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Appendix 1

Discussion areas for Pilot Study

Background on the company/organisation.

Who is the customer receiving aftermarket services?

Is aftermarket issues included in the purchase decision?

How is aftermarket rated compared to other variables?

What is your definition of aftermarket?

What are the parts of en effective aftermarket system?

How would you rate the parts of an aftermarket system?

Can you give some examples in each aftermarket area?

What do you think is missing in the aftermarket systems today?

Do you have any own reflections that I have overlooked?

Who are the major truck operators in NZ?

Which are the major suppliers/brands sold?

What are the critical areas for truck operator in NZ today?

I

Appendix 2

Interview A

Interviewee: Alan Chin-Poy Date: 990329 Time: 08:55 – 09:30 Location: Shell head office NZ

I = Interviewee G = Göran Sällvin

I: So you are looking at the after market side of things? Once I bought a truck of Max for instance, what happens or what I expect from the supplier?

G: Yes, or kind of like what are the key issues? I was just wondering if you first could tell me something about you background, what is your position and the function of that so that I can get an understanding about who you are?

I: I am the transport engineer of Shell New Zealand, and my role is to organise the manufacturing and maintenance of all the company’s transport fleet. So the semi-trailers and dog-trailers and tanks and all the Shell owned equipment and all the regulatory standards on them. Also, can I give you a little bit of background?

G: Sure!

I: Shell worldwide has different operating standards but in New Zealand we had up to the early eighties a completely company operation with company drivers and Shell owned every piece of equipment. So my involvement was buying and building and maintaining and then eventually selling all the trucks and trailers. In the mid 1980’s we changed from a company operation to what we call an owner-driver operation. The owner-driver owns the chassis and Shell supplies all the other equipment, all the tanks and trailers and so on, and we maintain that and the owner-driver maintains the chassis. We are now in another stage when we’re cancelling or terminating or not renewing as the contracts expire for the owner-drivers and we go to three operators for the whole country.

G: Ok, so you are getting three logistics partners for the distribution?

I: Yes, at this stage Shell will still own all the tanks and trailers but the contractor will own the vehicle and have it serviced. So we are right in the middle of that lay up and eventually when they have proven that they can do the work efficiently, safe and economically we will sell the equipment to them. So Shell will come out of the transport business and will just sell fuel. So Shell in NZ is basically a fuel marketing company and we also have what we would call upstream which is exploration and mining, non-traditional stuff like forestry and coal mines which is sort of energy sources. And we will just be a marketing company.

G: Ok, how many trucks are operating for you, on your behalf in NZ?

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I: I thought you might ask me that, when we went from a company operation we had 143 drivers and about 200 vehicles. We then went to owner-drivers and came out with 74 owner-drivers and about two thirds of the vehicles. We are now at a stage where we’ve got, we will end up with three contractors operating about 50-60 vehicles, that is nation-wide across the three contractors. We have also service station business, which is retail, and we just refer to that as our bulk business. We have the rural sector, which currently we have eleven distributors working for us with two trucks each. So there is 22 trucks delivering fuel for the farmers and contractors out in the bush and those people are a sort of a part of the business but they work for a different part of our business. We have three major business sectors; we have retail, commercial and operations. I work in operations, the rural stuff is in commercial and all the service stations are in retail.

G: What is you definition of after sales?

I: After sales to us is support from the dealer network for the vehicles we purchase as of when we require it and it could be in the middle of the night, it could be on the weekends, whatever.

G: So when something is not working you want the after sales service to be there?

I: The way we are structuring the business we will have very little extra capacity and we will only have for the whole country half a dussin relief vehicles. So the emphasis on the contractor to work 24h/day and eventually we hope that they will eaven own the relief vehicles. So when something breaks down we will expect it to be fixed as quickly as possible, certainly within 24h maximum. We could not survive with out a vehicle for 24h because of our schedule is so tight that service stations or contractors would start to run out of fuel. So they have to respond and nationally we have contracts with a number of service providers like Truck stops, Titan Plant or Cable Price, who are the Scania people, and that is 24h call. So if anything breaks down in the middle of the night we can just ring up and they respond and that is what we expect. It is driven by the fact that for the scale of economy we have very little plant that we do not use. So when it breaks down it has to be fixed.

G: Looking from the Shell point of view, who is the customer for after sales in the organisation? Is that you?

I: At this stage yes. I am the customer because Shell owns the equipment so we want it serviced. Eventually the contractors will be the customers and they will expect the same response.

G: That is one of the issues I am thinking about, who are the customer in this relationship? Is it the transport engineer that is the customer? Do you know anything about how after sales and service are included when you are purchasing a truck?

I: Some of the vehicles are purchased with a full maintenance cover. Scania having the Scaniplan and Volvo having, I don’t know what it is called but that’s not important. All the big operators in the country they have a full maintenance package but we also have in NZ a number of vehicles through a lease company. So it is a full operating lease. The Lease Company offers us to provide a vehicle within 60h I think it is. So they do not respond until 60h, whereas the other people respond as required. Because some of our vehicles are semi-trailers or tractor units it is easy to just take the tractor unit away and put another tractor unit there. For all the rural business there are dedicated vehicles, they are rigid vehicles with the

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tank on the back and you just don’t have spare vehicles, we have it bit the lease companies and service providers don’t have it. And those are the vehicles that we are most vulnerable with.

G: If we are going back to the purchasing activities, do you know if there are any rating of the different points of interest such as after sales, price or is the total economy that is important?

I: To me the most important thing is that the response had to be almost immediate and the vehicles had to be on the road, some others think….

G: But now we are talking about the after sales, and I was referring to purchasing.

I: Purchasing for us is always value for money but one of the things that we find is the criteria that drivers are in and out the truck so many times during the day that we got to have good access, easy to get in and out of the vehicle.

G: That is the part concerning the design of the vehicle?

I: Yes. The people that we deal with I guess one of the selection criteria is, for the distributor fleet for instance we bought a mixture of Scanias and Volvos and put them into areas where the suppliers could provide the after sales service. So in different parts of NZ we knew from experience that for instance the Scanias were getting better service than Volvos. We have learnt that during the 20 years we have been in NZ, the company vehicles and trucks for the owner-drivers and our distributors and we found when we looked over a period of time that certain areas had always had Scanias, Volvos or MACKs. So we bought those brands for those areas. We based that on the previous performance of the after sales service in those areas. Price is important but probably not so much to us. We have international money and our purchasing power is pretty good, the refund on money is very low, money is important but probably not as much as to an ordinary contractor. The service was one of the key issues and from the drivers point of view that they had good access, good vehicles, user friendly if you like, good visibility and I always liked the European safety standards and that’s another issue for us.

G: Do you think that somebody else within Shell looking at the purchase decision would look at it another way? It is obvious that you think about the operating issues since you are in that area. But what do you think that for example the financial manager would think?

I: They would probably look at it in another way but as long as the safety issues and the other core values are there. We have a tender board that tender the purchase and then make recommendations about who we want to buy so at that point we can say that this is not the cheapest but for these reasons we want to buy this particular truck.

G: Lets go back to where we were a little while ago, what do you think are the effective parts of an after sales system? Basically it is about having the truck run day and night but is there some specific parts that are of special importance? Is it accessing service stations, parts delivery, if you sort out the different activities?

I: We don’t worry that much about that since we bought the vehicles and expect the supplier to be able to provide the service for them. Within Shell we conduct training for all the people servicing our equipment. Once we have done the training and we are comfortable with the

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people being able to meet all Shells and regulatory standards, in the fact that we have dealt with so many of these people for years we have a trustful relationship.

G: What you are describing sounds to me like trust is an important issue?

I: It’s a good point you made there, years ago Shell had managers in three different regions that were looking after the day to day running of the business, not just the transport but all of the order taking and the rest of it. A couple of years ago we brought all that back to the head office. Another person and myself control the maintenance and there are only the two of us to look after the fleet so trust is very important. We have this kind of relationship on the safety side so that they can do all the service on our equipment, by training them, to the standards. We have developed this relationship and it is based on trust, that I can pick up the phone and call the guy in Auckland and the same in the South Island and tell him what to do whatever truck or trailer and you get a good response. That happens day and night if the phone rings they respond and we trust them to do the work since we have taken them through the training and brought them to a level of completing the work we want them to do.

G: Ok, from what I can understand we are talking about three components, we are talking about truck up-time, trust and competence. What about the price of parts and so on does that matter?

I: We have very little control over that, because the prices are set nation-wide and Shell has a discount and we don’t worry that much about it.

G: You are more into buying the whole package and not worrying about the parts of the package?

I: Parts tend to be a bit dear from time to time but you know we are on the other side of the world so all the transport costs and storage costs, we can’t check that as long as it is reasonable.

G: Concerning the competence area you provide the training?

I: We have a person at Shell who looks after those issues, anything Shell do there is a procedure we must follow both in the practical work and regarding the documentation.

G: But you are training for example the Volvo people to do you work?

I: Yes. Because the nature of our vehicles with dangerous goods there is certain things you can and can’t do and we train them on all those aspects.

G: They have to be like certified Shell service providers?

I: Yes, just so that they know all the procedures that are necessary when working on the vehicles.

G: If we are talking about the trust this is something that you build up from long relationships, do you thing that there is anything else as regarding the issue of trust? Or is it just the past performance that matters?

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I: Yes, performance plus the fact that when we had our own garages, we had our own garages and workshops, a lot of their staff went across to our service providers anyway and they trained the staff in their turn with Shell maintenance if you like. So it was a build up of skills and trust. A networking relationship one could call it.

G: Do you think that there are some parts in the after sales that the suppliers are overlooking or missing? Is there something that you would like to see more of or? To make you more happy with it.

I: This is a personal view, I think that some of them could put in more effort in training their staff. The skill levels are pretty good but I sense some of the time that the workers in the workshop do not get enough training. The workshop owner does not put the time and the money in the training. The workshops tend to have a handful of people that are trained to handle the dangerous goods truck and then they have their general workforce. But if those key people are not there the general workforce starts to handle the dangerous goods side.

G: The desired competence level is to narrow?

I: Yes, of course everybody can’t know how to do everything but you would like him or her to.

G: Anything else that you would like to see improved?

I: I am reasonable comfortable with the after sales side. On a scale of five they would probably get a four.

G: Do you have any own reflections or are it something that I have overlooked?

I: There was a focus group study made by a consultantancy firm that could be useful for you.

G: I am going to look at the major operators of trucks in NZ. I don’t know if you are one anymore but you certainly were, are the guys in the same position as you the right ones to talk to?

I: The people with my position or the operations manager would be the people you would like to talk to.

G: That is a difficult part, to figure out who is the customer in these relationships.

I: There is a wide range of different companies involved in the NZ transportation market and they all are a bit different. Also all of the major truck suppliers has an after sales package connected to their sale of trucks. Some packages involve a cents/km cost and we are currently running at a cost of 10c/km and I think that there is a MACK package that is about 5c.

G: Do you have any suggestions about people that should be good for me to meet to find out more about this area?

I: The transport industry in New Zealand are actually struggling a bit at the moment, quite a downturn in the transport business and some of the bigger operators they got locked into things like logging contracts lots of them nearly gone broke. They had dussins of trucks,

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hundreds of trucks, the transport industry is struggling, and the new sales are way down. You have actually came at a time when the transport industry is sort of restructuring and rethinking their way of conducting business. In Shells case the present system of owner-drivers did not bring down the costs far enough so that is why the new solution with three transport partners are on the way. We believe that it will give us extra savings but after that it will not be able to get it any cheaper.

G: These operators who are they?

I: The one in Auckland is Provincial Transport, they run general freight mostly and they only gained our business as a package. Dave Malanaty at Provincial Transport, he lives at a place called Thames that is about an hour and three quarters from Auckland, east of Hamilton. There is a guy in Seawiew, John Andersen, and Andersen’s Transport who runs quite a good operation; he might be one of those we consider for the future. A part from those there is Hulenburg in New Plymouth; he runs a good fleet of American trucks. That is about the only ones that I can see right now that is not going through a major restructuring.

G: Do you have any other ideas about organisations that would be useful to meat?

I: maybe some of the big dairy companies would be good, but they do a lot of their own maintenance. They are big buyers of Scanias and Volvos; they buy 10 trucks a time, which is big for NZ. So the dairy companies, Northland Dairy or Kiwi Dairy who is in New Plymouth as well. They are the bigger operators. Somebody in RTA might give you some leads. In fact Kerry Arnold at RTA would be able to give you something. Kerry does a lot of work behind the scenes and does a lot of travelling overseas; he would be a good contact to see. He has a lot of background on the costing in the transport industry. He is also involved in the Land Transport Safety Authority (LTSA); they set the axes weights and the limits and so on. IN NZ we struggle a bit with axis weights, unlike Europe we are not allowed to carry near as much as the trucks are designed for so in fact the vehicles that we get are really overspecificated for the work we do. So the operating is different from what you would see for instance in Sweden.

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Interview B

Interviewee: Tony Friedlander Date: 990329 Time: 13:55 – 14:40 Location: Road Transport

Forum, NZ


G: For the operation of trucks in NZ which do you consider to be the critical areas or areas of concern today? Is it for example regulations?

I: Oh, the major areas of concern. The major areas would be government policy, how low price and operate rates, the area of regulation on the economic and safety compliance enforcement. It might be two more principal ones, the issue of productivity of vehicles with weights and dimensions and things like that, productivity of staff. Then there are the general safety issues. These are the five areas that we are concerned with.

G: The safety issue is that something that has changed during the past few years?

I: The general worldwide manufacturer and calls for truck safety on the roads. We have got a pretty good record but it can always get better and not just for the platitude. Lets say we got to recognise it if we want to achieve some of the productivity gains we are looking for with increased weights, dimensions and driving hours we got to show that the industry is safe, it operates safely. That means solving some of those safety issues.

G: When you are talking about productivity you talk about weights and dimensions and so on, if you compare the NZ market to other markets is it for instance common to have heavy haulage and the large trailer size as in Australia?

I: On the productivity issues there are different areas of the market in terms for improving productivity. On the long distance transport, long haul, forestry some dairies, large stock you will come to an increase weights and dimensions. A lot of the general freight distribution in the metropolitan areas with the exception of container carriage, weights and dimensions are probably not such a big issue. You are down to smaller trucks and route planning and other things become more important. When you come over to container transport weights and dimensions are again an issue. So it depends on which part of the industry you are talking about. Those are very broad classifications of what is important and what is not. There is of course a wide range of specific cases that one have to consider.

G: When the operators today are thinking about purchasing a new truck, what do you think are the issues that they consider? Do they consider price or is it operation time or is it the service part, engine power?

I: The short answer from me is that I do not know. I look after the policy issues and we have as many views on what you are looking for in a truck as you would have in Sweden. The best way to find out that is to ask some people that actually buy trucks. I have never driven a truck

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in my life. I know what people say to me from time to time but if you ask me what motivated them to buy a certain vehicle I can not say that.

G: I was wondering if there seems to be some overall tendency?

