testing our clients to ensure we avoid busy-fool syndrome.
S.I
What are the biggest commercial threats to your businesses in terms of competition and is your reaction to this competition likely to be aggressive or reactive in nature?
C.D
Weak competitors will engage in a race- to- the- bottom where they falsely believe that more revenue will save them from poor business practices. Strong competitors will stay focused and look for opportunities. Our path is to be very diligent with our capital, look after our customers and naturally be match-fit to deal with both weak & strong competitors.
Reader Question
What new blood are you bringing into the business?
C.D
Watch this space.
Reader Question
As I know you have a new fleet manager coming. Was he picked by you?
C.D
He was recommended by a new team member and endorsed by several existing ones. That is how we like to hire - talent known by great people.
S.I
Any business has inherent risks. How do you manage those risks in the normal business operating environment that changes due to economic cycles and other outside and inside influences?
C.D
Freight and logistics are inherent economic barometers. The narrower you are to one sector, region, or product, the more your returns reflect that metric. We need to intensify our service offering within key industry verticals and expand our footprint, starting with our modest shipping to/ from Tasmania.
S.I
What are your biggest challenges as the company expands and do you prefer organic expansion rather than the purchase of companies to pursue revenue and profit growth?
C.D
We will grow with our existing customers’ needs as well as look for opportunistic bolt-on deals that are earnings accretive.
S.I
You had one capital raising last year to restructure your business, do you intend to pursue that model again by issuing more capital or do you think you will be fine raising capital through retained earnings when you want to bolt on another company?
C.D
We’re in good shape; I am a shareholder, and my preference is to not get diluted with more capital unless there is a compelling reason to do so.
S.I
Do you expect to re-introduce a dividend?
C.D
Yes, when we can pay a fully franked dividend - equally we believe investors see us as a growth stock, so the clear intention is to grow our activities and re-invest to the greatest extent possible.
S.I
What is your opinion on bonuses paid with stock options and other incentive pay and how do you feel about executives of other NZX listed companies receiving incentives even though predetermined targets have not been met?
C.D
I believe in total alignment between shareholders, directors, management & team. If we are all shareholders, the focus is steely resolve to improve. Equally soft targets don't produce better outcomes: There needs to be real sweat before there’s equity & that means outperformance before bonuses = Do the mahi & get the treats…
S.I
What are your views on how we can get better shareholder representation in the boardroom?
C.D
Nominate people and vote @ AGMS!
S.I
Given enough time and expansion in New Zealand, you say Australia is a target. Where and when will you expand over there and any idea where your main hubs will be?
C.D
Easy - We will stay away from 800Ib gorillas and look to places where our core competencies are in demand … Tasmania looks like a good place to start.
S.I
How much input does every worker at MOVE have into the business?
C.D
Slightly less than their output.
S.I
Is there enough long-term thinking and planning when it comes to making decisions in the boardroom that affect New Zealand companies?
C.D
Maybe. There’s a lot of “paralysis through analysis” in public companies these days. I think that boards are too often inclined to engage external consultants to provide answers than back their judgement or exercise the cranium through intelligent debate.
S.I
How is the culture change going and its hard once drivers change over to the ownership model or is it easy because they now have the financial incentive?
C.D
We are creating a MOVe culture rather than changing; The mantra is “we MOVe as one” and that is both defining & self-fulfilling. Our business is equal parts owner-drivers and a company fleet.
S.I
How long do you intend to be with MOVE or is it your baby and have you committed yourself to seeing it through?
C.D
I serve at the pleasure of the board. My role as acting CEO should alter next year but I will remain as director and a substantial shareholder. A bunch of us “freight dogs” have a pact that we hope to be soon promoted from our current roles to looking after the chep pallet accounts, freight claims and washing trucks, as soon as younger/better versions emerge! To wit, we laugh (a lot) and sometimes it literally feels like the Blue Brothers as the band has been put back together!!
S.I
What would you say are the major differences between MOVE and Mainfreight and other logistics brands in the space in which you operate?
C.D
See above.
S.I
Do you have a moat?
