Exel plc

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Exel plc

Ocean House, The Ring
Bracknell, Berkshire RG12 IAN
United Kingdom
Telephone: (1344) 302000
Fax: (1344) 710031
Web site: http://www.exel.com

Public Company
Incorporated: 1865 as the Ocean Steam Ship Company; 1981 as National Freight Consortium PLC
Employees: 61,700
Sales: £4.5 billion ($6.5 billion) (2001)
Stock Exchanges: London
Ticker Symbol: EXL
NAIC: 541614 Process, Physical Distribution, and Logistics Consulting Services; 488510 Freight Transportation Arrangement

Exel plc was formed from the 2000 merger of Ocean Group plc and NFC plc. Both Ocean and NFC had started out as simple cargo service providers and grew into major logistics and supply chain management concerns by the late 1990s. Their union formed a global logistics powerhouse with operations in over 120 countries. Exel’s core services include e-commerce fulfillment, home delivery, manufacturing and retailer inbound services, regional and global freight management, supply chain management and design, transportation, and warehousing and distribution services. The firm caters to the automotive, chemical, consumer, healthcare, retail, and technology industries. Subsidiary Cory Environmental also provides environmental services throughout the United Kingdom.

Ocean Group History

The history of Ocean Group begins in 1865, when two brothers, Alfred and Philip Holt of Liverpool, set up the Ocean Steam Ship Company. Its purpose was to provide a regular steamship cargo service from England to China, at first via the Cape of Good Hope. At that time the steamship was not considered an economical long distance cargo carrier, but the Holt brothers planned to use a new type of steamer that they were convinced could compete effectively with sail on this route.

This was an ambitious project requiring a large investment. It involved building three ships, each of 2,280 tons, iron-hulled, and powered by a new type of compound steam engine designed by Alfred Holt, who was an engineer. He and his brother were the sons of a wealthy Liverpool cotton broker, and they had already proven the potential of this type of ship in West Indian trade. By selling the five ships they had owned in that trade they were able to put up almost half the capital needed for the new enterprise. The rest of the money came from other members of the family and their business friends in Liverpool. The company was founded before the days of limited liability, so all the shareholders were taking a considerable risk. The two Holt brothers, then aged 37 and 36, took on the management of the ships.

Their gamble paid off. The ships performed well and the cargoes followed: in the early days the chief goods transported were cotton textiles, which went from England to China, and tea, which went from China back to England. The Holts’ ships became well known for their classical names (Agamemnon, Ajax, and Achilles were the first three) and their trademark blue funnels. Although the company was officially called Ocean it was much more often referred to as “Holts” or the “Blue Funnel Line.”

Selecting Key Agents

The commercial success of the line was due partly to the Holts’ high standing in the Liverpool business world and partly to their shrewd choice of agents. In some cases their agents were also shareholders in the company and therefore had a double incentive to bring business to the line. A prime example was the firm of John Swire & Sons. The Swire brothers, who built up this eastern trading business, were also from Liverpool and were contemporaries and friends of the Holt brothers. They invested in each other’s businesses, and when the Swires set up shop in Shanghai (as Butterfield & Swire) it was partly to act as agents for the Holts. This partnership was so successful that Swires later became agents for Holts in other Far Eastern ports as well as in London.

Another fruitful agency appointment, and one which owed nothing to the Liverpool connection, was that of Mansfields in Singapore. The enterprise of this firm in developing trade with neighboring territories made Singapore a rich source of business for the line.

Only three years after the Holts started their China service, Far Eastern trade was transformed by the opening of the Suez Canal. By dramatically shortening the route to China, this greatly stimulated business. On the downside, however, it also attracted new competitors. In the next 20 years, the Blue Funnel Line grew to 30 ships, all financed out of profits. The main route from Liverpool to Shanghai was extended to Nagasaki as trade with Japan grew, and the volume of traffic all along the route was increased by feeder services. The Swires operated services along the Yangtze River and around the coast of China, while the Holts and Mansfields started feeder services centering on Singapore. Another profitable sideline was the carrying of passengers, particularly Chinese emigrants and Moslem pilgrims en route to and from Mecca in Saudi Arabia.