I: You will see that it will vary around a whole range of factors. The tare-weight is quite important. What sort of productivity can they achieve and so on so the whole range of issues come into the decision. The engine, the capacity or design of the suspension.

G: from Volvo in Australia I got the picture that engine power was the overall biggest issue. That is why I was asking if there were some thing similar over here?

I: There may be but I have never bothered to try and find out since it is not a part of my job. I am trying to influence the policy that gives them as much flexibility as possible.

G: From what I have heard the new Zealand truck market is in some kind of restructuring phase right now, is that true?

I: We have been going through a restructuring since probably the early 1980’s. We had a very heavy regulated transport sector where in one stage you could only cart, I think it was 40 miles, against rail. Anything above that you had to get a special permit which rail would oppose. Now all of that is gone. You can cart against rail anywhere and the same when people used to have great difficulty when entering the industry. There was a quantitative licensing system that basically said that you had to show that there was a demand for your cartridge services before you could get into an area. Now you can buy a truck tomorrow and as long as we can show that we got the appropriate licenses and that we passed a certificate of fitness; a certificate of knowledge test we can start operating trucks. So the barriers to entry is very low now. So you got all of that has taken place to allow intense competition in the marketplace.

G: Is that both for the operators and the suppliers of trucks?

I: I expect that is probably have been a major boom for the suppliers of trucks for a start in that we moved from about 60% market share, actually 52% if you go back to the mid 70’s, to 80% market share now. That has created a substantial market for equipment, trucks and trailers and so on.

G: This market share growths implies that the operators have bought more trucks during that period so now they are replacing their trucks which means that the market has stabilised itself around the present level?

I: When I am saying that we have gone from 50 to 80% it does not mean that we have had that increase in the number of trucks and the productivity has improved quite substantially. There has been some growth in the number of trucks out there. Now the suppliers are more affected by the replenishment policies and the repairs and maintenance polices. We will grow as an industry at a faster rate than the rest of the economy. That has been borne out of the last twenty years anyway. That is the total transport market and we share that with rail but we will continuo to get 80% of it. The indications are that the average growth rate or demand for the transport industry is greater than the rest of the economy. It is hard to put a figure on it but I suspect we grow at least half as fast. How much of that will be in expanded trucking fleet I do not know.

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G: It is interesting to know if the business of the future for the suppliers is to sell new trucks or providing parts?

I: Again I am not the one to talk to, I can only say if the market has a certain size and what will happen to it. My view is that it will continuo to grow. But if you want to work out particularly in that market it depends on over what period of time will an operator of a truck write off the truck? Is it a ten-year or five-year period or is as I suspect that trucks never die. Someone else buys them and so you get that increase in the number of trucks out there and there are many of them around. We think that our members have about 80% of the freight in the country but that is only about seventeen or eighteen thousand trucks and the rest… there are fifty thousand trucks sitting out there. A lot of them are in use in the business that owns them they might not be involved in a transportation business. It will remain that way so it is a question of how long people will operate those trucks; at what point will they go off the market.

G: How has the Asian crisis affected the New Zealand truck market?

I: It has affected the freight volumes especially for forestry but they have been picking up and for whole ranges of reasons the forestry companies are still exporting logs, pulp and paper products as well as timber itself. So the crisis had a little impact probably for six to twelve months and we are now seeing those sectors starting to export again. It sounds a little bit simplistic to say but all I have to do is look at the growth forecast. If it says that it is going to be a three percent growth in the economy the next twelve months I am pretty sure it will be three or four percent or maybe more in transport. It all depends very much on which direction the economy is going. It is so basic as when the economy grows it is an increase in consumption and when somebody buys something it has to get to the customer in one way or the other and that results in transportation.

G: Are there any import barriers within the trucking industry in New Zealand right now?

I: No not really. There were some restrictions on imports of trailers and so on because there were somebody making them somewhere that could not get internationally competitive and so most of those barriers are gone.

G: You are a representative for the Road Transportation Forum (RTF) right? And then there is the Road Transportation Association (RTA)?

I: There are regional offices around the country and each of them is an association and are autonomous units. The RTF is the national umbrella for all the RTAs around the country. RTF was called RTA but then two more transport organisations joined and we formed RTF about two years ago.

G: Do you think that there might be some people in the associations that might be of interest for me to talk to?

I: It could be, the regions have their regional offices and you can talk to them. They do not deal with policy issues but with more day to day transport operators problems so you are welcome to talk to them.

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G: Do you help the members with contacts with the unions?

I: No, each firm negotiates individually with the unions. Industrial relations are not an issue for us. We might give some advice but no direct contacts. We also give legal advice and provide a whole lot of information regarding regulations and so on.

G: Under which government department does the transport issues sort under?

I: There are the ministry of transport, which deals with policy issues. But there is also the roading issues and the Trans found and transit and then you have the land transportation authority and they also look after policy issues and then we have some dealings with the police some dealings with other ministry’s such of forestry and agriculture.

G: Do you know if there are any good database or something like that about transportation and/or trucking industry in New Zealand which you could get access to?

I: What sort of things are you looking for?

G: The area that I am interested in is the area of service and after sales and the places I have looked at this far I mostly found articles about USA or Europe which is irrelevant right now.

I: We gather a bit of information but most of that is now held in note form rather than any reference form. The ministry of transport may have some data but we tend to have better information than they have on most things in relations to trucks. You will find that in transport New Zealand it is a total lack of official information. There are some statistics about how much is transported and how many kilometres it is transported. If you want to know something you will have to go to the different industry associations. If I want to know what goes on in forestry I go to the forestry association and I go to the dairy industry to find out their anticipated growth rate. By far the biggest projected demand is going to be in forestry. That is because there were a lot of planting about twenty to twenty-five years ago that is now coming through. The dairy industry is also growing still which creates a transport demand. Also with the closure of dairy factories and the centralisation of the industry. I think that were we earlier has seen labour and capital exchanges we are now seeing capital and transport exchange. Instead of building a factory you transport it to the factory that exists. It will be growth in both inter city/metropolitan transportation and long haul. Much of the industry is now centralised in Auckland and we have also seen the move away from keeping warehouses and wholesalers around the country and an increase of just in time deliveries to the whole of New Zealand. Then you got the wharf issues and it looks to me as we are going to see two principal wharfs in New Zealand. Auckland will handle the bulk of the imports and also a lot of the exports, Tauranga will handle logs and then there will be some small specialist ones and Lytelton will probably be the export port for the south island. So the distribution will mainly go out and in through those ports.

G: You said in the beginning that you had some good names of companies that I might be able to come in contact with.

I: What sort of companies do you want to meet?

G: I am looking for really any truck operator that buys and operate trucks. I am mostly interested in the major or biggest ones.

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I: There are those that operates a lot of owner-drivers and they are not the ones you are looking for?

G: No.

I: So, the companies that first comes in to mind are: United Transport in Whangarei, Owens Transport in Auckland, Mainfreight but they are mostly owner-divers, Bonniy Transport in Auckland, New Zealand Dairy group in Hamilton, Kiwi Dairy company in Hawera, Hawkes Bay Farmers Transport in Hastings that is part of the Eastern Equities group, Transport Nelson Ltd in Nelson, Wilders transport in Christchurch, Richardson group in Invercargill you will not find many trucks that has Richardson’s written on them but they own a lot of trucking companies, Mike Lambert Ltd in Mt Manganui South, Tapper Transport in Auckland, Bridge freight in Auckland, TD Haulage in Tauranga, Provincial Transport in Thames, Hooker Brothers Transport in New Plymouth. The easiest thing to do is just to take the yellow pages and just have a look depending on how many you want to see and the suppliers also got a client list.

G: Yes, but they are a little bit biased so I am looking for a more independent opinion.

I: You got a reasonable cross section of them here. There are a lot of companies around that operate fifteen to forty trucks. The actual number of big ones is not that great. We have got seventy companies with twenty trucks or more. Another big one by the way is Fulton Hougan in Dunedin. OK! The thing I would do is to pick up the specialist areas and manly the Forestry and Dairy areas where a big demand will come from in the future. Maybe talk to the shipping companies about which companies that are operating from the ports that will be centralised on and they will be able to give you an idea about what is happening in those markets. It really depends on what you are trying to dig out when we are talking about the aftermarket.

G: I am trying to figure out what the customers would like to have, what are the key issues?

I: That will depend in each sector, I imagine, you will just have to talk to theses guys. We mostly look on the policies that can help them increase their productivity.

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Interview C

Interviewee: Keith Bradley Date: 990416 Time: 10:55 – 11:20 Location: Titan, Lower Hutt


G: Your name is Keith Bradley, right?

I: Yes.

G: What is your function/title?

I: Company Director.

G: The name of the company is?

I: Wellington Fuel Haulage.

G: How big is the company? How many trucks do you operate?

I: Four, two eight by four and two six by four trucks.

G: Do you have a definition of your own of aftersales/aftermarket?

I: What do you mean by that? What has Titan’s been like or?

G: Not Titan in particular but what do you think overall about aftermarket/aftersales?

I: Volvo I recognise has to get away from their engines, because they are useless.

G: But that is the product more than the aftermarket, right?

I: Yes I suppose it is. But you know all the parts out here (Titan, Lower Hutt) they are all good. The trucks are all right but they just not seem to do the distance like the American ones. Well I got an American truck as well, a Kenworth. We only bought that because the Volvo had oil consumption problems and nobody seemed to give a shit. So we thought well we are going to get an American truck and at the moment we have four trucks coming up due for replacement and we definitely going to look at an American truck.

G: But this is about truck quality, it has not so much to do with service and parts delivery?

I: Well, the products are all right it is just the engine.

G: If we think more about aftermarket, service and parts delivery if the truck breaks down. What do you think are the most important parts in an aftermarket system? What services

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would you like to have? You can include both things that you have today and things that you do not have.

I: The service you know is good, the backup is pretty good. There are better people around but at the same time there are a lot more, worse people around. Parts they can get from overseas just like that, they will be here tomorrow morning.

G: That is something that is really important for you?

I: Oh, yes. The trucks work 24h a day and we can not have a truck sitting on the side of the road because they do not have some specific part or that they do not got anything.

G: So, when considering truck up time is parts supply one of the more important things?

I: Yes, it is important to be able to do that.

G: More things, can that be like always being close to service and dealers?

I: Well I suppose being here in Wellington where the main Volvo people are might be different to be at the other end of the island. They might have to wait but that is their problem, right. That is good for us. For the Kenworth we got the main, Southpac trucks are in Auckland and we have a bit of a problem with parts there. The smallest of things you have to wait for sometimes and we stand on a lot of people’s toes but Volvo has been good.

G: That is one component of the aftermarket, the parts supply. What other parts do you consider to be important in giving you the truck up time you want?

I: Yes all workshops and they are good to, I just had a truck come out of there they did the engine up on it. They worked days and nights and they got it going in two days that is for a total rebuild. That is something we got to live with you can not do that in ten minutes. That was good.

G: Service is also an important part then?

I: Yes, you know that a few years ago it was rubbish, it was crap. Nobody knew anything about Volvos. There is not enough training for the mechanics to bee kept up to date with the technology. Like you have got the new FM Volvos coming in and it is good to see them now putting guys on courses before the trucks are getting here. What was happening before with the FH it seemed as if the truck comes out and the guys know nothing about it. But there is also the parts manuals, I was down here yesterday and trying to buy a part, it is an FM part but it would fit in the FH, and they got no parts books. So for an operator that would bring in a new FM Volvo and he wants a part, nobody knows what the part number is because they do not have that information. I recognise that they should have parts books and service technicians up to date before the vehicle gets here.

G: That means that another important part is the educational status of the people that you are dealing with, when you want some service or some parts…

I: Should know before the vehicles get here. They are getting better.

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G: I am interested in finding out what thing you would like to have, and this far we have got parts supply, service and it is going to be fast and convenient I suppose and you want the people to know what they are doing.

I: Especially with new vehicles with new technology for the guys to know before the technology gets here. That is of course a cost to Titan or Volvo but that is not the customers’ problem.

G: Do you have any more things that you think is really important?

I: You buy a truck and they give you a video about how to drive it and things like that. That is good, the salesmen take you out and they show you what all the buttons do. It is just typical salesmen thing. No not really.

G: These are the things that are provided today. Is there something that is not provided by any supplier of trucks that you would like to have?

I: Another thing with the service in Wellington it is good, in Auckland it is good, in Christchurch in might be good, well New Zealand is only a small baby, but in the little places. It is good to have in these little places up with the technology as well, not just the main outlets.

G: An even standard throughout the country?

I: Yes, yes, so all the guys the whole, we are talking the whole of New Zealand, all the technicians they been on a course for Volvo and all that. If you find a Volvo agent along the road and he does not know anything about the truck it is just a waste of time. So instead of paying the expense of sending someone from here 2,5 hours up the road, it would be good to have somebody up there.

G: The educational level has to be the same all over the dealer network and you have to be able to trust them, that they know your truck?

I: Yes, another thing is like if you break down and it is in the afternoon, we have one truck we do not double shift it just works down the line and if it comes down there is places, well it have not, touch wood. But if it breaks down the driver can go to a motel and sleep. And as soon as it is back on the road you can get going. But at the moment it feels like you do not trust them so you have to stay there with them. Stay there and watch what they are doing, not just patching you know.

G: That is both a part of their education level and being able to trust them?

I: Yes, you can see that as soon as you walk in to a workshop, you walk in here everything is good the guy look like they know what they are doing and you can just say do this, this and you can walk away. The way we operate at the moment is that anything that needs doing do it, because we need reliability.

G: You mean that if they find something that needs to be fixed to prevent the truck from breaking down later on you might as well fix it at once?

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I: Yes, preventative maintenance you can call it. Spend $10 to save a 100.

G: Can you think of any more such examples?

I: No, not really. What I found, this is probably getting away from it, with leasing companies that lease lots of Volvos and are very important to Volvo or Titan compared to us, but things do not gets fixed on lease trucks like they do on your own vehicles. They are a kind of patched. If it is ours and we go in here the mechanic fixes it first time, if it is a lease truck, we have got one lease truck, and you bring it around here and they ring the lease company and they say no, no, no. We had an engine breaking lose on 91000k and we complained and complained about this engine for six months that it was burning too much oil. Nobody listened to us so we let it go because we did not own the truck. We just thought that we will drive it till it blows and then we tell them, we told toy so. They only patch them. In my point of view you do not do that with the technology in the engines today. Years ago you could but not nowadays.

G: Is there anything or any kind of service you would like to have that you do not get today?

I: It would be good to have a service agent that is open 24h. But if the business is not there for them they will not go ahead and do it.

G: Today there is the 0800 number right?

I: That 0800 number is all right. We had to use it two times this week and you get somebody in the other end and they take your number but in a quarter of an hour they ring back and say that the mechanics phone is turned off. So what now?

G: When you are talking about the 24h service thing is it important that the 0800 number works and that would be alright or would you also like that there always be people at the service stations so that you just could pull in at any time?