C.D
I don't have a castle, so there's no need for a moat!
S.I
Surely MOVE is your castle?
C.D
I am an investor & employed to do a turnaround ~ its significant but not my only asset & equally it’s a team effort not one man’s crusade.
S.I
With no moat - what is going to keep your castle yours?
C.D
An army of like-minded team members who want to make a difference & see the opportunity.
S.I
Where do you see the business over the next five to 10 years?
C.D
Bigger, much better & yet eerily still focused on the same needs of our customers.
S.I
What made you get into this fast-developing world of logistics/trucking?
C.D
Just unlucky really…all the smart people were heading off to offices when I left University whereas I had a job driving a logging truck that paid more. Things just evolved from there.
S.I
The demands on your time must be huge. I am sure the life of a CEO at MOVE is terribly busy. How have the demands of MOVE impacted on your family and what skills as a dad have you used in your business life and where and how do you find the balance between home and work?
I left Mainfreight @ 40 so I could be a better Dad than the one I was rapidly becoming as a freight executive constantly on planes. The last 16 years I have happily flown under the radar in Australia.
In conjunction with the above - Is it simply good time management?
It’s about leading, following & getting out of the way … we have high energy people in the MOVe team who know it's better to beg for forgiveness (occasionally) than ask for permission all the time.
S.I
What do you see as the strongest and weakest quality of your leadership style?
C.D
Impatience, hiring people much smarter than me, self-depreciation & a willingness to be proven wrong…and yes, they are all strengths & weaknesses!
You are an extraordinarily strong leader brought about by your tenure at what I would say Mainfreight. How do you balance that strong personality when you make company decisions?
Who are some of your business mentors/heroes and why?
C.D
I draw most of my inspiration from non-business circles, like art & history and a bit of philosophy - Lee Kuan Yu (founder of Singapore) is the most complete & purposeful individual that I admire. Malcolm McClean (investor of the shipping container) for his problem-solving/innovation.
S.I
Who is your favourite New Zealand business leader/s and why?
C.D
Hard to go past Bruce Plested but Don Rowlands (former Mainfreight chair) was no slouch either.
S.I
In relation to the last 2 questions, are there any books or periodicals that you have read that you would recommend to Share Investor readers?
C.D
Read widely and voraciously - avoid the biographies particularly auto-bios as no-one wants to know the bad & dumb sh*t that has happened.
I subscribe to a lot of periodicals but religiously read The Financial Times every day, the Economist and Monocle ~ amazing what ideas, inspiration and fun there is out there beyond the arid business press.
Conclusion - My opinion
What can we take home and put in the bank from this little one on one?
Well, it’s hard to pin Chris down.
His answers sometimes can be a little “smart” and to the point – maybe I got him on a bad day.
Clearly, he has got a lot of work to do and he’s doing it and he has got his own money invested so the incentive is there to do the job and do it right.
He is forging his own way, not necessarily the “Mainfreight Way” but Chris’s model of what he has leant from Mainfreight and his other ventures over the years – I suspect learnt in Australia.
We will be watching!
From Move Website - Additional info by stuff.co.nz and MOVE Company Reports.
ACTING CEO OF MOVE
Born in the Bay of Plenty, Dunphy went to Papatoetoe High School in South Auckland and drove trucks to fund himself through his university studies in transport economics. Dunphy said he comes “from a long illustrious line of truck drivers” and has been in and around the industry all his life.
He met Mainfreight founder Bruce Plested as a boy climbing Mt Wellington to photograph Mainfreight trucks in a convoy.
Chris has a deep knowledge of the transport and logistics industry and was formerly an executive director of Mainfreight and general manager of Mainfreight’s international division. Chris joined Mainfreight in 1993 and helped take it public in 1996. After ten years of senior management roles in Mainfreight, spearheading their global growth-by-acquisition strategy, Chris resigned as executive director in 2003 to pursue private investments in several freight, shipping, and logistics businesses. In July 2021, Chris took on the role of Executive Director of MOVE Logistics Group.
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Was sort of disappointed by his cavalier attitude to some of my questions. Must have got him on a bad day.
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