Linfox on a steady ascent

Lindsay Fox has had his eye on the burgeoning Westgate Logistics business for a decade. But his patience was finally rewarded when Westgate CEO Sam Tarascio agreed to sell the company to Linfox, retaining the Victoria Dock and Westgate wharf cartage businesses.

In March 2006, Lindsay Fox enunciated his desire to see Linfox grow substantially through acquisition to reach a goal of $ 4—6 billion revenue by 2010. Since then, the company has been steadily executing this strategy with the acquisition of FCL in October 2006, New Zealand company Provincial in May and now Westgate Logistics.

Linfox CEO Michael Byrne says Westgate is a strong cultural fit with Linfox, being a family owned private business. “Culturally and behaviourally the (Westgate) business is very similar to ours,” he tells Logistics Magazine. “Like our other recent acquisitions, FCL and Provincial, it’s a family business which shares our ethics and sense of obligation to customers.”

“Linfox has spent the last four years focusing more than ever on customer needs,” Byrne says. “So after the culture, the second most attractive thing about the Westgate business was the sheer quality of its customers, such as Coles, Woolworths, Franklins, IGA and Metcash.”

“Linfox is very interested in companies that have quality long term sustainable customer relationships. Looking after the customers is about the best way we can make money and create jobs. We see ourselves as a service company rather than a trucking company. If you’re looking after the customers you’re going to go okay.”

According to Byrne, Linfox is also looking to develop its interest in high SKU, high volume retail warehousing; a particular strength of Westgate Logistics.

“The Tarascio family is renowned for building an outstanding property portfolio,” Byrne adds. “That helped drive this transaction, and I think you’ll find the two families working together to continue improving the standard of specialised warehousing and industrial property in this sector, leading to better industrial property solutions for the market.”

Michael Byrne has given the company a tight deadline of 100 days for the integration of Westgate Logistics.

“We need to compact our integration process so we don’t interfere with our customers’ summer season,” Byrne explains. “Close to two thirds of the Westgate business is retail, to be assimilated in to the Linfox Retail division.”

“Retailers don’t like anything to affect their sales between October and Christmas. Our customers want us to be really focused on their businesses, getting the stock on the shelf to provide fantastic availability for Christmas.”

Over the next three months, the Westgate business will be broken up to fit three of Linfox’s four verticals: FMCG, Retail and Industrial. “Westgate Logistics doesn’t have a Line haul division, so the majority of the business will go in to our Retail division. Another big chunk will go into FMCG and the remainder in to our Industrial division,” says Byrne.

In addition, Westgate Logistics will be re-branded Linfox to capitalise on a name that Michael Byrne believes is synonymous with operational and execution excellence. “The company brand is over 50 years old,” he says. “It’s associated with Lindsay Fox and the Fox family but Linfox is the best operational execution company in the region.”

In relation to Westgate’s people, Michael Byrne asserts that in his nine years at Linfox, he can’t recall the company ever making any blue collar workers redundant.

“I can’t imagine any truck driver, warehouse people or junior management who wouldn’t have a job here,” he says. “Linfox is hungry for new people. In 2003, the company had 5000 people working for it and since then, we’ve employed 8000 people. We’ve recruited 8 people every day of the year for the last 18 months across 11 countries of operation.”

“In terms of senior people, we have to see if they can fit our structure,” Byrne says. “Linfox has a very lean structure; there are only five layers of management between a driver and me.”

“By its nature, our industry doesn’t have a clear ladder overhead, so we have to really think about senior people and where best they can be best be deployed to allow fulfilling jobs without burdening the business with overhead cost.”

Moving forward, Michael Byrne says the Fox and Tarascio families intend to investigate property construction, development and ownership. “There’s an understanding that Linfox will utilise opportunities to subcontract Westgate’s Victoria Dock and wharf cartage businesses,” he says. “We also hope to explore the use of inland ports and stevedoring.”

“The two families have a lot in common,” Byrne enthuses. “We’re really pleased with this result. Linfox intends to treasure the Westgate business and look after its customers and we very much look forward to a continued relationship with the Tarascio family.”

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