I: Yes, that would be really good but I do not think, for services like that there is always a cost.

G: Would you be prepared to pay something extra for a 24h service?

I: Yes, but not, it is a limit. See we got to run our trucks 24h a day and we do not run penal rates because it is dark. Maybe the workshops will have to change so that they do not have that. The rate should be the same right across the board but at the same time they still got to have a way to justify it you know. You can not just have a workshop open if there is no work. I see their point of view. But saying that I still think that we get pretty good service and time is a very big thing to us. So the last thing you want to wait for is that the mechanic has not got his phone on. The operator in the other end can not do anything about that. An answer phone is a good thing you know that you can leave a message and first thing in the morning when he checks his answering machine he knows. If you work the night shift and you do not get up until eleven o’clock. Well half his day is gone so maybe it would be good if you had something that you could ring and say that I got a truck that will be in at nine o’clock to get whatever and they can expect it. Because you do not get up to ring a service station. That would be a really good idea especially if we are talking about Titan here in the Wellington area. Sometimes when you get a problem you can run with it through the night but when you

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get here in the morning the place is full but if they knew you were coming they could have made room for you. They also know what the problem is so all the parts could be ready and so on.

G: Does that have anything to do with service planning or are we talking about when something turn up when you are out on the road?

I: We are talking like something mechanical goes wrong in out on the road and it is in the middle of the night obviously the service station is not open. So you ring his telephone and you leave him a message I will be in eight o’clock tomorrow morning and need to get this done. When the truck pulls in you can say that we got this problem and Titan are expecting us got the parts and they are waiting for you. It makes you sleep better after a night shift so when you wake up the first thing you can do is ring the agent and the truck is all fixed and gone.

G: In this specific case is phone the best way or would you be interested in doing it over the Internet in some way?

I: I got e-mail at home but the problem is that you do not have it in the truck and you might live through the night with the problem and you forget it. It is best to give the message immediately the problem shows.

G: You said earlier that you were about to replace four trucks, how much do you take the aftermarket activities in to account when choosing truck?

I: Big time! A salesman will sell you a truck and the workshop will sell you a second truck. The salesman will not sell you the second truck. We bought Kenworth because we were not happy with the response we got off Volvo concerning the oil consumption and things like that. So we went ahead and bought a Kenworth, but I do not know if we will buy another one because they do not have a service agent here in Wellington. If I was here to make a decision now, one it would come down to money, the price of the vehicle and two the second thing is service. I am getting good service here at Volvo/Titan.

G: Hoe much does it matter if you were to get a service deal for the next five years, would you like to have that included or optional?

I: Volvo got Volvo Contract Maintenance, we looked at that but we were not interested cause we do a lot of preventative maintenance. Being a mechanic you know when to do things. But no, the workshop sells the second vehicle. If you are getting real good service, you go in there and they fix it. We are real fussy with things like aluminium; you have to polish it and thing like that. I had mechanics at first that was climbing around all over and leaving marks and climbing up in the cab with overalls on without covers on, I hate that. Now they know that, it has taken me a few arguments but now the first thing they do is cover those areas that is necessary.

G: In terms of after market this means that the relationship is important to.

I: Yes. You get a friendly reception and help but the cost, the Kenworth costs $50 000 more than a Volvo but we still got a Kenworth because that is what we put a price on service and resale is a big thing. There is no resale of Volvos at the moment; everybody’s got them. Kenworth can give us a little bit of a resale value. But it has always been like that again and

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we turn over our trucks every four years. You still got a truck with limited kilometres but it still got a bit of a resale value.

G: I think we have covered most of the things I was thinking about, do you have any own reflections about aftermarket that we have not covered?

I: No, not really.

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Interview D

Interviewee: John Douglas Date: 990419 Time: 09:00 – 09:25 Location: Mainfreight, Lower

Hutt, NZ


G: Your name is John Douglas, right?

I: Yes.

G: What is your function or title?

I: I own the truck and I am contracted to Mainfreight transport.

G: That means that this truck and you are the business?

I: Yes.

G: When you think about aftermarket what comes to your mind first?

I: You mean as in backup for breakdown and that sort of thing?

G: Yes, that may be one component, I just would like to know what comes to your mind.

I: I do not know really.

G: If we go on, what components do you think should be included in a good aftermarket system?

I: 24-hour backup on breakdowns and that sort of thing. With like what I got with Titan, I can break down anywhere in New Zealand, anytime of day or night and it is only one phone call, yes that sort of thing. It does not matter if it is anything with the truck or if it is tyres or any other component on the truck. It is just one phone call for the whole vehicle and I am back on the road again.

G: That is 24 hours 7 days a week backup, that is one important component. But when you call that number somebody comes to you or you go into a shop, what kind of special things are you looking for then? Are you looking for some special thing about the people that service you or special things they should give you?

I: Like I say you want be able to get the parts, you want the people that you are dealing with to know what they are doing so you are back on the road as quick as possible. I can actually, if I break down in this (truck), I can tell the people that I need to fix it and virtually what is wrong with it. Just by going through the computer. That save a lot of time, they do not have to

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come out to me and se what the problem is and then go get the parts. They can bring all the parts with them.

G: They way I see it we have covered really two areas right now. That is availability of parts and knowledge of the people that performs the work. Is there anything more that you think is really important?

I: Not really.

G: Anything, not about the systems you use today but if you could make a wish?

I: No, not really.

G: What about service, changing oil filters and stuff like that, how important is it to be able to do that on your terms?

I: That is very important. Once again I ring and I just say that the truck will be in Wellington today, tomorrow and I just take her (the truck) down and it is done. I do not have to worry. I can come home and go to bed and when I come back to start loading I know that the truck will be parked out here (Mainfreight terminal, Lower Hutt) Everything is done on it, it is ready to go.

G: So the most important thing there is that you get the service when you like it and you do not get to hear something like it is full in the lot or?

I: Yes.

G: Do you have any examples of things that happened to you and how it worked out?

I: Accidents or?

G: Yes, something that made you come in contact the aftermarket service that you use and you thought about something that would have made it even better in that case.

I: I had an accident two years ago right on Christmas time, wiped out the whole front of the truck. It was off the road for over a month. A lot of that time was parts but in saying that it was Christmas time and everything was virtually closed due to statutory holidays, things like that. The guys that were putting it back together were prepared to work right through but they just could not get the parts. It was this parts thing that was holding them up. Possibly these places could have either someone on or someone that you can get hold of so you can get these parts and get back on the road again. I had to hire a truck to do the job while mine was off the road and that cost me a lot of money.

G: Is that something that could be a part of an aftermarket system? The possibility to borrow a truck or maybe hire it for a rebated fee since they can not provide the parts. Do you think that could be a thing you could demand from the suppliers?

I: Possibly, yes it would be nice. It is probably not demanded but you know. If they can not supply the parts they could give you something so you can carry on until you do get the parts.

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G: Of these different things we have talked about, which would you say is the most important? The overall objective is to stay on the road but what of the different parts that we have talked about, if you would like to rate them which one would be the most important one?

I: The most important one is to have the vehicle available, ready to go 24 hours a day. While it is parked up it is not making money. It is not costing me anything basically. That would be number one that it is ready on any time of the day.

G: To make sure that you can have the truck operational 24h a day, what do you think is the crucial thing, if you had to choose between service, supply of parts and all those things. Which one would you choose if you only got access to one of those services?

I: The servicing.

G: As second?

I: Obviously parts but the servicing is the big thing.

G: Do you think otherwise that there is something missing in the aftermarket systems today?

I: No, not really. That has got pretty much everything covered as far as that goes.

G: Do you think that there are some issues, it might not be directly aftermarket but may affect is that we have not discussed?

I: No, not really. I think I am only going on the servicing and the backup that I have got with this truck.

G: Have you herd anything from colleagues and stuff like that?

I: I am not saying it is the same with other trucks, it could be totally different. Titan has got workshops all over the country. I would say probably within an hour and a half, or possibly maybe in an hour I could be parked anywhere and they can be there. A lot of the other guys, I know Scania has got the same. There are others that are only in the main centres but you can only go on your own personal experience.

G: Do you think there is a big difference between you as an owner-driver and a company that would operate several trucks? Do you think you have the same needs in the aftermarket?

I: Yes. Bigger companies that are using drivers tend to have a lot more problems as far as trucks breaking down. I do not know whether it is the way they drive them. It is a lot different if you are driving something that you know if something happens to it you will have to pay to get it fixed. You tend to drive a little bit differently. There are some, there are a lot of good driver out there, but there is always a few bad apples around and you see a lot of them are very hard on the gear they drive.

G: If you were to buy a new truck, how important is the aftermarket package that comes or not comes with it?

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I: That is very important. I am actually looking at replacing this one and I have had a few prices from Volvo, Scania and freightliner and they all pretty much of a mushiness. The Volvo and Scania you can get what they call a maintenance plan. I have got that on this one (Volvo FH). I am covered for 800.000km, if I blow a motor or a gearbox anything that goes wrong, they fix it. It cost me a lot of money as an insurance. Scania do the same, Freightliner will do it, I think just about anyone will do it now.

G: How important is that if you compare it to price? Is it possible to set a price on a good aftermarket package?

I: Yes, the way they work it, they work it on km that you are going to do. On this one my package is for five years or 800.000km, which ever comes first. So within that period I do not have to worry and I have got a set cost a month that I am paying so it makes it easy to budget. You will not all of a sudden be hit by a NZ$35.000 for a motor. It gives you a peace of mind.

G: Could it be possible for you to pay more for a truck if you know that you get a better aftermarket service than choosing another truck that is cheaper, anticipating that the quality of the vehicles are the same?

I: Yes, I could go and by a cheaper one and not getting the backup but you will get going to sort of the top of the market.

G: Just one last thing. I am asking you again if you think that there is something that we have not covered within the area of aftermarket?

I: No, not really.

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Appendix 3

Interview guide – Operators

Introduction

This research/interview is about the aftermarket/aftersales activities in the New Zealand truck market. The purpose is to identify the key issues to enable companies to reach the highest customer satisfaction possible. This is a part of my masters’ thesis at the University in Stockholm, Sweden. I am conducting the research in co-operation with Volvo trucks. My official report will go to Stockholm University and an adapted version of that report will be sent to Volvo in Sweden. The main purpose is not to measure how satisfied you are today; it is to find out what you would like to be included in the aftermarket activities. I will start by asking some back ground questions and follow with some overall questions about aftermarket. Finally I will conclude with some more specific questions that I am interested to know what you think about.

Background information

Have I got your name correct?

Is it OK for me to publish you name in the report?

What is the name of the company you are working for?

What is your function/title?

What type of business do you operate in?

(The respondents area)

In what geographical areas do you operate?

How many trucks does “the company” operate?

How many of these trucks are a) leased or b) owned by the company?

How many of these trucks do you have on a repair and maintenance contract?

Aftermarket in common

What do you think of when I say Truck aftermarket activities?

(If the interviewee is unsure about what is aimed at, give him/her the simple definition of:

“Services provided by truck supplier after the truck is purchased” as a help.)

What is the overall objective of aftermarket activities from your point of view?

What are the pieces of an effective aftermarket system?

(Write down the pieces on a separate piece of paper.

If the interviewee is unsure about what is intended give him/her the examples of Breakdown

service and Maintenance)

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Are you satisfied with the current services?

Follow up on aftermarket services

In order of importance, can you rate the aftermarket services you mentioned?

(See answer to question above and notes on separate paper.)

Is the “(Aftermarket service mentioned above)” something that you get provided today?

(If the answer is No continue with section 5 for that service)

How is the “(aftermarket service mentioned above)” provided to you?

How could it be provided in a more effective or efficient way?

Developing the aftermarket

What do you think is missing in the after market systems available on the market today?

(Write down on a separate piece of paper)

Can you give examples of how these services could be provided to you?

Would you be prepared to pay for that service?

Where would that fit in to the rating you did on current services?

(Compare with notes from part 3 &5)

Specific questions

1. Internal operationsHow much of the maintenance and repairs is done in your own shops today? (Percentage)

Will the amount of work done in house change in the future? (More/Less)

How important is it for you to have one supplier/ contact for servicing/ breakdown on your

entire fleet of trucks? Very important, Important, Indifferent, Not at all important?

Are you looking for that currently? (Yes/No, if No, go to 6.2)

Which of the following activities would you like that the single supplier to provide?

(Give the interviewee supplement 1 and get a Yes/No answer on each activity and tick off below, conclude to ask if there were something more that the interviewee would like the supplier to provide.

Breakdown Parts supplyServicingFleet maintenance schedulingComplete fleet maintenance managementRepair and maintenance contractOther _____________________

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_____________________)

2. DealershipsCan you rate the following dealership services in order of importance?

(Give the interviewee supplement 2 and tick off below:Breakdown servicesParts supplyServicingOutsourced services)

(If outsourced services rate last, ask next question. Otherwise continuo to the following question)

You rated outsourced services last; does that mean that it is not important at all?

Of the outsourced services, can you rate these different activities in the order of importance?

(Give interviewee supplement 3 and tick off below:Tyres changedWindscreen repairedAir conditioning repairsAuto electrical work Wheel alignment Other ______________________

____________________________________________)

There is a trade off between the number of dealers and the service level that dealers provide

simply because of the volume of business each dealer gets. Which is more important the

dealer coverage or the quality of service that each dealer provides?

Would a classification, in terms of what services they provide, of the dealerships be of any

value to you?

(For example only breakdown service or both breakdown and maintenance service)

Is the physical location of the individual dealership important?

Would you expect the dealer to supply you with a relief vehicle during a major repair/rebuild?

How much would you be prepared to pay for that?

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3. Supplier operations

1. Parts supplyWithin the area of parts supply, can you rate these different activities in the order of

importance to you?

(Give interviewee supplement 4 and tick off below:AvailabilityPriceChoice, for example Rebuilt parts, Manufacturer parts, Second hand parts and “Pirate”parts)

2. ServiceWithin the area of service, can you rate these different activities in the order of importance to

you, in terms of service availability?

(Give the interviewee supplement 5 and tick off below:Special tools, for example diagnostic equipment, customised tools.Breakdown service 24 hours a day.Fully trained mechanic familiar with truck model.Flexible workshop hoursWorkshop locationOther ___________________________

___________________________ ___________________________)

3. Product SupportHow often would you like to meet a product support representative each year?

Who of the following would you like to meet? Dealer representative, Importer representative,

Manufacturer representative.

Other services that are part of aftermarket are Access to technical support and Problem

solving, can you elaborate on them?

4. Rates and pricesWhat do you think of a system with fixed rates for defined service operations nation-wide?

Would you like to have a copy of the report?

