In the notoriously tough road transport game, creating one empire is a pretty big deal. Two is very unique. Three? Well, that’s extremely rarefied company to which Ron Finemore belongs
As we tour Ron Finemore Transport’s (RFT) sprawling HQ at Wodonga on the New South Wales-Victoria border, the octogenarian (who turned 80 today) jokingly reminds long-time friend and collaborator Laurie Brothers of their deal that he’s only allowed to retire when Ron’s ready to take the hands off the wheel.
While you get a sense that his Chief Fleet and Maintenance Manager is ready to step out of the cab after working alongside the transport icon for more than 40 years, Finemore readily admits he has no intention of retiring just yet.
And to hear the RFT Executive Chairman tell his life story over several hours of interviews, you get to understand why.
Built from the ashes of Wodonga-based Lewington’s Transport, RFT now boasts what is arguably one of the most modern, efficient, safe and technologically advanced fleets in the country servicing a handful of A-grade clients, the largest being supermarket giant Woolworths.
I’ve worked since I was 11. I had to work three jobs just to go to secondary school. It wasn’t easy.
As he turns 80, it is clear Finemore still has both hands firmly on the wheel of what is arguably his most successful and satisfying corporate venture. And there’s been a few. Three in fact!
But it hasn’t always been that way.
Act 1
Finemore admits his early life was tough. “I’ve worked since I was 11. I had to work three jobs just to go to secondary school. It wasn’t easy. My parents couldn’t afford to send me to secondary school. I didn’t know anything else but to work.”
His entry into the transport industry happened by accident. During a break from studying civil engineering at university, he was helping in the family’s rural supplies business just outside Wagga when he dropped a piece of railway iron on his father’s foot, putting him in hospital for an extended period, unable to work.
Ron deferred his studies with the intention of picking them back up when his dad recovered. He never did and from initially carting fuel to farms, the family firm expanded into grain and fertilizer in the ‘60s, with Ron behind the wheel transporting grain to Melbourne and fertilizer back.
That first truck, a 1964 International AB180, sits proudly (and fully restored) in a shed at the Wodonga HQ – a reminder of times long past.
From there the business, initially trading as Finemores Haulage Contractors and later Finemores Livestock Transport, expanded into livestock and processed meat, securing a contract with meat processor RJ Gilbertson in Melbourne.
Rapid growth followed with the company carting huge numbers of sheep for both Gilberstons and Borthwicks out of western NSW and into Melbourne.
Ron Finemore with brother and RFT COO Alan who plays a key role in the business
“At one stage I was buying a couple of new (Mercedes-Benz) 1418’s a week and growing, carting stock out of NSW to Melbourne,” he says.
Diversification into general and refrigerated freight followed – as did depots around the country.
“In 1978 I thought I’d be real smart, I could expand the business and eliminate a heap of empty running by having operations in different parts of the country and loading trucks at a bigger percentage than 50 per cent or 60 per cent or 70 per cent,” he says.
“So, we bought Bruce Marks Transport at Wodonga, Hamilton and Mount Gambier, Clive Brothers Transport in Melbourne, and Gills Transport at Moree and Casino. And prior to that in 1974-75 we bought Bruce Dickenson Transport at Dubbo. And in ’79 we expanded into the Northern Territory and Western Australia.”
“Then we went broke in December 1979,” Finemore adds, citing too fast expansion, an absence of up-to-date financial information, and a lack of co-operation within the businesses for the demise.
“We did have a customer go into receivership, and we did have a blockade, but the real issue was my bad management,” he says.
Then we went broke in … 1979. We did have a customer go into receivership, we did have a blockade, but the real issue was my bad management.
With the aid of receiver Ernst & Young the business was shrunk from a couple of hundred trucks to 60-70 trucks with a focus on the more profitable contracts.
Act 2
During this period Finemore met someone who would become a life-long supporter and friend: John Bowen. An Amoco distributor, it was Bowen that introduced him to a customer that would become crucial to his success: Woolworths.
Following an initial meeting, Finemore’s started work for the retail giant 10 days later. It’s been a key customer pretty well ever since.