Fleet Expansion, Takeovers, and Joint Enterprises: 1890s-Early 1900s

Despite all this expansion, Ocean’s profits began to decline in the 1880s. Competition from other steamship owners was driving freight rates down and the Blue Funnel ships were being overtaken in carrying capacity and speed by more modern ships. It became necessary to replace virtually the whole fleet if the company was to survive.

A decisive move was made in 1892, when four new ships were ordered and ten old ones transferred to feeder services. In the course of the 1890s, 23 new ships were added to the fleet and its total tonnage almost tripled. Ocean had to dig deep into its reserves and borrow from its bankers to make this investment, but it laid the foundations for another surge of growth in the next two decades.

Takeovers and joint enterprises played an important role in this second phase of growth. In 1902, Ocean became a limited company and bought one of its main competitors on the Liverpool-Far East route, the China Mutual Steam Navigation Company Ltd. This added another 13 modern ships to the Blue Funnel fleet. A few years earlier, Ocean had become the majority shareholder in an Amsterdam-based company Neder-landsche Stoomvart Maatschappij Oceaan (NSMO), which came to control the bulk of the tobacco trade from the Dutch East Indies to Europe. Other purchases and joint ventures enabled Ocean to extend its routes to Australia and, after the opening of the Panama Canal, to New York.

However, it was internally generated growth that made these investments possible. World trade was growing fast, and the Holts and their agents were very active in developing new types of business. Tin and rubber from the Malay states, tobacco from the East Indies, and refrigerated fruit and meat from Australia all became important inward cargoes, while machinery and manufactured goods of all kinds filled the outward-bound ships.

Two World Wars and the Great Depression

By 1913, the Blue Funnel fleet numbered 77 ships, and its total tonnage had nearly tripled again from its 1901 level. The years immediately before World War I brought record profits to Ocean, and the war pushed them still higher. Some of the company’s ships were commandeered by the government at good rates, and freight rates also rose. The Far East trade was not affected much by the war, and Ocean was fortunate to lose relatively few of its ships before the fighting ended in 1918.

In retrospect, the end of the war and the short postwar boom proved to be the high watermark of the company’s expansion. From then on, Ocean, along with other British shipowners, had to struggle to maintain business. In most of the interwar years, world trade was below its 1913 level and later suffered a severe decline during the first four years of the Great Depression, from 1929 to 1933. At the same time, Britain’s share of the traffic was being eroded as other countries built up their merchant fleets. Existing shipping lines were able to protect themselves to some extent by the conference system, a form of cartel, but were under constant pressure from nonconference companies. In these circumstances, Ocean did well to keep the bulk of its business and to continue paying dividends throughout the period.

The depression brought about the collapse of one British shipping combine, the Royal Mail Group, and Ocean was in a strong enough position to be able to acquire parts of that business at bargain prices. It bought the Glen Line in 1935, gaining ten ships serving the Far East from London, as opposed to Liverpool. The year after, it acquired a large holding in the Elder Dempster Line, which was strong in the West African trade.

Then came World War II, which had a devastating effect on Ocean’s business. The Japanese occupation of China and much of Southeast Asia completely destroyed the Europe-Far East trade from 1941 to 1945. Half the Blue Funnel fleet was sunk by enemy action, and its Liverpool headquarters was destroyed by bombs.

When the war ended, the company—still headed by a member of the Holt family—courageously set about rebuilding the business. Its urgent need for more ships was met by buying some secondhand and by having others built abroad. Rebuilding the company’s trading connections, however, was not so easy. Trade with China never recovered after the civil war and Communist takeover, but trade with Australia was buoyant and that with other territories was gradually restored.

Company Perspectives:

Our global strategy revolves around expanding our geographical and service penetration, strengthening positions in key market sectors, and providing consistent global capabilities and management.

By the late 1950s, the Blue Funnel fleet again numbered almost 70 ships still pursuing traditional liner trade. Ocean was not at this stage interested in oil tankers or bulk carriers, and the day of the container had not yet arrived. As a company, Ocean was perhaps a shade too conservative at this time. It was still a family business, owned and managed mainly by descendants of the founders. All the directors sat in one room at the Liverpool head office, just as their predecessors had for almost a hundred years. Their standards in ship safety and efficiency were high, and the company was universally respected. In 1965, Investors Chronicle, a financial paper, characterized Ocean as “one of the largest British shipping companies, with a sound, steady profits record.”