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Supplement 1 – Activities performed by single supplier

Breakdown

Parts supply

Servicing

Fleet maintenance scheduling

Complete fleet maintenance management

Repair and maintenance contract

Other _____________________

_____________________

_____________________

Supplement 2 – Dealerships

Breakdown services

Parts supply

Servicing

Outsourced services

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Supplement 3 – Outsourced services

Tyres changed

Windscreen repaired

Air conditioning repairs

Auto electrical work

Wheel alignment

Other ______________________

______________________

______________________

Supplement 4 – Parts supply

Availability

Price

Choice, for example Rebuilt parts, Manufacturer parts, Second hand parts and

“Pirate”parts)

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Supplement 5 – Service operations

Special tools

Breakdown service 24 hours a day.

Fully trained mechanic familiar with truck model.

Flexible workshop hours

Location

Other ___________________________

___________________________

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Appendix 4

Interview 1

Interviewee: Ivan Conroy Time: 10:00 – 10:35

Date: 990503 Location: Bearsley Express, Napier, NZ

I= Interviewee G=Göran Sällvin

G: Have I got your name correct?

I: Yes.

G: Is it OK for me to publish your name in the report? I: Yes.

G: What is the name of the company that you are working for?

I: Bearsley Express.


I: Assistant Long-haul co-ordinator.

G: What type of business do you operate in?

I: General freight.

G: In what geographical areas do you operate?

I: Auckland, Bay of Plenty, Poverty Bay, Wellington, Hawkes Bay, we do not actually touch New Plymouth. G: How many trucks do you operate?

I: About 40.

G: How many of these trucks are leased respectively owned?

I: There are 3 leased, 12 owner-drivers and 25 are owned by the company.

G: How many of these trucks do you have on a repair and maintenance contract?

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I: That is only the leased ones.

G: What do you think when I say truck aftermarket activities?

I: I am not quite with you there.

G: What would you like to have in an aftermarket system if I provide the definition of: “Services provided by truck supplier after the truck is purchased”?

I: With modern technology I really think that the gear is pretty reliable. I have been in the industry for 25 years now. I have not worked here for such a long time but I was with a big company earlier, which by the way operated quite a few Volvos, and the service has improved. Then I am referring to about eight years ago and by then MACK had a far better service compared to other companies. Today the gear is though more reliable provided that it is serviced right and so on.

G: What is the overall objective of all aftermarket activities from your point of view?

I: Obviously if we can keep the gear going we will provide our customers with a better service. So basically it is to keep the trucks running.

G: What are the pieces of an effective aftermarket system?

I: I do not know how to answer that one, I am not sure.

G: The things that I might be thinking about could be breakdown and maintenance service, could those be something that should be included?

I: Oh, yes.

G: If you go on with more things?

I: Breakdowns, Maintenance, and Availability of parts, Accessories. I know that it costs a lot to keep things in stock but there have been examples when you had to wait three days for parts and that is too long.

G: From an overall perspective are you satisfied with the current services?

I: Yes.

G: In order of importance, can you rate the aftermarket services you mentioned?

I: 1. Breakdown back up, 2. Maintenance, 3. Availability of parts, 4. Accessories.

G: All of these things are that something that you get provided to you today?

I: Yes.

G: Could you give some example on how your breakdown backup works?

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I: Well, at the moment really, see we use the likes of Eastern trucks and Truck Stops and if we have a breakdown here we will contact those guys straight away. They are our main source of help at the moment.

G: Ok that is for breakdown, what about maintenance?

I: We use the same suppliers for that. But I think they need more specialist people in these kinds of places.

G: So that is how it could be provided to you in a more effective or efficient way?

I: Yes, better education of the people.

G: Is there anything more that you could think about how these things could be provided more efficiently or effective?

I: No not really, it is just the matter of having them trained properly.

G: What do you think is missing in the aftermarket systems available on the market today?

I: For instance I think that in some cases there is not enough follow up. Whether it is a new trailer or whether it is a new truck, that is something that I miss. The salesman sells you a truck and then just disappears. There are a lot of details that are discovered when you start using the equipment that could be useful for the manufacturer to know about.

G: So what you would like to have is that someone came and visited you?

I: I think so, I think it does not hurt to have somebody calling around once every couple of months. You almost always have some comments or tips for how to improve the products that can be used in the future.

G: What we are talking about is improved communication between you and the truck supplier.

I: Yes.

G: Where would that fit in to the rating you did on current services?

I: I think it is just as important as anything else is. If I have to fit it into the other list I would put it between Availability of parts and Accessories. It has all to do with not showing up to a customer with a truck that from the outside does not seem to be in good condition.

G: How much of the maintenance and repairs is done in your own shops today?

I: We do not do anything.

G: Will the amount of work done in house change in the future?

I: I do not think so. I do not think it would be economical.

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G: How important is it for you to have one supplier/contact for servicing/breakdown on your entire fleet of trucks?

I: I do not think it is important. You are better off to have two.

G: So that is not something that you are looking for currently?

I: No.

G: Can you rate the following dealership services in order of importance?

I: It is hard but I would say: 1. Breakdown services, 2. Outsourced services, 3. Parts supply and 4. Servicing.

G: Of the outsourced services, can you rate these different activities in the order of importance?

I: 1. Tyres changed, 2. Auto electrical work, 3. Wheel alignment, 4. Windscreen repaired, 5. Air conditioning repairs.

G: There is a trade off between the number of dealers and the service level that dealers provide simply because of the volume of business each dealer gets. Which is most important the dealer coverage or the quality of services that each dealer provides?

I: I think the quality of the service.

G: Would a classification, in terms of what services they provide, of the dealerships be of any value to you?

I: I think so, I mean you know who is doing the job and you know if you want to have the job done properly. Too often we have problems with trusting the dealers all the time. Once we checked a thing that had been a problem that should have been fixed three times on one of our Freightliners and found out that they probably even had not bothered to look at it.

G: Is the physical location of the individual dealership important?

I: It is very handy to have them close. It is not top priority though.

G: Would you expect the dealer to supply you with a relief vehicle during a major repair/rebuild?

I: It would be handy.

G: How much would you be prepared to pay for it?

I: I suppose there is a market price.

G: Within the area of parts supply, can you rate these different activities in the order of importance to you?

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I: 1. Availability, 2. Price, 3. Choice.

G: Within the area of service, can you rate these different activities in the order of importance to you, in terms of service availability?

I: 1. Breakdown service 24 hours a day, 2. Fully trained mechanic familiar with truck model, 3. Flexible workshop hours, 4. Location, 5. Special tools.

G: How often would you like to meet a product support representative each year?

I: I think it is good to keep in touch so once a month would not hurt.

G: Who of the following would you like to meet? Dealer, Importer, Manufacturer.

I: I do not think it is important whether they come from just as long as there is somebody within the dealership that understands. He needs to be pretty broad-minded or like have all the knowledge in terms of the engineering. More than anything else to understand why we are having these problems.

G: Other services that are a part of aftermarket are Access to technical support and Problem solving, can you elaborate on them?

I: Normally when the warranty period has expired you have sorted out most of those things.

G: What do you think of a system with fixed rates for defined service operations nation-wide?

I: I think it should be.

G: Would you like to have a copy of the report?

I: Yes.

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Interview 2

Interviewee: Brian Kelsey Time: 12:55 – 13:35

Date: 990503 Location: Farmers Transport, Hastings, NZ



I: Yes.



I: Farmers Transport Group.


I: Assistant Manager.


I: We are essentially a rural carrier carrying mostly live stock, farm inputs and products from the farm.


I: We operate from 10 locations, all of the North Island with the exclusion of Taranaki, the King Country, Northern Waikato and the Bay of Plenty and also Auckland north. G: How many trucks do you operate?

I: 130, 44 tonnes rated vehicles.


I: There are 25 leased, 3 owner drivers and about 102 is owned by the company.


I: Only the leased vehicles. Normal warranties apply for newer vehicles.


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I: I think that the definition you used as an example is good.


I: To maximise the economical operation of the vehicles and to maximise their operating life.


I: Quick response to operational difficulties, in some situations there is a need for ongoing research and dialog on certain issues. We had a situation when Volvo sent someone out from Australia about this time last year. We had a problem with some of our rural units which were working in hard terrain and Volvo sent someone out and met with a number of our drivers and from there developed an understanding of driving techniques. That was obviously a benefit to us. We also expect that if there are obvious things/problems that has occurred that the truck manufacturer will communicate that to the vehicle owner, that is quite an important thing.


I: I guess we deal with a few makes of vehicles and it is really inconsistent across all groups. In some areas you may be satisfied and other areas dissatisfied.


I: 1. Quick response to difficulties, 2. Problems communicated, 3. Research/Dialog.

G: The quick response to operational difficulties, can you give an example of how that works for you today?

I: To maximise our utilisation of the vehicles a quick response is crucial. One of the difficulties we have now is that some parts are coming in from overseas and that slows down the response. There is something we contend with on a daily basis.

G: How could it be provided to you in a more effective or efficient way?

I: I guess you could expect truck suppliers to hold vulnerable parts. That would be the most logical way. Or have good connections to Australia if that is where the parts are held. It is only a 3,5 hours flying time away.

G: Then, what about the problem communication, do you have any ideas on how that could be provided in a more effective or efficient way?

I: Probably more in response to specific inquiries I think that the answer could be for the truck manufacturer to send data sheets on a regular basis. Maybe once a quarter, once a year. Today we may receive those things but it is not well organised. Some of our people may have got it but we really do not know. That is why we would like it to happen on a more regular basis.

G: What about the dialog, how do you think that you could improve that?

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I: Several of the truck manufacturers that we operate with have dedicated local servicing organisations and the dialog with those people is quite good. The question could be is the principal communicating to the local service agent and has he got the information to pass on to us.


I: One of the things that we have noticed is the inconsistency in pricing of parts for the same vehicle. I expect if you are a reasonable buyer of parts you could expect to get a consistent price. The coverage is generally quite good. The skill levels of most of the servicing people is reasonably good but as the vehicles become more complex there is probably less that your local mechanics can do.

G: So consistency of pricing and more education in the new features is something that you would like to see more of?

I: Yes.


I: 1. Quick response to difficulties, 2. Consistency of pricing, 3. Problems communicated 4.Technical education, 5. Research/Dialog.

G: Do you have any examples of how consistency of pricing and education of the mechanics could be provided? Obviously it is education for the mechanics but the consistency of pricing?

I: I think that the initiative should come from the truck manufacturer and really what we should see is the truck manufacturer making contracts or arrangements with people who stock their parts, so the initiative should come from them.

G: What about the education of the mechanics, is that something that you would be prepared to pay something extra for?

I: I would like to think that the dealership would show some initiative and offer the mechanics the opportunity to train in their mark. I guess we would be open to some costs associated with that.


I: About 2/3. G: Will the amount of work done in house change in the future?

I: Yes, probably less, since the complexity is increasing.


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I: It is important to have access to a skilled knowledge base. The situation where we had a number of suppliers has worked because they have had a high level of skills. Obviously if you had one supplier you could service all marks and get a high level of skill. That would be an advantage.

G: Is that something that you are looking for currently?

I: We are undertaking a review of our workshop operations currently. This is one of the topics.

G: If you were to find one single supplier, which of the following activities would you like that the single supplier to provide?

I: I would suggest probably all six on the list. (Breakdown, Parts supply, Servicing, Fleet maintenance scheduling, Complete fleet maintenance management, Repair and maintenance contract.)


I: 1. Parts supply, 2. Breakdown services, 3. Servicing, 4. Outsourced services.

G: You rated outsourced services last; does that mean that it is not important at all?

I: It is an issue but I guess the immediacy is in the others.

G: Of the outsourced services, can you rate these different activities in the order of importance?

I: We at the moment have our own outsourced suppliers for these activities so we have already got those things happening. I question that a dealership could actually provide those services as economic as someone contracting direct to the principals.


I: Coverage will always be an issue because the nature of the business that we operate but having said that you expect a high quality of service. I would probably rate coverage highest. If you can not provide the quality you will not last a long time anyway.


I: Yes, it would make sense.


I: Yes it is and you want a proximity to your major workshops.

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I: They supply the parts I doubt that they could supply the vehicle because of our unique vehicle specifications.




I: This is basically if we did not have a workshop, 1. Fully trained mechanic familiar with truck model, 2. Flexible workshop hours, 3. Breakdown service 24 hours a day, 4. Location, 5. Special tools. G: How often would you like to meet a product support representative each year?

I: Probably once a year unless there is something unique.


I: As long as your local dealer is familiar with the product that will suffice. If they were not familiar with the product you would probably need someone with that expertise.

G: What is your impression today, who could provide the level of expertise that you expect?

I: I guess using the Volvo experience we have a local service agent, when he is not comfortable he has brought in people from Titan and once Volvo brought someone across from Australia. That is the appropriate level that we accept.


I: I think these areas are important. Any failure on the vehicle after the warranty period and before their expected end of life is of serious concern. You might be loosing two or three years of productivity from them. I guess the level of using computers and the recording of information will probably enhance the service you get anyway.


I: In principle this is a good idea. There are of course costs connected to the supply of parts and some areas might have to subsidise others clearly some parts you would not expect to be stocked in every location.


I: Yes.

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Interview 3

Interviewee: Matt Purvis Time: 10:50 – 11:25

Date: 990504 Location: Total Transport, Taupo, NZ



I: Yes.

G: Is it OK for me to publish your name in the report? I: it is Ok if you want.


I: Total Transport Ltd.


I: Managing Director.


I: Transport and storage, line-haul, full unit load.


I: All over the North Island. G: How may trucks do you operate?

I: 28.


I: There are 2 leased, 7 owner drivers and 19 is owned by the company.


I: 16 of the owned vehicles.


I: Truck aftermarket… that is the resale of the truck?

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G: The thing that I am thinking more about is “Services provided by truck supplier after the truck is purchased”.

I: That is right, after purchase, yeah. What we are doing is that we are going to the companies and telling them that we want maintenance contracts. We want a cost per kilometre for four years or 600.000km maintenance contracts.


I: We do not operate our own workshop, the thing is that you got all this latest technology that coming in. We can not guarantee that the staff in workshops all around the country can keep up with it so we leave it to the supplier of the truck to make sure that you have the right people to look after it. If you do not look after it and do not do the preventative maintenance it is going to cost you money. We think that they can do a better job than us.


I: The thing is that, it is their product that we buy. If they believe in their product they should be willing to take the risk on the maintenance and this is it. It should not be up to us to take the risk.

G: In this package, what are you looking for?

I: Everything except damage due to negligence on the behalf the driver.


I: Yes.

G: Of the things that you would like to be included, is there anyone that is more important than the other parts?

I: No, it is just that it is a complete package. Everything that keeps the wheels turning round.

G: How could these packages be provided to you in a more effective or efficient way?

I: We have had these in effect for quite some time now and we are happy with what we have got. It is a complete and total package running 24 hours a day, 7 days a week and this is it. The thing is that it is a win-win situation, if they do their job properly it is not going cost them. If that is working we get the use of them keeping the trucks on the road.