After 12-15 months in receivership, in 1980-81 Bowen came up with a plan to bring in four investors including himself to buy Finemore’s Transport via a scheme of arrangement. Ron Finemore emerged with a 20 per cent of the share of the company and management control.
Finemore’s started to grow quite substantially again. But it was the chance purchase of a relatively small car carrying business in Wagga called McCulloughs that would go on to transform the company into a major national carrier.
An initial contract with General Motors in the Riverina quickly expanded to cover all regional NSW.
RFT’s preference for European truck brands is heavily predicated on safety performance
During this period, though, Finemore hit another bump in the road.
The four investors who had backed the scheme of arrangement – Bowen, Max Luff from Border Express, John McPhee, and Peter Robson – weren’t happy with the need to give personal guarantees to finance equipment purchases for the growth that was once again occurring and decided to sell the business to the publicly listed Woodger Corporation, which had interests in real estate, property development, service stations, transport and even the Canberra Raiders!
Eventually, Finemore and Bowen led a buy-out of Jim Woodger’s 48.5 per cent shareholding and the board appointed Finemore as MD of the public company, which ended up becoming Finemore Holdings. Act two was officially under way.
After selling off non-core assets, including the Raiders, growth resumed with a predominant focus on transport – especially cars.
In 1985 the company bought Fleetway Holdings, a public company owned by Swire, which had the GM contract in Victoria, Sydney and Queensland.
Twelve months later it picked up Friendly Transport, which held the GM contract in South Australia as well as into Melbourne, Sydney and Brisbane.
Finemore Holdings progressively snapped up all the GM business Australia-wide – and off the back of this position eventually added all of Ford’s business nationally.
At that point in time we were the largest in auto logistics in Australia by a long way and through that period in the ‘90s we’d started a company called Prixcar in conjunction with K-Line and P&O.
“At that point in time we were the largest in auto logistics in Australia by a long way and through that period in the ‘90s we’d started a company called Prixcar in conjunction with K-Line and P&O,” he says.
With the takeover of Fleetway Holdings, another contract added was cartage of logs into Australian Newsprint Mills’ (ANM) Albury plant.
“We transformed that quite substantially from singles, to B-doubles, to operating 24 hours a day, so we dramatically reduced the trucks, we dramatically reduced the movements, and put the first B-doubles into the log carting transport industry,” he says.
“And in 1993 as a result of the work we had done to substantially improve productivity of log cartage into the mill, we had the opportunity to look at the finished product ex-the various Australian Newsprint Mills’ paper mills.
“To do this we’d also started a joint venture called Smart Logistics that did all the work for Australian Newsprint Mills in Australia and New Zealand with Leigh Winser of K&S and Max Luff from Border Express.”
Fuel also became a core part of the Finemore Holdings business. After taking over Ampol’s distribution in Sydney in 1985-86, the company added Woolworths petrol business and, in the mid ‘90s, took on the Exxon Mobil distribution in Thailand.
However, a lack of control again bought Finemore unstuck. With just 6-7 per cent of the public company’s stock, the business was sold to Toll at a premium to its trading price. Finemore was a reluctant seller.
At 80, Finemore very clearly still has both hands firmly on the wheel of RFT
“When the sale to Toll took place it was a pretty sad day as far as I was concerned,” he says. “But at that point in time I had no intention of retiring. I was 57.”
Act 3
While doing some consulting work for friends in Sydney – including Woodger Corporation shareholder John Leaver – a new opportunity emerged. Wodonga-based carrier Lewington’s came up for sale. At the time, Lewington’s had a fleet of around 140 trucks focused on livestock, tankers, bulk and general freight.
Finemore says the business was a “disaster”, losing $4.5 million the first year, $3 million the second year, before getting “square” the third year.
With the help of Laurie Brothers, his brother Alan (now RFT Chief Operating Officer), and several other former colleagues, they turned the business “from a disaster to a pretty good business today”.
From the outset, the decision was made to focus on “food and fuel” for two simple reasons: one, they’re the “necessities of life”; and two, demand is year-round.