By then, however, it was clear that things had to change. The success of containerization in the United States was forcing the company to contemplate radical business strategies, and to facilitate these it was decided that its shares should be traded on the stock exchange. (It was already a public company, but an unquoted one.) This change went into effect in March 1965.

Investing in Containerization

Later the same year, two other far-reaching decisions were made. The first was to start investing in containerization. This meant merging Ocean’s main business into a larger grouping to finance the massive investment required. The other decision, linked to the first, was to start diversifying into other branches of the shipping business to provide new opportunities for Ocean’s own organization.

The company was spurred into action by reports that the Australian government was keen to containerize and was negotiating with SeaLand, an American company. Neither Ocean nor its competitors in the Europe-Australia trade could risk losing this business, so four of the British companies, including Peninsular & Oriental Steam Navigation Company (P&O) and Ocean, jointly set up Overseas Containers Ltd. (OCL) to provide a container service on this route.

OCL began operations in 1969. Within a few years its Australian service was showing a profit, and it had joined a still larger international consortium to containerize the Europe-Far East route. At this point in the early 1970s, Ocean’s stake in OCL grew to 49 percent, and its Blue Funnel fleet became largely superfluous.

In anticipation of this, Ocean had been investing in other shipping businesses since 1965. That year it took over a company called Liner Holdings. This included the Elder Dempster Line, in which Ocean had held shares since 1936, and other subsidiaries. Over the next few years, Ocean also acquired interests in tankers, bulk carriers, and cargo handling services, laying the foundations of much of the company’s business through the 1980s. For example, MSAS Cargo International began in 1968 as McGregor Swire Air Services, a joint venture between Ocean and its longtime partner, Swire. Panocean Storage & Transport was set up a year later in cooperation with P&O.

Continued Acquisition and Expansion

Another important move—because it put Ocean into land transport for the first time—was the purchase of William Cory & Son Ltd. in 1972. Cory was a long-established company that had first made its name carrying coal by sea from northeast England to London. From this it moved into the transport of fuel oil by sea and land and later again into food distribution. Cory also had offshoots in towage and waste disposal. The acquisition of this business increased Ocean’s assets by over 40 percent.

It cannot be said that all Ocean’s diversifications in the 1960s and 1970s were successful. There were a few expensive failures, and there were bad times when the company was itself threatened with takeover. Nevertheless, enough of the new ventures succeeded to provide a strong basis for future growth. The company’s remaining shipowning interests, apart from OCL and Elder Dempster, were sold off in the late 1970s and early 1980s, and in 1986 a decision was made to withdraw from OCL. Ocean’s then 33 percent holding was sold to P&O, and, in a partial exchange, Ocean acquired P&O’s holding in Panocean. Elder Dempster was sold in 1989.

After the sale of the OCL holding, Ocean was in possession of a large amount of cash in 1986, and this attracted an unwelcome takeover bid from New Zealand entrepreneur Ron Brierley. The company successfully resisted this and focused on investing all its resources in building up its core businesses: sea freight, air freight, logistics, marine services, and waste management. In particular, it invested in overseas companies, with the result that its business was very widely spread around the world by the late 1980s.

The company’s name changed twice in the latter half of the twentieth century to reflect its changing activities. In 1973, after the Cory takeover, it became Ocean Transport & Trading Ltd., and in 1990 it adopted the Ocean Group name. The last director with a family connection retired in 1976, and the company’s head office moved from Liverpool to London in 1980, and then to Berkshire in 1992. Nicholas Barber, who joined Ocean in 1964, took over as chief executive in 1987.

By the early 1990s, Ocean Group’s main business was international freight management. Its largest subsidiary, MSAS Cargo International, was one of the world’s leading freight forwarders and was among the top five companies in air freight forwarding, with over 220 offices in 30 countries.

Key Dates:

1865:: Alfred and Philip Holt set up the Ocean Steam Ship Company.
1945:: World War II has a devastating effect on Ocean’s business.
1965:: Ocean lists on the London Stock Exchange; the firm begins investing in containerization.
1968:: McGregor Swire Air Services (MSAS) is formed as a joint venture between Ocean and Swire; the government forms National Freight Corporation (NFC).
1969:: Four British companies establish Overseas Containers Ltd. (OCL).
1982:: The British government sells NFC to company employees.
1986:: Ocean sells its interest in OCL.
1989:: NFC creates Exel Logistics.
1990:: Ocean changes its name to Ocean Group plc.
1998:: Ocean unites its logistics companies under the MSAS name.
2000:: Ocean merges with NFC plc to form Exel plc.