I: As far as we are concerned nothing is missing. I can not think of anything else that we would like to be included in the package. The next one we will look at is probably, at the end of the day a lot of companies have moved into this field already, and that is to guarantee a buy-back price of the trucks. The biggest problem facing the industry is what do you do with your gear when it is worn out. I think that it is a problem that faces the industry world-wide. They want to sell new trucks but if they are going to sell new trucks operators have got to be able to get out of their old ones. Recently Freightliner in the States, they have a guaranteed

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buy back price on their major characters of trucks. They are selling those second-hand trucks with a warranty. It has also already been happening in Australia, for example when Linfox moved into the Coca-Cola contract he bought a lot of Mercedeses and they gave him a guaranteed buy-back price after a certain period. So he knew exactly what those trucks were going to cost him. I guess it is everybody’s idea to take market share from their competitors and if they can do that by refurbishing second-hand trucks they will do it.


I: None. G: Will the amount of work done in house change in the future?

I: No, I think that the trend is going the other way.


I: We have three different companies supplying our service and it keeps a it possible to compare them, it keeps up the competition.


I: No.


I: 1. Servicing, 2. Parts supply, 3. Breakdown services, 4. Outsourced services.


I: It is still interesting but under the maintenance contracts it is up to them really do that.

G: So in you case things like air-conditioning, tyres are excluded in the maintenance contracts?

I: Yes, everything.


I: The quality of service. Dealer coverage is not a big issue.


I: Yes it is, location is everything. You must be in the major centres. New Zealand is pretty small, I think that for instance Truck Stops are only 2 hours away in the whole country.

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I: Yes, a one stop shop is what we would like to have.


I: It would sometimes be nice but it is not necessary. The thing is that the quality of the vehicle would have to be high but then again we have wide ranges of configurations so to suit everybody’s needs you would probably have to have a dozen trucks or so. That is a cost to them that is only going to be passed on to the customers.


I: 1. Availability, 2. Price, 3. Choice. The price is important, if the price is to high you would look at a rebuild.


I: 1. Fully trained mechanic familiar with truck model, 2. Flexible workshop hours, 3. Location, 4. Breakdown services 24 hours a day, 5. Special tools. G: How often would you like to meet a product support representative each year?

I: We meet with them on a regular basis anyway, every three months or so and that is enough.


I: We meet with the dealer representative, the manufacturer is not important. We see them all on a regular basis, they call in here.


I: It is not an issue to us since we have our trucks on maintenance contracts. The thing is that we have got a complete peace of mind if something goes wrong.


I: I do not believe in fixed prices. There are some fixed prices now that disadvantages us and advantages the workshop. I believe that in a lot of cases that the transport industry is being ripped off. I have got invoices that proves that. It is a lot of standard times for doing jobs and it might take the apprentice mechanic that long but it will not take a qualified mechanic that long. We have been in the game long enough to know how long it takes to get a job done.

G: Do you think that there is some important issue that I have overlooked?

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I: I think you have covered everything, I can not think of anything more. We have our way of operating without our own workshops and I can not see us changing that.


I: Yes that would be very nice.

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Interview 4

Interviewees: Stephen Peacock, Time: 09:55 – 10:35 Ken Coombs

Date: 990505 Location: Mike Lambert Ltd., Mount Maunganui , NZ

S=Stephen, K=Ken G=Göran Sällvin

G: Have I got your names correct?

S, K: Yes.

G: Is it OK for me to publish your names in the report? S, K: Yes.


K: Mike Lambert Ltd.

G: What is your respective function or title?

S: Service Manager.

K: Purchasing officer.


S: Keeping the trucks available for the dispatches. We are operating within our own company as a service industry.


S: Mostly the central North Island and mainly logging. G: How may trucks do you operate?

S: About 65 at the moment.


S: About 60% are owned by the company and the rest are hire-purchase.


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S: None.

K: We have a few under warranty.


S: For me aftermarket activities is probably availability of parts, service, expertise on the particular brand we are running. If we got problems we need to have people that we can ring that can give us the answers we need as quick as possible. We need the service on time, not the next week or something like that.


S: To offer us support for what we are trying to achieve.

K: Keep the parts supplied.

G: From what you have been saying I gather that the pieces of an effective aftermarket system is parts supply, product support?

S: Yes and another thing is that we have had some problems with component failure. We go to the manufacturer and they say: Strange we have never seen this before. What we have found over a period of time is that six months after we told them they actually come out an say: Yes this is a problem overseas, we have got a problem. What we find is that it is very hard to get component makers to keep us enlightened with problems they have with their products.

G: So communication is also a part of the aftermarket, is there something more that you would like to include?

K: The other thing is that when you got a problem with say the gearbox they do not help you but they say look we have a modification and no body knows about it, no one tells you.


S, K: 1. Parts supply, 2. Product support, 3. Communication.


S: No.

G: Of the things you have mentioned, do you have any example of how they could be provided to you in a more effective or efficient way?

S: For example, we run a lot of loaders and Caterpillar gear and a few other brands as well. A new loader that we bought got an overheating problem. What we find is that the product support are very slow to react. So we got a machine doing a job that we have paid good money for and we expect the machine to be out there doing it. What we find is that with new gear the manufacturer seems to be very slow to react and fixing the problem. It will be done in the end but two, three weeks may even pass before we get there.

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G: What about parts supply, is that something similar?

K: Some of the products that are on the market without any product support or parts.

S: New Zealand seems to be unique, they put a new product on the market but they do not look at the parts and support.


K: It is profit driven rather that service driven today and I think that is a problem.


S: We manage the whole lot but if we get overloaded in our own work shop or whatever, we send it to various workshops. We tend to like to work with the manufacturer of the vehicle of the component that we work with, for example Cummins. If we got problems with a Cummins engine we send it to them and with a Caterpillar it goes to Caterpillar. G: Will the amount of work done in house change in the future?

S: It will probably stay status quo at the moment because the simple fact that when we are using outsourced agents there is always a cost and we can do the repairs cheaper ourselves as big fleet operators. The difference between us and a outside workshop is that we look at the whole machine. We have a slightly different way of looking at it. They also tend to put in new parts all the time while we reuse parts to a greater extent.

G: That means that you are not interested in having one supplier/contact for servicing/breakdown on your entire fleet of trucks?

S: Not one single one, because we find that they loose their competitive edge. Then the service starts to fall off when we use one service supplier.


S: 1. Parts supply, 2. Breakdown services, 3. Servicing, 4. Outsourced services.


S: What we usually find is that if that company can not provide the services we want we just go somewhere else where they can.


S: You need to get a good coverage, but then again you need to have quality. I think that it is the quality that is most important though.

XLVII


K: We sort of rate them ourselves anyway.


S: Yes because things are cut so tight that nobody can afford to have spare trucks.

G: How much would you be prepared to pay for that?

S: I suppose running cost.


K: 1. Availability, 2. Price, 3. Choice.


S: 1. Flexible workshop hours, 2. Breakdown service 24 hours a day, 3. Fully trained mechanic familiar with truck model, 4. Location, 5. Special tools. G: How often would you like to meet a product support representative each year?

K: Probably about every three months.


K: Today we get people from the NZ importers that comes and visits us.

S: From the operational perspective we are not really interested in talking to the shiny arses of the company, we want the guys who know the product and know the problems we can have and what to do to solve it. They also need to know about the operating conditions for us.


S: We need the product support, the manufacturer has to, we need to have confidence in our manufacturer that we can take it there and get it repaired. What we do not want to have is people ringing up and wasting our time. We need people to ring ourselves to talk to about the product. We get advice for free and we expect it to be in that way to.


S: That is good at least for the servicing side.

XLVIII

K: When I buy parts I often find that there are a wide range of prices on them. By being so competitive as they are I can sometimes get a 40% discount on some parts. So a system with fixed prices could be restrictive in that area.


S: Yes.

XLIX

Interview 5

Interviewees: Morgan Dynes, Time: 12:55 – 13:25 Butch Hopcroft, Phil Manson

Date: 990505 Location: TD-Haulage, Mt Maunganui, NZ

M=Morgan G=Göran SällvinB=ButchP=Phil

G: Can I have all your names to make sure that I get them correct?

M, P, B: Morgan Dynes, Butch Hopcroft, Phil Manson.

G: Is it OK for me to publish your names in the report? B, M, P: Yes.


M: TD-Haulage.

G: What is your respective function or title?

B: I am the Transport manager and these two are deputy transport managers. G: What type of business do you operate in?

B: Cartage of bulk materials, with the majority of the work based in forestry.


B: All over the north island.

G: How many trucks do you operate?

B: 24.


B: The company owns them all.

G: Do you have any of these trucks do you have on a repair and maintenance contract?

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B: None.

G: When I say the word truck aftermarket activities what do you think about?

B: You mean the second hand sales and so on?

G: No I was thinking more like services provided by the truck supplier after the truck is purchased.

B: After sales service?

G: Yes, what would you say is the overall objective with aftermarket activities from your point of view?

B: It is a bit different here since TD-Haulage does not buy the trucks in New Zealand. We import them directly from America. We would be the only company in NZ doing that. We therefore do all our own maintenance and back up. We might take help of a local dealer but the majority of the work is done here in our own workshop.

G: With that as a background are you currently looking for a partner that could provide you the service nation wide?

B: No, we will take care of that by ourselves.

G: Which also means that you will keep doing all the maintenance and repairs in you own shop?

M: Yes, we work a lot with preventative maintenance so the idea is that the trucks should not breakdown.


M: They must have the parts or they can not fix anything. These are really all majors, they are all ones. If you have good service you do not need the breakdown service so that is why servicing is more important than breakdown services. Then if a truck breaks down you need it fixed right away. All of these are not relevant for us but if you were an owner-driver the servicing would be really important.1. Parts supply, 2. Servicing, 3. Breakdown services, 4. Outsourced services.

G: We were talking about Outsourced services, can you rate these different activities in order of importance?

M: 1. Tyres changed, 2. Auto Electrical Work, 3. Wheel alignment, 4. Windscreen repaired. 5. Air conditioning repairs.

G: There is a trade off between the number of dealers and the service level that dealers provide simply because of the volume of business that each dealer gets. Which is more important the dealer coverage or the quality of the service each dealer provides?

M: Good quality.

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M: It should be like in America, when you pull up at a truck stop you want to have everything.

B: If I were a owner driver in NZ I would be looking for one thing and that is the servicing and back up, and then I would take the vehicle. I would work out which has got the best service and if my truck stops I want to make one phone call and hear them say help will be there soon. I would also like to have a representative that is my contact and I would tell him that he is the guy that I will call when something goes wrong. No matter what or what time, and it is his job to fix it. It is not necessary for us since we have built up a nest for ourselves that can handle these things.


B: I can give you an example. The other day we had a head on one of our Detroit 60 series engines break and there is not a head available in the whole country. We although had one ourselves, which we got with most parts, but otherwise it would have been a week to get it. Another thing is that with valves, there are six for each cylinder and I thing there are three or something available in the whole country.

M: 1. Availability, 2. Choice, 3. Price.

G: Within the area of service, can you rate these different activities in order of importance to you, in terms of service availability?

M: 1. Breakdown service 24 hours a day, 2. Fully trained mechanic familiar with truck model, 3. Flexible workshop hours, 4. Location, 5. Special tools.

B: A good example of training mechanics is the CAT mechanics. Once you have been trained in the CAT school you can go anywhere in the world and work with CAT engines. They are flown into Christchurch two weeks a year to get training. Sure you do not get the variety, but who wants the variety?

G: We were talking a little bit earlier about product support, how often would you like to meet a product support representative each year?

B: Every quarter.

G: Who of the following would you like to meet? Dealer representative, Importer representative, manufacturer representative.

B: The dealer, it is his job to take the complaints back to the manufacturer.

G: Other services that are part of aftermarket are Access to technical support and Problem solving, can you elaborate on them?

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B: Here again we do all these things ourselves.

G: I was thinking maybe like sometimes you want to make some adjustments on the trucks and you do not know what effect that will have an the other parts.

M: We would naturally call the manufacturer if we for instance would like to increase the engine rate. Can that part be stressed to that level? And you would want answers! But the important thing is that there are somebody trained that can answer your questions and Caterpillar is the only ones that do that kind of training. Training, training and training!Do it right the first time and you will not have to do it again.


M: It would be good since you do not want to pay different prices for the same thing in different parts of the country.

G: Finally, would you like to have a copy of the report?

M: No.

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Interview 6

Interviewee: Brett Findsen Time: 11:15 – 11:55

Date: 990506 Location: Anchor Milk, Morrinsville, NZ



I: Yes, it is spelled Brett Findsen.

G: Is it OK for me to publish your name in the report?

I: Yes.


I: The New Zealand Dairy Group of Companies.


I: Our branch or business unit is called Anchor Milk, which is responsible for milk transportation from the farm VAT to the local factory and I am responsible for the overall maintenance of the milk collection fleet.


I: Milk transportation.


I: We operate from Wellsford, which is north of Auckland, to Taupo with full east-west coverage. We have recently merged with a company on the South Island so we have operations there too now.

G: How many trucks do you operate?

I: We use around 196 milk collection vehicles today. We have more than that, in our total fleet we have 1109 vehicles but that also includes cars, vans and so on.


I: The company owns them all.


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I: None.


I: Is that from the suppliers’ eyes or from my eyes as a buyer?

G: Partly both.

I: Aftermarket activities to me are the service and support that the supplier offers.


I: It should be, so we in the end buy more of that type of truck because the service and the back up they offer.

G: From Anchor milks point of view if you get good aftermarket services…

I: Then it would be low repair and maintenance costs.


I: It should be a working partnership, it should not stop after the truck is sold. The sale of the truck is only a very small part of the relationship. The training, the ongoing support, the service, the parts, the back up and in the end assistance in selling the truck and merging in to the next model.


I: No.

G: Of the activities that you mentioned earlier can you rate them in order of importance?

I: The least important is probably the second hand sale assistance. But overall if you wanted me to rate them I really feel that the service, parts, back up, training is all equal. They are all as important.

G: All of these things can you give me some examples of how they are provided today and how they could be provided in a more effective or efficient way?

I: I am speaking from the past. There have been changes during the last couple of months with some companies that we are dealing with. In the past it seemed to be that we purchased the truck and we were given minimal amount of training and we received back up to a certain extent. It has never ever been a true partnership. It has always been a gap. As soon as the truck is sold, they will wait till next year when we will buy more, hoping again we will buy more of that particular brand.

G: But can you give some hard examples of things that have improved?

I: Well about training, the last company we bought trucks from brought in a guy from Germany to do the training. It is the best training we ever had for mechanics and drivers. We

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have been trying to get this kind of training since 1992; we have got much positive feedback. There is more emphasis now with us trying to drive it. We get a specification of a truck; we know exactly what we want. It has been very hard to get some manufacturers to understand that these are the specifications we want and require because they think differently. But we now have companies that realise that we do know what we are talking about and are more than willing to provide us with the specifications we want. We have also got the dealers to store the parts at our premises at the dealers’ cost and we do not have to pay for them until we use them. It also gives the dealer a better understanding for what we are using all the time. It also helps us here to keep the stock down and when we sell the truck we do not have any extra stock left.


I: Training, back up to the product, service on the product and parts.