After paring the fleet back to around 70 trucks, RFT struck a deal to swap the livestock business with some trucks Joe Sepos at Sepos Transport had working for Woolworths’ Primary Connect.
RFT’s big break came when it won a National Distribution Centre (NDC) contract with Woolworths carting out of Melbourne to Sydney and Sydney to Melbourne. They did this with Wagga based drivers doing a shift into Melbourne and Sydney swapping drivers at Wagga.
When the sale to Toll took place it was a pretty sad day as far as I was concerned. But at that point in time I had no intention of retiring. I was 57.
The 2005 acquisition of Smiths Transport in Orange added a second Woolworths distribution contract covering its central west NSW stores; as well as another big customer, Dick Honan’s Manildra Group. Additional contracts with Woolworths out of Barnawartha and the Riverina followed.
In the sweetest of revenge, recently RFT won the tender for the Woolworths business out of Barnawartha into Victoria held by Toll. The addition of the new Woolworths contract will push the RFT fleet to around 315 from its current 298.
While Woolworths is its principal customer, it also counts Manildra, poultry producer Baiada, Endeavour Group, Nestle, Pace Farms, Simplot, Aldi, EG Petroleum (which owns the former Woolworths fuels business), Oils Plus, Ampol and Wessell’s Petroleum as key customers.
“We don’t have a heap of customers. We’ve been very selective in who we deal with and what we do,” Finemore says.
Key drivers
Finemore loves sporting analogies. “We’re not here to count the number of trucks, the aim of the exercise is when you look at the scoreboard, are you winning?” he says.
The key scores on the board, according to Finemore, are safety, service reliability, cost effectiveness, and people.
“And all of that formula should give you a financial result which is the key driver for everybody,” he says.
Safety
Safety has been a key focus for Finemore, beginning in 1976 when he lost three drivers in a short period of time. While none were his fault personally, you get a clear sense they had a lasting impact on him.
“In 1976 I ordered 50 new cab-over Kenworths in one order and at that point in time I started specifying tachographs and I used to read the cards of the drivers every weekend and use that to tell them to slow down or whatever,” he says.
Addition of the new Woolworths contract will push the RFT fleet to around 315 prime movers
“Since that point in time I’ve had monitoring on all our vehicles and progressed through various stages of monitoring.”
In 2013 RFT became the first business in Australian to adopt the Bluetree (now Orbcomm) telematics solution which allowed it to track vehicles as well as provide data that enabled it to score how well drivers – as well as vehicles – were performing against set parameters, including speed, idling, harsh braking, and over revving.
Around the same time, RFT came across Seeing Machines’ driver monitoring technology for the first time.
“They were in the mining industry but I looked around the world what was available and everything else told you after the event, whereas Seeing Machines told you in front. But I said the drivers will never accept it unless you put a forward-facing camera as well as a driver-facing camera and they made a decision to go-ahead and do that and since then we’ve had them in every vehicle we operate,” he says.
RFT’s Driver Safety System comprises a driver-facing camera and a forward-facing camera to monitor a driver’s eyes and head position to identify potential fatigue and distraction events.
This real-time device alerts the driver by a seat vibration and alarm in the case of a fatigue event and also sends an alert to RFT’s operations team.
Since that point in time I’ve had monitoring on all our vehicles and progressed through various stages of monitoring.
“It’s the greatest thing as far as I’m concerned that I’ve ever seen in technology for safety improvement,” Finemore says.
RFT’s preference for European truck brands is also heavily predicated on safety performance. The company’s fleet has been standardised on a mix of Euro 6 Mercedes-Benz and Volvos boasting safety features such as active brake assist, advanced lane departure assist, and active lane keeping assist.
What’s more, the company runs an extremely young fleet, currently sitting at an average of 1.88 years for its 298 trucks and 7.54 years for its 600-odd trailers.
Service reliability
A reliable fleet is also critical to another of RFT’s key performance indicators: service reliability.
“Our business is service reliability dependant. Woolworths has got to be 99.6 per cent on time in the window. And equipment reliability is the key factor in that,” he says.
And technology plays a key role in ensuring service reliability. RFT has invested heavily in IT systems that enable it to monitor KPI’s from on-time delivery down to profitability by truck.