Ocean’s other businesses also centered on transport. Its distribution services sector included McGregor Cory, which undertook contract distribution and warehousing in half a dozen European countries, and Panocean Storage & Transport, which specialized in moving and storing bulk liquids in Europe and the United States. Its marine services sector included O.I.L. Ltd., which provided support services for the offshore oil industry worldwide and was the second largest in the world, while Cory Towage provided towage services in certain parts of the world.

By this time, the company had also built up a stake in the environmental services industry. In the United Kingdom, it disposed of a fifth of London’s refuse, among other contracts, and in the United States it operated a chain of 20 environmental testing laboratories.

Changing Direction

Despite its restructuring efforts, Ocean’s lackluster performance of the early 1990s left it repositioning once again. Prompted by investor disinterest in the company, Ocean management began looking for a new leader to revamp the company. “We needed someone to reshape the headquarters and the operating units with a modern set of solutions, not the concepts of the 1950s and 1960s, which were still evident,” claimed former chairman Peter Marshall in a 1998 Management Today article. Management decided on business executive John Allan, who was named CEO in 1994.

Under Allan’s leadership, Ocean began to shift its focus to global logistics. The strategy appeared to pay off. In 1998, revenues increased by nearly 20 percent over the previous year while operating profit grew by 32 percent. That year, the company created MSAS Global Logistics, uniting all of its logistics businesses, including MSAS Cargo International, under the new name.

The company was also involved in strategic ventures and key acquisitions during this time period. In 1996, the company established a joint venture in China and subsidiaries in Finland and Korea. The following year, Intexo and Marken were acquired, and ventures were set up in Brazil, India, and Chile. Acquisitions in 1998 included Oslo Havnelager, Mercury, Laker Cargo, Skyking, A.W. Fenton, and Dutch Air. Additional purchases followed in 1999, including Mark VII, Malenstein, Parkhill Reclamation, and Aerocar Spedition AB. Then, in 2000, Ocean set its sights on NFC, which had recently restructured into a supply chain management firm.

NFC History

A very distinctive feature of NFC plc was that it was largely owned by its employees, their families, and pensioners. During the early 1990s, employees held around 18 percent of the equity and their shares carried two votes each. New employees were helped to buy shares, and management kept all employees informed about the company’s progress. It also invited their views on major issues. Employee ownership, the company said, was “the essence of NFC’s culture.”

The reason for this lay in the circumstances of the company’s birth. The letters “NFC” originally stood for National Freight Corporation, which was a collection of road transport businesses owned by the British government. The Thatcher administration, when it took power in 1979, was determined to return it to the private sector, and in 1982 agreed to a unique employee buy out. At that point, employees, their families, and pensioners owned 82.5 percent of the equity. The company became extremely successful in its new form, and it was only because of its rapid expansion that the employees’ percentage dropped.

It is debatable at what point a history of this company should begin. Legally, it began life in November 1981, when the buy out consortium was formed. However, the assets it acquired two months later had been brought together as the National Freight Corporation in 1968 and had been owned by the state under other names since about 1948. Furthermore, many of the businesses that were taken over at that time had existed for generations in private ownership.

Pickford’s Wagon, Barge, and Rail Service: 1700s–1800s

It is obviously impractical to trace all these companies back to their beginnings, but one exception must be made. This is Pickfords, a well-known name in England that was used by NFC until 1999. It was almost certainly the oldest road haulage business in the United Kingdom and was the largest at the time the industry was nationalized.

It is said that the firm was founded in the seventeenth century, but the earliest documentary evidence of its existence is an advertisement from 1756 in the name of “James Pickford, the London and Manchester Waggoner.” He offered a regular wagon service for goods between Manchester and London. To cope with the rough roads of those days, his wagons had wheels with rims nine inches wide, and they were pulled by teams of as many as eight horses. They covered the 200 miles or so in eight or nine days, which at the time must have been good going for a heavy load.

James Pickford and his sons developed a flourishing business on this important route and gradually extended their service to other towns in the midlands. By the end of the eighteenth century, canals formed an alternative means of transportation, and Pickfords were quick to use them too. By 1835, the firm was said to be “the greatest carrier on the canals,” with over 100 barges and 800 horses in use.