G: So, all of the important things are still missing?

I: Yes, they are improving. But to me if I were a buyer myself that would personally buy a truck I would demand far more then what we are getting here at Anchor. To me the back up that the companies are offering are very poor given the amount of trucks we buy each year. I do not think that the suppliers of trucks realise how much emphasis we want to place on those things there. To me they do not work together as a partner. They are the suppliers and we are the users and it is a separation between, not like a working partnership.

G: This gap is that between the sales person and the dealer?

I: It seems like there is a sales person, a service person and a parts person and those three do not communicate from the start. The whole package does not communicate well, and Anchor is as much to blame cause we do not communicate with them, as we should, so the fault is on both sides.


I: Everything other than warranty.


I: It is changing now because we buy newer and newer trucks that are lasting longer better equipment. Our workload since 1992 has decreased so that we have gone from 18 mechanics to 12.

G: But you will continuo to do all the work in your own shops?

I: There has been talk of outsourcing some of the activities, at the moment we are struggling to be competitive with the outside market but when saying that no one knows our trucks like we do. Anyone can repair diesel engines and so on but it is our specialised equipment that not everybody can fix.

G: How important is it for you, if you had the opportunity, to have one supplier/contact for servicing/breakdown on your entire fleet of trucks?

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I: It is very important, I feel that we should have a product support manager person from the company that we purchase the trucks from that specifically deals with us. Not all-different people at different levels, it should be one appointed manager.

G: Would you be interested in having one contact for back up all over the country, no matter what brand of truck?

I: We would just have one phone number to call, for parts or service that would be interesting, yes.

G: Which of the following activities would you like that single supplier to provide?

I: This supplier is a person that is going to co-ordinate or organise this?

G: Yes.

I: If we can not do it ourselves?

G: If you would like that contact to do it, I do not know if it is on your agenda today.

I: It is not at the moment as we have got 40 mechanics spread out in six different locations. We have got it pretty well covered. A single suppler would have to do it probably: Breakdown, Servicing, Repair and maintenance contract and ½ of the fleet maintenance scheduling. I think that if we would go ahead with this it would have to be driven by an Anchor person. As with regards to parts supply we have a good discount so there is nobody that can buy the parts as cheap as we can.


I: 1. Servicing, 2. Parts supply, 3. Outsourced services, 4. Breakdown services. I put breakdown services last because if you do the other things correctly you have very few breakdowns.

G: Of the Outsourced services, can you rate these different activities in the order of importance?

I: Most important if we were outsourcing our work. 1. Tyres changed, 2. Auto electrical work, 3. Wheel alignment, 4. Windscreen repaired, 5. Air conditioning repairs.


I: We are pretty much spread out in our operation, but I would say that the quality is far more important.


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I: Yes, the more information about the work the dealerships can do the better. Because if we have a major failure it is very easy to pick where you are going to send the truck to.


I: Yes to our operation it certainly is. It should be either central or at our key areas of operation.


I: No, because our vehicles are so specialised and we can not expect the dealer to make that investment in a relief vehicle. It would be nice though.


I: 1. Availability, 2. Choice, 3. Price. Price should not really be taken in to account because there is a lot other things you need to look at first. You might not have the choice of which part to use so you will use the part available. As long as the price of the part is less than having a truck standing the price is not as important.


I: If someone was doing our work outside what would we be looking for?

G: Yes.

I: 1. Location, 2. Breakdown service 24 hours a day/Flexible workshop hours, 3. Fully trained mechanic familiar with truck model, 4. Special tools.


I: At least once a month. Anything longer is too long considering the mileage and operations our trucks do.


I: We do not need to meet the truck salesmen, we do not need to meet the boss of the company. It needs to be the parts manager maybe, the national service manager and maybe the warranty claims representative. These are the three key people. They should be directly linked back to the agency or governing body for NZ. We want the people from the top.


I: At the moment we are not getting anything like that from anybody. The supplier does all the warranty work for example Volvo or Mercedes. We get service manuals and that sort of things and we go to some of the training. I do not think there is enough training that they give

LVIII

us. It is both our fault that we do not push hard enough to get the training but it is also the people that are supplying the truck because it is in their interest to give the best knowledge available to maintain and keep you truck. From the suppliers point of view they could sell more trucks, if we get a higher value for our second hand trucks that will lead us to buy new trucks and I think it makes our mechanics a lot more familiar with the truck so that they are not left hanging out there to dry.

G: So you would like the supplier to put your mechanics on a course for a couple of days to learn the basics?

I: Yes. We at anchor are doing a lot of changes and we are demanding a lot more but I think it is in the interest to both the supplier and us. Even though we are a big company we still have to stay competitive; it is the shareholders money at the end of the day.


I: It is as a principle good, but there are so many different variances. It might be OK if you got a truck that is carting goods but when you have a specialised truck unless the supplier can supply all the specialised services in one package if becomes very difficult to price repair and maintenance work to a fixed rate.

G: Do you think that I have overlooked some important area that we have not covered this far?

I: For supplying Tractor units to this company I feel there is a need for a lot more effort to look at the whole picture from start to finish ongoing. Servicing and back up during and after the warranty period must be included more. People have to get in their heads that these days Anchor milk is a competitive business and that there is no longer just a sale, it has got to be this partnership type relationship. You can not just leave the truck with moderate support after the truck is sold. That is what all truck companies apart from one that we deal with today are doing. We have got only one company that we are dealing with that are very professional in their service, back up and aftermarket services, the package we want. Unfortunately we do not buy a lot of trucks of them. Anchor is a company that demands the best possible price. We simply cannot screw everyone for the lowest price available but at the same time demand such high service. I think that there has to be a time when truck dealers have to say, Hey, we are prepared to give you this service but you are not going to be able to screw us so much on the price. You can not get all this without paying a little bit for it.


I: Yes.

LIX

Interview 7

Interviewee: Lewis Clotworthy Time: 08:50 – 09:30

Date: 990507 Location: W. Stevenson & Sons Ltd., Auckland, NZ



I: Yes.



I: W. Stevenson & Sons Ltd.


I: Transport Manager.


I: Raw material manufacturing and construction.


I: The top of the North Island, so from Tapuo and north.

G: How may trucks do you operate?

I: 127.


I: They are all owned by the company.


I: None apart from the warranty work.


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I: Follow up after you purchased a vehicle by the dealer/seller. Service, repairs that are necessary like a warranty work and a continuation of the relationship.


I: To keep the vehicles on the road. Good utilisation of the vehicles, and we need that sort of information to be able to achieve that.


I: We need a reliable vehicle so we need to make sure that the vehicle is well maintained by the servicing dealer. We do a lot of servicing ourselves. We need to know that the vehicle has got a back up parts system.


I: Yes.

G: Which ones do you think is most important of these activities if you had to rate them?

I: They are both very important to us. If a vehicle breaks down you need both the parts supply and the back up to get the vehicle back on the road again. So that we can keep up our utilisation of vehicles up and keep our customers happy.

G: So this means that to the previously mentioned parts supply and maintenance you can ad some kind of back up system?

I: Yes.

G: All of these things that is something that you are provided with today?

I: Yes.

G: Could you give me some example of how this works for you?

I: Basically if we have a breakdown we have an 0800 number. Following that we have the number of the agents repairer who lives in Auckland, we ring him. If the vehicle can not be taken in to them we get him out to look at the vehicle. Then we take it in, do the necessary work and if it is not an urgent job we will leave it to night time. Then we will not have to have the vehicle off the road during the day.

G: Do you have any suggestions of how this could be provided in a more efficient or effective way?

I: We have our own workshops as well. I would say it would be hard for us to say that the servicing and backup that we are getting from our current vehicle suppliers could really be improved on apart from sometimes the availability of parts but I can at the same time understand that you do not want to keep everything on the shelves. It would be mainly a part thing that we have most problems with.

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G: From your point of view it should be more parts on the shelf?

I: Yes.


I: I do not think three is anything missing. All the systems are in place, the 0800 numbers, the contact people and the service they provide is excellent for us.


I: All, except the warranty work.


I: No, I do not think so. We are fitting in such things as our own night time servicing in our own shops and so on. When we got such an expensive facility as we have we need to use it.


I: We got that now. We know exactly where to go with our problems, we basically run two types of trucks. We run the Volvo for the big stuff and we run the Hino for the rest of our operation so we have two contacts in Auckland for our fleet. Both of them are in the same area so the contact points are virtually instant for what we want to do.

G: Is that something that are very important or important?

I: That is important to us because the longer our vehicle breaks down the less utilisation of the vehicle and in the long run we lose customers due to the effect it can have on our customer contracts.

G: Would you be interested in having one single supplier instead of two?

I: Not possibly with the type of vehicles that we are involved with because the one particular supplier does not supply the type of vehicle for the big range and the supplier with the big range has got the gear for the smaller range but it is too expensive.


I: 1. Breakdown services, 2. Parts supply, 3. Outsourced services, 4. Servicing.

G: Of the Outsourced services, can you rate these different activities in the order of importance?

I: 1. Tyres changed, 2. Auto electrical work, 3. Windscreen repaired, 4. Wheel alignment, 5. Air conditioning repairs, 6. Body repairs, 7. Paint work.

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I: Quality of the service provided.


I: I would prefer to use a one stop shop. That is what you should be aiming for. Just to leave the vehicle there, we do that now with cars, you can not get that with trucks at the moment.


I: Yes, the dealer in the part of selling you truck or something like that is not that important, he usually comes to you. For repairs and that sort of thing it is handy to have the dealership close, within a 10-15km radius from our own area but we also work a lot around the area where the dealer we are using now are located so that also has influence on things.


I: No. We usually try to utilise the drives time as to make him help with the repairs or fix other things on the truck at the same time. If we are really busy we hire an outside carrier to get the job done.


I: 1. Availability, 2. Price, 3. Choice. I do not believe in “pirate” parts.


I: 1. Fully trained mechanic familiar with truck model, 2. Breakdown service 24 hours a day, 3. Flexible workshop hours, 4. Location, 5. Availability of parts, 6. Special tools.


I: Monthly, and we do that.


I: The dealer I would say, because he is the one that should have everything at his fingers about product support. He is the one that should get the message through.


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I: If we have an issue with for example an Volvo product, if we have a servicing issue we will ring the Volvo dealer. He is in charge for all the servicing and product support in that area. If we had an issue that we could not solve ourselves he would be our contact.

G: Is that something that you take for granted when you buy a vehicle?

I: Yes, we expect that to happen and it is sometimes included in the price of the vehicle. It is usually a part of the proposal you get when you are considering to buy a new vehicle.

G: Would it be interesting for you to see how much of the price that can be referred to the product support?

I: Yes, I think it would be actually. We have never had it and it is not something that we worry to much about as long as the service is available. When you have your own workshop and things like that it might be one thing that could be optional.


I: We are just doing that ourselves down here right now. It is a damned good idea because you know how much it is going to cost you.

G: Do you think that there are some important issue that I have overlooked or have we covered most things?

I: One thing that you should look at is the time it takes to get a vehicle when you have ordered one. Basically here in New Zealand we have to wait two months for a vehicle and quite often we like to get them earlier. Of course there are all sorts of problems associated with that but it would be nice to have a shorter lead time from the order to delivery. Apart from that we are not a company that likes to have a mixed bag of equipment, we like to have one product of its kind and stick with it which means you get a good relationship. A thing you could consider , which is what we are doing but I do not know what the other companies are doing. We have meetings every two months with the Volvo people in New Zealand. That is with the service manager, the marketing manager and the workshop team and we take turns in hosting the meeting. We just talk through issues that are of concern.


I: Yes.

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Interview 8

Interviewee: John Peat Time: 13:15 – 13:50

Date: 990507 Location: Carr & Haslam Ltd., Auckland, NZ



I: Yes.



I: Carr & Haslam Ltd.


I: Operations Manager.


I: General freight cartage.


I: Mainly in the Auckland city area. G: How may trucks do you operate?

I: About 30.


I: They are all owned by the company.

G: Do you have any of these trucks on a repair and maintenance contract?

I: No we do our own maintenance.


I: I do not know.

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G: With the definition of it as “Services provided by the truck supplier after the truck is purchased”, what is the overall objective of all aftermarket activities from your point of view?

I: Aftermarket or aftersales, especially with new trucks the scheduled servicing, basically as long as the truck is running we do not hear from them. There is just a few calls now and then but basically we have got a fairly good record with the dealership we are working with anyway. During the initial period we have to do maintenance and servicing every 10.000km for warranty purposes. Because the cost associated with all this we do not use the service agent for the franchise, we have our own mechanic that does all this for us.


I: It is not much people can do really in the aftermarket apart from general PR calls. They sell a truck and while it is on the road and going well it is not much they can do. But if the trucks breaks down we need help.


I: On the whole, yes.

G: Can you give an example of how the breakdown service is provided to you today?

I: If one of our trucks were to breakdown now somewhere in Auckland we got our own on call mechanic. We will ring him up and he will drop everything that he is doing and go out to that vehicle, finds out what is wrong with it and sees what needs to be done. He gets the necessary parts from his own contacts and gets the vehicle back on the road. If it is something that he can not fix and it is pretty major then we will ring up the franchise dealer and say, Hey our Mercedes truck has problems, and get the help from them to solve the problem.

G: Do you think there is a way that this could be provided to you in a more effective or efficient way?

I: Just the geographical nature of Auckland I suppose gives that there are only a certain amount of dealerships that can operate. If we are on the other side of Auckland compared to the dealership it can take the mechanic an hour to get there. That is why we have our own mechanic and a couple of others that we can call on if our regular is busy. On the whole we do not have to many problems with getting people out.

G: What do you think is missing in the aftermarket system you use?

I: I think it works pretty well for us right now. The only thing might be some more mobile servicing.


I: We do not have a workshop. Our mechanic has a mobile shop so to speak and he will come in and do most things here in the yard. Anything major he can take it away to another workshop. If it is something really major like the gearbox we will send the truck to the franchise dealer.

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I: No, it is working well for us at the moment.


I: I would not put to much emphasis on it. If you rely on one person or company and they can not deliver you got to have a back-up.

G: So finding one single supplier is not something that you are looking for right now?

I: No.


I: 1. Parts supply, 2. Servicing, 3.Breakdown services, 4. Outsourced services.

G: You rated outsourced services last; does that mean that they are not at all important?

I: No, if we need to get the truck mobile those sort of things are not a priority.

G: If the dealerships could provide those kinds of services, can you rate these different activities in the order of importance?

I: In Auckland most companies like Carr & Haslam has their own contractors for these kind of things. You will find that the franchise dealers will charge $50/hour for repairing a thing that is not a part of the particular truck, it could be a part of the body etc, while a auto electrician charges $30/hour so it really does not come in to the dealership. If the dealer should provide it his margin comes on top of the rest. Most tyre companies in Auckland comes around to the transport companies and provides their services. So this is not something that we would put through a dealership.


I: The quality of the service.