A reliable fleet is also critical to another of RFT’s key performance indicators: service reliability
“We try to provide the information to all our management and all our operations and all our drivers so they know whether they’re winning or losing.
“The key scores are number one, safety. Number two is service reliability. We get that result every day for every contract.
“And then number three, it’s our costs, our fuel economy, how the drivers are driving the truck, how many fatigue alerts we get, how many distractions.
“And then we get our financial performance every Wednesday night, by five o’clock, for the previous week by vehicle. So, we know by vehicle the profitability of every vehicle within less than three days after the end of the week.”
Cost effectiveness
In line with his love of sporting analogies, Finemore is also a believer in the “one per centers”, Laurie Brothers says. The reason is simple: in an industry notorious for its slim margins, every saving counts.
As well as running a modern, fuel-efficient fleet, RFT has focused on unlocking productivity gains within its trailer fleet.
You’ve got to get one per cent here, one per cent there. If you’re not trying to get those one per cents you’re not going to make money.
Working closely with leading trailer manufacturers (predominantly Maxitrans and Vawdrey), the company has become one of the largest uses of PBS trailers in the country.
RFT runs around 25 30-metre B-double trucks in fleet, including quad-quad 30-metre super B combinations in its contracted shuttle operations and five 30-metre A-double road train tanker.
It is also in the process of commissioning 17 new PBS fridge vans – plus eight ambient versions – with a capacity for 26 pallets double stacked.
Tyres are another big focus. RFT is arguably the biggest user of super single tyres in the country. Brothers says the lower centre of gravity and improved stability delivers fuel savings – plus allows it to get higher mass limits weights at concessional limits due to lighter combinations.
For a business that goes through around 650,000 litres of diesel per week or 33 million litres a year, every saving counts.
Additionally, RFT runs its tyres on nitrogen rather than compressed air, which tend to run cooler, particularly in the summer time, and hence extend longevity.
Attracting and retaining staff is arguably RFT’s greatest challenge, Finemore admits
What’s more, the company’s a big proponent of retreads. Predominantly running tier-one brands Michelin and Bridgestone, RFT gets three lives out of every case. When you’re changing 10,000 tyres a year, those small savings add up.
The regional carrier is also in the process of installing 320 solar panels across the Wodonga HQ’s roofs – which will deliver about 97kv or some 25 per cent of site power usage.
People
Attracting and retaining staff is arguably RFT’s greatest challenge – and one Finemore admits is the “most difficult I’ve seen it”.
“Our business is a very difficult business in that we work to very demanding times with our key customer.
“It’s seven days a week and our biggest peak days are Friday, Friday night, Saturday, Saturday night. Less and less people want to work those times,” he says.
We continue to work at it, but the thing is no one wants their kids to grow up to be truck drivers.
RFT works hard at retaining and attracting people, paying above-award allowances and penalty loadings, extra payments for delays, breakdowns, and even tyre changes, safe driving bonuses, and even sign-on bonuses for new staff.
“We continue to work at it, but the thing is no one wants their kids to grow up to be truck drivers,” he adds.
The future
While Finemore has no plans to retire, he agrees “succession is a critical part of any business”.
“There will be a transition. My son Shane will become chairman next year. He’s just moved back to Australia from New York, having been in New York for over 20 years (working in investment banking). I’ll continue to work but the aim of the exercise will be to try and transfer as much of the knowledge I have to him,” he says.
“Then the current CEO is going to retire in a couple of years and we’re looking at various options for that replacement.
RFT is very much a family business with son Scott (top) and brother Alan (bottom right) in key roles
“My oldest son Scott works in this business (as GM General Freight and Bulk Haulage Divisions). My daughter Renae works in the business. My daughter Natasha is my EA. My nephew is our key guy on costing.
“Alan my brother is the COO and has a critical role in the business overseeing all operating divisions and who I bounce most ideas off.
“Succession is a critical part of any business and we’ll continue to operate and grow as the opportunities come. The current situation is that we don’t see any better investment than the business we’re in, but things change, times change, opportunities change, and I won’t be the person to determine that forever.” Act 4?