Then came the railways. Pickfords tried to persuade the railway companies to let them run their own goods wagons on the railways. Failing in this, they became agents to the London and North Western Railway, which ran the best service between London and Manchester. In this capacity, Pickfords carried goods by horse and cart to the stations and, at the end of the rail journey, on to their ultimate destinations. As railway traffic grew, this became a very profitable business. Pickfords made similar arrangements with other railway companies, operated their own road services where there were no railways and all over London, and by the end of the nineteenth century had a countrywide business and reputation.

Changes in Ownership and Nationalization

The Pickford family lost control of the business around 1850, but another family, the Baxendales, operated it under the old name for another two generations. It then suffered from bad luck in the early 1900s and was bought first by one company, then another, until in 1933 it was bought jointly by the four railway companies that at that time owned Britain’s entire rail network. Under their ownership, Pickfords again flourished and grew, used by the railway companies as a means of recouping some of the business they lost to road transport services with the coming of gasoline-powered trucks.

During the 1920s and 1930s, Pickfords branched out into household moving and, with its national network of offices and depots, became the leading firm in that business. By the end of World War II, Pickfords offered a unique range of road transport services, from heavy loads and bulk liquids to furniture-moving and parcel delivery service.

At this point, Britain’s postwar Labor government decided to nationalize the road transport industry, along with the railways, the docks, and other major utilities and industries. The rationale was that with railways and road haulers under common ownership, wasteful competition would be eliminated and a more efficient transport system would emerge.

The fragmented road transport business was a formidable challenge to government bureaucrats. Ultimately, the state took over only those companies whose major business was the carriage of goods for 40 miles and upwards, but even so it took the government agency five years—from 1948 until 1952—to buy the 3,744 firms in this category. Most of them lost their old identities and became part of a new corporation, British Road Services (BRS), but Pickfords and a few other large operators were allowed to keep their old names within BRS.

Even before this process was complete, the Conservatives were back in power, intent on reversing nationalization. In the early 1950s, much of the BRS fleet was sold back to private operators. However, BRS was retained, still in the public sector, to provide a single nationally coordinated road haulage service on trunk routes.

Over the years, and through various reorganizations, BRS expanded to take in a whole range of road transport services. Certain specialized services, including household moving, were carried on under the name of Pickfords, and a parcel delivery service operated under the name Roadline. At the same time, British Railways developed its own rail and road parcel delivery service. The advent of the container in the 1960s increased the railways’ involvement in road transport still further.

The Government Forms NFC

Because of these overlaps in the public sector, the government decided in 1968 to bring BRS/Pickfords’ and British Railways’ parcel delivery business (renamed National Carriers) and container operation (Freightliner) under the control of one organization, the National Freight Corporation (NFC). In the same piece of legislation, the licensing system, which had restricted the number of new entrants into the road haulage business, was relaxed.

These measures committed NFC to running several services in competition with each other, while exposing it to still more competition from the private sector. The NFC’s services had to be comprehensive and therefore had higher overhead costs than the small private operators, and were inevitably undercut in price.

Despite these inherent weaknesses, NFC got off to a good start. Its workforce, which numbered 66,000 at its inception, was gradually reduced, and profitability improved so that the initial government subsidy granted to NFC became unnecessary. Encouraged by this, the corporation decided to expand into continental Europe and bought businesses in France, Germany, and elsewhere.

The oil crisis of 1974 hit all NFC markets simultaneously, and its modest profits gave way to serious losses. In 1976, NFC’s top management underwent change—curbs on spending were set and the Freightliner business was returned to British Railways.

NFC’s new chief executive was Peter Thompson, who later led the buy out. His career had been mainly in the private sector of the transport business until he became managing director of BRS in 1972. Once at the head of NFC, he began to apply private sector criteria to all its operations. Its European ventures, which had proved to be liabilities, were sold and other loss-makers severely pruned. The workforce was reduced still further, to 34,000 by 1979. The organization was decentralized, many senior managers were retired, and younger employees who had proved their worth were promoted. Not least important, the government was persuaded to write off much of the corporation’s accumulated debt. By 1979, NFC was beginning to look more like a shareholder-owned company.