I: Carr & Haslam has a relationship with a particular dealership in Auckland so I am maybe a bit biased to that dealership but I will try to look at the whole picture. If we were going to buy a new truck we were going to look at A, the truck and then look at the service that the supplier can offer. Where is their location in relation to us. Do they have a mobile breakdown service? So we would probably look at what the dealership can offer in terms of service.

LXVII


I: We would not expect it, it would be nice. The problem is that everybody has got different specifications for their trucks so it would be hard. It would be nice to know that the dealership had a basic truck available for us to use for maybe half a day.

G: How much would you be prepared to pay for that service?

I: No more than the normal going rate.


I: 1. Availability, 2. Price, 3. Choice. The important thing is that the part does not cost you more than it costs to have the vehicle standing. We mainly use manufacturers parts for new vehicles and second hand parts for older vehicles.


I: I will put these two together as number one, 1. Breakdown service with a fully trained mechanic 24 hours a day, 2. Flexible workshop hours, 3. Location, 4. Special tools.


I: You do not often meet with product support representatives, you mostly meet with sales people. As long as everything is going on well with all the service and parts supply there is really no need to meet.


I: When we are talking about new vehicles we have the contact with the dealer principal. My boss is in contact with them regularly. You do not get much calls from the opposition companies, Volvo, MACK, Kenworth or something like that. The dealer principal we talk to once a month or almost weekly but the main areas we need to talk to is parts supply and service.


I: Even though the warranty period may have gone out we might be experiencing problems the vehicle. It can be a worrying thing not to know why it is presenting the problem. Now if I can let the dealership know what is going on with our truck they may have some history built up in their own records and they can see relations with other operators and identify problems and maybe also the solutions. It is quite important to us because that has happened to us.


LXVIII

I: it would be good, unfortunately trucks are not like cars so that you can say that one vehicle is like the other one. The differences between trucks would make it difficult to do. Often when the mechanic is for instance changing the oil filter he finds something else so he ends up fixing that as well. It could be coasted out though.


I: Well I think that we have touched on quite a lot of things. A lot of the things would probably receive a different answer from somebody that does not operate only in Auckland.


I: No.

LXIX

Interview 9

Interviewee: Calven Bonney Time: 10:00 – 10:30

Date: 990510 Location: L.W. Bonney & Sons Ltd., Auckland, NZ



I: Yes.



I: L.W. Bonney & Sons Ltd.


I: Managing Director.


I: Bulk transportation.


I: Mostly the North island, based in Auckland. G: How may trucks do you operate?

I: About 40.


I: 36 are owned by the company and 4 are owner-drivers.

G: How many of these trucks on a repair and maintenance contract?

I: None.


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I: I guess it is parts availability and service. It is difficult with our company actually. It is only during the last two years that we had to use any warranty on our trucks. We did not have any warranty claims earlier, we just fixed them ourselves. It took too long time to go through the paper-work and so on.


I: It is instant 24 hours service that we are after and a price that is competitive, otherwise we just have to carry spare trucks.


I: Parts and having good people to talk to. I do not know how they do it but it is difficult for everybody. The right people staying in the right job so that you are talking to the same person all the time. A lot of the things that we got problems with we do not bother ringing up we just fix it ourselves.

G: That is because the communication fails?

I: Yes, or they do not know what they are talking about.

G: So it is both communication and knowledge that you are looking for?

I: That is right, cut the bullshit.

G: So the pieces are parts availability, communication and training basically, is there anything more?

I: Product knowledge, but that is a part of training.


I: Yes, they are not bad.

G: Which ones do you think is most important of these activities if you had to rate them?

I: 1. Parts availability, 2. Training/Product knowledge, 3. Communication.

G: Can you give an example of how the aftermarket system works for you?

I: Difficult really because if we have a truck break down we normally investigate it ourselves and then decide what we are going to do with it. Then we have two or three places that we might send it to get it repaired if we can not do it ourselves. if it is Freightliner or Mercedes we send it out to the dealer if it is major. It is not major we do it ourselves. If it is one of our older trucks and it has to do with the engine or gearbox we send it out to a general maintenance company.

G: Do you have any suggestions of how this could be provided to you in a more effective or efficient way?

LXXI

I: We are pretty good at the moment.


I: Nothing, because the levels of cost. We can not afford to pay any more money for these things.


I: As much as we possible can, about 80%.


I: No, for a while I think we will stick to doing it ourselves.


I: It would work in some fleets but not ours. It would work in a general type fleet that runs the same gear and doing the same work but everything we own is different. You can not find an outside workshop that could look after it.


I: 1. Parts supply, 2. Breakdown services, 3. Servicing, 4. Outsourced services.

G: You rated outsourced services last; does that mean that they are not at all important?

I: We organise it ourselves.


I: Coverage is not much good without quality is it? So quality.


I: Yes.


I: Everybody used to be here but they have been moving out and now anybody that we are dealing with are 10-15km away from here, which is annoying.

G: is that something that you take into account when you are thinking about which trucks you are going to buy?

I: No, we look at it but it would not stop us.

LXXII


I: No, I would not say that I expect it but if it was there I would be thinking of using it. We have got a few dealerships that just gives us trucks anyway.

G: You get to borrow them? Which means that you are not prepared to pay for a service like that?

I: I do not mind paying for it. It is not different from going to the hiring company but when you are taking a truck from the dealership you are making them a favour. The way we have been doing it, it is probably a lot better truck when they get it back after a couple of months. So we do not pay anywhere near the market fee and we fix small things on the trucks instead. And it is also a lot easier for them to sell a truck that people can see is up and working.




I: If you need special tools we would not want to own the truck. 1. Breakdown service 24 hours a day, 2. Fully trained mechanic familiar with truck model, 3. Location, 4. Flexible workshop hours, 5. Special tools.


I: I do not know, you can not go anywhere in this country without bumping into everybody. Usually that is the same person as the salesman. In a way we though meet with other people, you are always talking to people. It is not necessary with regular meetings though.


I: It would be the dealer, if they bring somebody in they will not tell you what the problem is they will just say: Well we have never seen that before.…


I: It is important. With the type of trucks that we buy you can go to three or four different places to get it fixed. There is always someone that can do it. if we want to do any changes in the vehicles we simply find out what we can do or can not do.


LXXIII

I: I think it is a bit hard. It could work for other operators. The problem is that the truck gets serviced by different people all the time so that you do not keep an continuous eye on things. The trucks that we have trouble with are the ones that we do not look after ourselves.


I: It is a hard market. Nobody makes enough money at any stage in the chain so nobody wants to pay for anything. That makes it best for us to do as much as possible ourselves.


I: Yes.

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Interview 10

Interviewee: X Time: 13:35 – 14:10

Date: 990510 Location: Y Ltd., Auckland, NZ

X is the General Manager for Y which is a company that operates in all of New Zealand with general freight and logistics. Y operates about 200 trucks of which they own 130 and lease 70.

To X aftermarket activities means the service after you bought the truck. Things that are included in that are Parts availability, Service and development of new technological ideas. Of those things the availability of parts is most important followed by the servicing and last the development of new technical ideas.

From an overall perspective he thinks that the service that Y gets today could be improved. One thing that could be improved is the stock keeping of parts. Often when you have to order a part from, say Australia, it is both slow and expensive. Y themselves only carry the most basic parts.

Apart from that X do not feel that there are something missing in the aftermarket systems available on the market. The purpose for everybody is off course to make money but if you get the basic needs of parts and service provided a more long term partnership could be of some interest. That is to follow with the changes in the industry.

Today all of the servicing of the leased trucks are included in the contracts mentioned above. On the rest of the Y trucks, 130, the relationship between work done in their own shops and others are approximately 50/50.

The way Y are conducting its operations within these areas are currently under evaluation to see if today’s way is the best one or if one can find a better way. It is though not always important to have one single supplier/contact for the aftermarket services. it is influenced by the geographical differences in New Zealand.

When thinking about dealership services X rates them as follows: 1. Parts supply, 2. Breakdown services, 3. Servicing, 4. Outsourced services. What it regards the outsourced services there are no clear company policy in that area but the two areas that might be of interest for the dealership to arrange for is Air conditioning repairs and Auto electrical work. The other things Y gets provided through other channels and X thinks that the specialists most of the time has a better knowledge and expertise in their own fields.

As what it regards the coverage vs. the quality of the dealerships X finds that it is impossible to provide quality if you do not have the adequate coverage. Both things are still very important. A classification of the dealerships, in terms of what services they provide can be of value to Y.

The location of the dealership is also an important factor in the strive for minimum downtime on the trucks. The location together with a good network for parts is the two vital components.

LXXV

If the dealership could provide a relief vehicle as a service when some major work is done on a truck it would be handy. It could be compared to courtesy car you can have when you car is being serviced.

Within the area of parts supply the availability of parts is the most important followed by the issue of price and lastly the possibility of having a range of parts to choose from. Within the area of service the workshop location is rated highest followed by a fully trained mechanic familiar with truck model, flexible workshop hours, special tools and breakdown service 24 hours a day.

Today Y has a good communication with the product support representatives and it is good to meet with them monthly or when the need arises. The relationship with product support people is something that hopefully will go on also when the warranty has expired.

The creation of a system with fixed prices nation-wide would X perceive as a benefit for the supplier that can provide it.

Finally the most important thing should be to improve the quality of the vehicles so that there are no breakdowns. That in conjunction with a high availability and flexibility is two common factors for a well operating truck fleet and the support of it.

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Interview 11

Interviewee: Grant MacLachlan Time: 08:25 – 08:45

Date: 990512 Location: Tapper Transport, Auckland, NZ



I: Yes.



I: Tapper Transport Ltd.


I: Fleet Engineer.


I: Domestic transport, Warf cartage, Line haul, Specialised tanker products, Dangerous goods and a lot of container type stuff.


I: Mainly in the North Island. G: How may trucks do you operate?

I: About 40.


I: The relationship is about 50/50.


I: The majority of the vehicles.


LXXVII

I: The service and the quality of service.


I: To stand by the product.


I: Service, quality and what we would like to have is a more wide spectrum of people doing service with a 24 hours 7 days a week operation. We have that and we like our supplier to be the same.


I: No.


I: 1. Service, 2. Quality, 3. 24 hours operations.

G: Is these things something that you get provided today and can enjoy the benefits from?

I: No.


I: Companies must realise what the demand is out there. The demand out there is for better service and quality than what is provided.

G: How does it work for you today?

I: We do not have any own workshops so everything is outsourced. We have got about four or five places that we use most of the time but it can be different places all the time.

G: About the quality, is it the same thing there?

I: We do not get really the quality we need.

G: What do you think is the problem?

I: Not enough trained staff. They are not trained with the products that they are dealing with.


I: A better understanding of the product they are selling. Product knowledge is very down for the New Zealand suppliers.


I: It would come as number 4 after the others.

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I: 0%. G: Will the amount of work done in house change in the future?

I: I think it will, if we keep growing the way we are we will probably be forced into our own workshop whether we like it or not. That is for convenience reasons.


I: It would be very important.


I: No, I am not looking for it because it does not exist.

G: If it did exist, which of the following activities would you like that single supplier to provide for you?

I: The whole lot.


I: 1. Servicing, 2. Parts supply, 3. Breakdown services, 4. Outsourced services.


I: It is not that big a issue.


I: The quality of the service.


I: That is pretty much where we are today. Certain dealers provide different services, but one dealer will not provide all of the services. We pretty much got that situation today. It all depends on what is needed and for which vehicle since each vehicle is different so you have to be selective.


I: It is, yes. It is not where I want it at the moment, it is too far.

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I: I would love to have it but it does not exist.

G: If it existed would you be prepared to pay for it?

I: A token amount, yes. It would be hard though, since most of our equipment is specialised, for a dealer to cover that.


I: 1. Availability, 2. Choice, 3. Price.


I: 1. Location, 2. Breakdown service 24 hours a day, 3. Fully trained mechanic familiar with truck model, 4. Flexible workshop hours, 5. Special tools. G: How often would you like to meet a product support representative each year?

I: Maybe twice.


I: Probably the whole three.


I: It is important to us, yes. You have to insist on it when buying a vehicle and I think is should be a part of the parcel of afterservice, a part of a service deal.


I: It should be a fixed rate.

G: Do you think that there is something important that I have overlooked our not covered?

I: You are pretty much on to it.


I: Yes.

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Interview 12

Interviewee: Roy Phillips Time: 09:35 – 10:15

Date: 990512 Location: TCD Ltd.,Auckland, NZ



I: Yes.



I: Temperature Controlled Distribution Ltd.


I: Maintenance & Equipment Manager.


I: Transport business specialising in chilled products.


I: From the top of the North Island to the bottom of the South Island. G: How many trucks do you operate?

I: About 60.


I: We do not own any trucks, 20 are leased and 40 are owner drivers. But even the leased ones are owner drivers.


I: To my knowledge, only the leased ones.


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I: Titan Plant Services, which was Transport commercial Ltd., excellent service. The chap down there Mike Searl does an excellent job. I found him to be very good. I found the response from the office in Wellington to some of my warranty situations tend to be a little bit slow. As far as the servicing side goes up here no problems.


I: To get the truck back to us as quickly as possible without having to return it to them again because they did not have a spare part or they could not get the job finished. Mainly to have the spare parts there to do the job so we do not have to take the truck back.


I: Parts availability, having an operation that is basically 24 hours service so that if we have a problem we can get it sorted out. That basically covers it, 24 hour service and parts availability. Bearing in mind that you will not be able to stock every part, but we have been in situations when they have not had the clutch. They are pretty good though, thy fly them up that day or overnight but it still means that… I suppose you could sum it up with the minimum amount of downtime for the truck as possible.


I: Yes, I mainly deal with Volvo but Isuzu, yes no problems at all.

G: The parts availability and the 24 hours service, can you give an example of how that works for you today?

I: Today Titans operate 24 hour service. Parts availability, I sometimes do get invoices coming through saying that the truck went for service but they could not do this and this because they did not have the parts. That is frustrating because we have to get the truck back. This is for the routine service, for breakdowns there is normally not a problem. The problem is that when it does not gets done at the first time it cat get lost in the system and is forgotten.


I: We try to let them know before the truck goes in there what is wrong with it and I mean it is not a major thing that happens all the time but it is frustrating when it happens. Sometimes we can not really know what the specific problem is. It can be an air leak in the gearbox and they might find that it is a valve and will go: “How do we fix that…and we have not got that bit”. You can not stock everything.


I: There is no services that is missing. Titans try very hard to please and I have not got a negative thing to say about transport commercial or Titan as they are now. They do their very best to help you as a customer. They provide a pick-up and delivery service. It comes back to the transport operator, which is ourselves, to plan the servicing. Sometimes they get a little bit busy so that you can not get the service done that day. We have to go the following day but you know it is no major thing.

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I: 0%, all contracted. G: Will the amount of work done in house change in the future?

I: No, the past experience is the only thing to go from and the previous company I was with we closed down our workshop and gained about $150.000 the first year.

G: How important would it be for you to have one supplier/contact for servicing/breakdown on your entire fleet of trucks?