In that year, the Thatcher government came into office and NFC was at the top of its list of state-owned businesses to be privatized. In 1980, a merchant bank was appointed by the government to advise on how this should be done. It soon found that there were snags. NFC’s pension arrangements had not been properly funded, business was again suffering from a recession, and NFC had just lost a lucrative contract with British Railways as a result of pressure on the latter to cut its losses. The bank advised that NFC should not be brought to market for two or three years, and even then set a relatively low value on it.

Thompson and his team believed that NFC was worth more, or soon would be under their management, and began to think about a buy out. Realizing that they could not raise sufficient capital themselves, even with loans, they decided to propose the idea to employees. The response was favorable, and this solution also appealed to the government because it would speed up the privatization process. After much negotiation, a deal emerged whereby a consortium of banks would lend the money to make good the pension deficit in return for 17.5 percent of the equity, while employees and pensioners of NFC and their families would put up the rest (about £7 million).

NFC Becomes Employee Owned

NFC became a public company, owned by its employees, in February 1982. Thompson remained chief executive, and the board had full authority to run the business. At the same time, employees were encouraged to contribute to a new definition of the company’s aims. The first of these was of course to increase profits for its existing shareholders. More unusually, it was also agreed that the company should allocate a portion of each year’s profits to making more employees shareholders and that it should aim to increase employment opportunities.

The company was therefore committed to expansion, as well as improving profits, almost from the start. To achieve this, the management set itself some very specific growth objectives and some equally specific cost reduction requirements. One obvious way of cutting costs was to make better use of the company’s properties. Because BRS, Pickfords, Roadline, National Carriers, and other subsidiaries had all developed their own branch networks, there were many towns where NFC had four or more depots. Once these subsidiaries saw that they had a common interest in cutting costs, it was not difficult to persuade them to share premises, and large savings were made in this way. The surplus properties were then sold or redeveloped, boosting profits.

More controversially, the management decided that its two parcel delivery services, Roadline and National Carriers, must either merge or be reduced by one. The two companies were merged as National Carriers Roadline and then relaunched under the name of Lynx Express Delivery.

International Expansion

The most important growth objectives the new company set itself was to expand overseas until at least a quarter of its profits were coming from abroad. This time, acquisitions would be more selective than in the 1970s. NFC resolved to concentrate first on building an international household moving service, to meet the needs of executives being moved around the world, and second on acquiring businesses in the growing field of contract distribution.

In the moving market, Pickfords provided a strong base for expansion. It first bought an Australian company, then set up branches in Hong Kong, New Zealand, and elsewhere. In 1988, it acquired the roughly 500 independent firms comprising Allied Van Lines, one of the leading moving companies in the United States. This link-up established the Allied Pickfords group in more countries than any other moving company. Another United States acquisition was that of Merchants Home Delivery Service of California, which specializes in deliveries to private homes from furniture and appliance retailers.

On the contract distribution side, NFC was again building from a position of strength in its home market. It undertook distribution for Marks & Spencer and other big retailers in the 1970s, and in the recession of 1981-83 found many more companies receptive to the idea of sub-contracting delivery and warehousing to a specialist in this area. NFC took over an increasing number of transport fleets and storage facilities, especially from food manufacturers and retailers. Later in the 1980s, newspaper groups became customers too.

In the United States, NFC was able to acquire two important businesses in the same field: Dauphin Distribution Services of Pennsylvania in 1986 and Distribution Centers Incorporated of Ohio three years later. These and other companies in North America and Europe were then grouped together by NFC to form the Exel Logistics division in 1989.

In the United Kingdom, NFC improved profitability chiefly by continuing to move away from general haulage and into more specialized services. BRS became the market leader in contract hire and developed truck rental, tank freight, and waste management subsidiaries. The travel side of Pickfords was also expanded, becoming a leading British travel agency.

NFC had seen some failures as well, notably an attempt to sell its computer software to a wider market, but they have been few. The company’s turnover had grown solidly since the early 1980s, and its pre-tax profit increased almost tenfold from £11.8 million in 1983 to £114.4 million in 1989. It began to decline slightly in the face of a long recession, but was still a very respectable £102 million in 1991. In keeping with its employment objective, the company’s workforce rose from 23,000 in 1982 to 33,000 in 1992.

Growth aside, the most important change in the company since 1982 was the wider spread of its ownership. To provide a more efficient market in its shares, NFC applied for a Stock Exchange quotation in February 1989. As such, institutions held a significant proportion of its shares, although control continued to rest with the company’s employees families, pensioners, and former employees. Peter Thompson was honored with a knighthood for his part in creating NFC and was succeeded as chief executive by James Watson in 1991.

By the early 1990s, NFC plc was the largest road transport, household moving, and contract distribution business in the United Kingdom. It was also a significant contender in these markets in North America, Europe, and Australia, with about a third of its total business overseas. Worldwide, NFC had over 20,000 vehicles on the road. The company had four divisions. The transportation division operated chiefly in the United Kingdom under the names of BRS and Lynx Express Delivery. The logistics division undertook distribution and warehousing for retailers and manufacturers, mainly under the name Exel, and was particularly strong in North America. The home services division carried out household moving under the names Pickfords and Allied Van Lines. NFC also had a property division.

Before its merger with Ocean, NFC made several key moves to broaden its global reach. In 1993, it entered the Mexican market and, two years later, announced its intention to enter the entire Latin American market as well. The firm also established Tradeteam, a joint venture that served the UK beverage industry. By 1996, the company had restructured into five distinct business units: automotive, electronics, retail, consumer, and petroleum and chemicals.

NFC continued to revamp its operations, streamlining internal business processes in 1997 and creating a global board of officers in 1998. That year, its Exel Logistics unit acquired the logistics division of Walsh Western Group and Monros Logistica of Spain. Perhaps its most significant move, however, was the decision to sell its Allied Pickford Moving Services division in an effort to focus on its supply chain management businesses. It was this focus that made NFC attractive to its merger partner.

The 2000 Merger

Upon entering the new century, Ocean—whose focus had shifted to global logistics in the late 1990s—was searching for a merger partner that would solidify its position in the industry. Having undergone a restructuring effort itself, NFC seemed to fit the bill with its strong supply chain management structure. Both companies agreed that a union would be beneficial and in February 2000, Ocean Group announced its £1.64 merger with NFC. The deal was completed in May of that year and created one of the world’s largest global logistics concerns. A May 2000 Logistics Management and Distribution Report claimed that the merger was prompted by the “need to provide customers with integrated supply chain management and information technology on a global basis.” The article also pointed to four trends—increased globalization, the growth of logistics outsourcing, worldwide consolidation throughout many industries, and the increase in e-commerce—that made the merger attractive to both companies.

The newly merged company adopted the Exel plc name and was headed by Allan. Under his continued leadership, Exel made several key acquisitions including Total Logistics Co., whose operations were based in the Asia Pacific region, U.S.-based FX Coughlin, and Werthmann Koster, a German automotive logistics provider. In 2002, United States Consolidation Limited, All Cargo Logistics, and Power Logistics and Power Europe were purchased. Exel also disposed of several non-core assets, including Exel Froid, a French chilled food distribution business, and its German frozen food distribution business.

Demand for Exel’s services in both the technology and automotive sectors began to fall off as global economies weakened during the early years of the new century. At the same time, however, the trend to outsource logistical needs continued to grow, placing Exel in a prime position. While only time would tell if the 2000 merger would pay off, Exel management was confident that the company would continue to rank among the world’s leading logistics concerns for years to come.

Principal Subsidiaries

Exel Logistics Belgium NV; Exel Logistics France SA; Exel Logistics GmbH (Germany); Exel Europe Ltd.; Exel Freight Management UK Ltd.; Higgs International Ltd.; Mercury International Ltd.; Tradeteam Ltd. (50.1%); Exel Walsh Western Holdings Ltd. (Ireland); Exel Italy SpA; Exel Services Holdings BV (The Netherlands); Exel SL (Spain); Exel Freight Management AB (Sweden); Exel Global Logistics Canada Inc.; Exel Logistics de Mexico SA de CV; Exel Inc. (U.S.); Exel Direct Inc. (U.S.); Exel Global Logistics Inc. (U.S.); Exel North American Logistics Inc. (U.S.); Exel Transportation Services Inc. (U.S.); FX Coughlin Inc. (U.S.); Exel Hong Kong Ltd.; Exel Japan KK; Exel Logistics Korea Ltd.; Exel Singapore Pte Ltd.; Cory Environmental Ltd.