I: Very important that you deal with one person where you can.

G: Would it also be interesting to have one single supplier for all makes of trucks?

I: No, because I do not think it can be actually practical to be done in New Zealand.


I: No, we try to minimise the amount of trucks we have in the fleet, brands of trucks but as far as having one service provider I am more of a fan that if it is an Kenworth it goes to Kenworth to get repaired and so on. They are the experts like a guy that is doing a Kenworth clutch has probably done that a hundred times so he can get it done in 2 hours. Take it to the Volvo people over here, that has probably never done one, it is going to take 5 hours. A single supplier would be OK if you standardised the fleet and go with one truck only, I think that is what people are talking about. I do not believe that just having one truck in the fleet you get a good broad view of what is out there. We stipulate Volvos, Kenworths, Freightliners, Isuzu at this particular point, whether that changes who knows. That is up to the managing director.


I: 1. Servicing, 2. Breakdown services, 3. Parts supply, 4. Outsourced services.


I: Well, it is but normally what happens is that when I send the truck to Volvo they can do it all themselves anyway. They organises that when they do the service. It is important but I had to rate it somewhere.

G: Of the outsourced services, can you rate these different activities in order of importance?

I: 1. Tyres changed, 2. Auto electrical work, 3. Wheel alignment, 4. Windscreen repaired, 5. Air conditioning repairs.


I: I think the quality of the service.

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I: I want to be able to take my truck to one service provider and he does everything.


I: Yes, I think it is important that the location is central, which is close to the depot.


I: Yes I would endeavour to have that arrangement with the dealer that if we bought a group of say 5 or 6 trucks, that we could have a vehicle provided at a very, very competitive kilometre rate so that we do not loose any downtime trough major truck breakdowns.


I: 1. Availability, 2. Price, 3. Choice. My choice is to use manufacturers parts so you can get the manufacturers guarantee.


I: 1. Fully trained mechanic familiar with truck model, 2. Breakdown service 24 hours a day. 3. Flexible workshop hours, 4. Special tools, 5. Location. G: How often would you like to meet a product support representative each year?

I: I think that if they are interested in selling trucks to us they should be showing their face once every three months.


I: Dealer representative.


I: Basically it is the driver that know his truck and knows if it is not performing well. Then he would talk to Volvo and they would bring their technical support team and check the functions of the truck. The solution could be if the truck is down on horsepower to clean the injectors etc. I do rate it but I think is comes back to servicing, the driver that knows his truck. I do rate it as being important. Because the truck market is so competitive today it is something that should be included when you buy a truck. I think people are looking at the service levels and how they can give you as the customer that little bit extra whether it be pick-up and delivery of the truck. Some of them are going to the point that they give them a clean before you get them. Ok, ultimately you pay for it but it still looks good.

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I: I think that fixed rates is the only way to work. I like to se this happening, it is not at present.


I: No, I think you have done a pretty good job with those questions. I think that the major truck manufacturers are dependent on their dealer networks around the country to keep in contact with the likes of us, but I think it still would not hurt from time to time for the importer to show their faces once every six months or so.


I: Yes.

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Interview 13

Interviewee: Ross Lyttle Time: 14:45 – 15:15

Date: 990512 Location: Owens Road Transport, Auckland, NZ



I: Yes.



I: Owens Road Transport Ltd.


I: Fleet Services Manager.


I: Transport.


I: The whole of New Zealand. G: How many trucks do you operate?

I: About 200.


I: We own about 150 trucks, 25 are leased and 25 are owner drivers.


I: We do not have any of them in contracts.


I: Follow up from the franchise and utilisation of vehicles.

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I: To improve the utilisation of the vehicles to make sure that the trucks meet the requirements of New Zealand in the best way.


I: Service, Repairs, Maintenance, modifications to specifications/requirements and resale of the vehicle.


I: Yes, I suppose so because we usually get what we ask for. We always use the franchise holder for the particular brand since they ought to have the necessary expertise.


I: 1. Service, 2. Repairs, 3. Maintenance, 4. Modifications, 5. Resale of vehicle.

G: All of these things is something that you are provided with today?

I: Yes.


I: I do not know, I have not been involved in it so much so I have not thought about it.


I: You got me there to, because we get what we ask for. It is usually possible to fix the things we are asking for.

G: How much of the maintenance and repairs is done in your own workshops today?

I: None since we do not have any own workshops. We closed them some time ago. We use the franchise holders for the servicing of our vehicles. G: Will the amount of work done in house change in the future?

I: No.


I: It is quite important, especially to be able to asses the services in our widespread operation and do that 24 hours a day.

G: Is the possibility of having one single supplier for all brands of trucks something that would be of any interest to you?

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I: Yes.


I: Yes, it would be something that we could do. We do that for our trailers, of course it is far more complicated with the trucks but it would be interesting.

G: If you could find that single supplier, which of the following activities would you like that supplier to provide?

I: All of the things that you have listed and if they were completely in control of it also tyre management, trailer servicing and C.O.F. (Certificate Of Fitness).


I: 1. Servicing, 2. Breakdown services, 3. Parts supply, 4. Outsourced services. If the servicing is good you probably do not need the other so that is most important then it must be breakdown services if the servicing was not good enough. To provide breakdown services though you need parts supply so that comes next.


I: It came last because it is something outside the dealership and it has the least priotity of the different alternatives.


I: 1. Auto electrical work, 2. Tyres changed, 3. Wheel alignment, 4. Windscreen repaired, 5. Air conditioning repairs.


I: The quality of service.


I: Yes.


I: Yes it is. it should be located along the main routes and be easy to get access to because the time you spend going to and from the dealership is also downtime.


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I: No.


I: 1. Availability, 2. price, 3. Choice.


I: 1. Fully trained mechanic familiar with truck model, 2. Flexible workshop hours, 3. Location, 4. Special tools, 5. Breakdown service 24 hours a day. G: How often would you like to meet a product support representative each year?

I: Probably twice.


I: Dealer representative.


I: It is important, we still need some kind of support to ask about our trucks when there is something that we do not know ourselves.


I: I think it is a good idea.


I: probably not when you melt it all down. We have kriss-crossed over a couple of issues. It is pretty basic, from a transport operators point of view he wants the most out of every vehicle. if you do your servicing right and treats the vehicle correctly it should not be too bad. As I mentioned earlier we always take our vehicles to the franchise holder since they ought to be best equipped for dealing with their own vehicles. They also got knowledge about the vehicle types track record, it may have a certain problem with some parts that keeps coming back and with that knowledge it can be fixed quicker.


I: Yes.

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Interview 14

Interviewee: Peter Weston Time: 10:30 – 11:10

Date: 990514 Location: Caltex NZ Ltd., Wellington, NZ



I: Yes.



I: Caltex New Zealand Ltd. and it is a company owned by Chevron and Texaco. A 50/50 marketing partnership.


I: Manager Distribution.


I: Our business is primarily concerned with the custodianship of the product from our storage, the terminals, to the customers tanks. My role directly is the transportation side of that.


I: The whole of New Zealand. G: How many trucks do you operate?

I: 44 trucks at the moment.


I: We own all of our trucks. G: How many of these trucks do you have on a repair and maintenance contract?

I: None.


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I: If you are looking at the servicing side of it I guess that aftermarket activities are those suppliers that can supply non-branded type of services, services as workshop are the primary. The other side of it is the franchises that can provide you with original parts and so on for your trucks.


I: It is a service industry that should provide us with reliability in our vehicles, reliability is the key. We are though in a niche type of the market with our special vehicles.


I: There are a few things like servicing, parts, workshops and from our point of view specialists that can maintain our unique equipment. Mainly to maintain the tanks on the vehicles, e.g. painting specialists. There is of course also the operating aspect of it with wheels, tyres, cabs the whole lot.


I: Right now I am in the process of analysing all our suppliers from all perspectives. All suppliers will have to submit a profile of each company and the intention is that anyone that supplies to Caltex must be an Caltex approved supplier. That have not been in the past. The relationship has tended to be more historical and there is no real measurement of their effectiveness and I think that a lot of suppliers assume that they have Caltex as a customer. I am not looking for breaking these relationships, more to formalise them.


I: It is hard to rate them because the overall objective is reliability. It comes out of the truck itself actually, the quality of the vehicle and then the servicing factors have to maintain that. So at the end of the day it is the services that maintains the quality of the vehicle that is most important.

G: How are these services provided to you today?

I: They are all outsourced. My function is to have the umbrella role and make sure that the people out in the field have all the services that they need to get the job done.


I: What I am looking for is more national type pricing of the services. A lot of the services are commodity products and of course there is always quality aspects of that. What I am looking to now is more to the value added part of the servicing partner and the mix of service they can provide, A) a quality product and B) meet my requirements in terms of reporting, billing, pricing and things like that. That allows me then to manage this with a great consistency. At the moment we have a multitude of suppliers with a multitude of pricing and we are not sure if we are maximising our purchasing. What I as a manager want to be able to do is to review the suppliers.

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I: What I am finding now has more to do with the technology side of things. That can be for example to provide access to pricing so that I can look up things by my self maybe through the Internet. It is a huge advantage to me to be able to do those kinds of things. Then you are also interested in the possibility of ordering bits and pieces as well.

G: How much of the maintenance and repairs is done in your own workshops today?

I: Nothing since we do not have any workshops.


I: No.


I: I would rate it important rather than very important on the basis that there may be products that the provider can not provide everything. In the ideal it is very important but it has as I mentioned practical implications.


I: That is something that is considered during the analysis of our suppliers today.

G: If you could find that single supplier, which of the following activities would you like that supplier to provide?

I: I would like them to provide all of the examples. The central billing might not be so important, rather a consolidated analysis of our purchases. The ideal would be if I just could go in and see what has been done over the last month. Some kind of real time integration for me to be able to see what is going on. It saves a lot of time, the technology side of things.


I: 1. Breakdown services, 2. Parts supply, 3. Servicing, 4. Outsourced services.


I: 1. Tyres changed, 2. Auto electrical work, 3. Wheel alignment, 4. Windscreen repaired, 5. Dangerous goods competence, 6. Air conditioning repairs.


I: Quality of service.

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I: We expect everything, or at least the same service, to be provided at all the service branches.


I: Yes it is important but it is an ideal.


I: No, they can not for us.


I: 1. Availability, 2. Price, 3 Choice. If the parts is not available I would like to have an recommendation to where I can find the parts, no matter who might have the part or a suggestion of how you could solve the problem it all comes down to the time factor.


I: 1. Fully trained mechanic familiar with truck model, 2. Breakdown service 24 hours a day, 3. Flexible workshop hours, 4. Workshop location, 5. Special tools. I would actually assume that they would have the special tools that is why it rates down. G: How often would you like to meet a product support representative each year?

I: Once or twice, it is more important that I know where they are and that they are available.


I: I would like to meat the importer representative and locally the management would like to meet with the dealership.


I: The way that I want to move now is more to the high relationship. Not necessarily high time but high relationship value where we work together to find solutions. So that I can put to them, this is what I need or require and can you find the solution? If we can not get what we want I want to know what is the compromise. That is critical to the whole arrangement. We also assembles the feedback to our suppliers here and pass that through to the supplier. the dealerships would provide technical expertise and you need to create trust all the way both up and down.


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I: Great.


I: The big thing for Caltex is obviously that we are being requested by our owners to take costs out of the business. The suppliers got to be more tuned that that is what is required of the customer and think how they can help. It would come to be proactively so they come with solutions on their initiative. Be partners to solve our problems. problems we have at the moment tend to be short term and they tend to get a long term perspective. Maybe we need to be short term with Caltex in this way with the long term objective of maintaining the business.


I: Yes.

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Appendix 5

BackgroundThis chapter describing some background facts is one of the shorter ones in the thesis. Still it is important to have some basic knowledge about the market and the conditions for competing there if you want to compare the findings with findings in other markets. Hopefully this chapter will give you, as a reader, a feeling of where to place the rest of the thesis in terms of trying to see the whole picture.

The New Zealand truck marketAt the end of 1997 there were 76,704 non passenger-carrying vehicles licensed to have a gross weight over 3,5 tonnes in New Zealand, referred to as trucks. The distribution of trucks within different weight classes is found in figure 12 below.

Of the 76,704 trucks 50,894 were driven by people whose main line of work had nothing to do with transport, e.g. farmers, contractors, builders and manufacturers. Of the remaining 21,786 trucks 2,625 were used in businesses whose business concept has nothing to do with transportation, e.g. dairy company tankers, fire engines and car carriers. That leaves 18,402 trucks that were used in professional transporting businesses.

Figure 15: Trucks according to weught distribution1

1 Road Transport Facts, p5

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Figure 16: Trucks operated according to line of work2

Of the professional carriers the number of trucks they operate is distributed in the following way:

Figure 17: Professional carriers according to number of trucks.3

The New Zealand truck market is very small and therefore can not always be treated from a total global perspective. The New Zealand truck market account for the sale of about 700-800 trucks per year within the heavy truck segment. That figure has declined a lot over the last years of recession in most Asian economies. Before the recession the truck sales peaked at about 1500-1600 trucks per year in the heavy truck segment.

The transport industry in New Zealand has gone through some very major changes over the last ten years. Ten years ago the transport industry was very heavily regulated. Today there are few regulations except the necessary safety regulations. The road transport sector has a market share of about 80% in the New Zealand transportation market today. The development of the transport sector correlates very much with the economy as a whole4. During 1998 New Zealand had a GDP growth of –0.3% and an upturn is believed to be under way. For the transport operators this will mean more cartage of goods, including forestry slowly.5

2 Road Transport Facts, p113 Road Transport Facts, p124 Friedlander5 Alexander, June 1 1999

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The deregulation has created an even playing field for all actors. The industry has not yet adjusted itself to the deregulations and there are probably more operators in business than the market will feed in the long run. If that is also the case for truck suppliers it is too early to make any forecasts about. The fact is that 24 different manufacturers are represented in one way or the other in the New Zealand market, which is quite unique6. The transport rates have been going down very much so the industry as a whole today is lean and efficient. The primary driving force in the industry is by far cost7. In real terms, the cost of road transport has declined by 50 percent since the deregulation8.

Two more distinct features of the New Zealand truck market are the terrain of the country and the legal- and road user tax (RUC) system. New Zealand is a country with a lot of altitude shifts all over the country. This means that the equipment used in New Zealand often is exposed to extreme conditions in terms of climbing hills and going down hills. The types of roads are not as good as in the major markets in Europe and USA. The term highway has a significant difference in its meaning to a New Zealander and someone from overseas. The RUC system will not be described in detail as that probably is a far bigger job than this thesis but the major implications for truck operators will be mentioned. The maximum weight for a vehicle on the New Zealand roads is 44 tonnes. That weight must be spread out in a certain way among the axles of the vehicle. Basically it is good to have many axles on a tractor-trailer combination. This means that you sometimes can see vehicles with almost abnormally many axles coming down the road. You pay RUC depending on the total weight, the axle pressure and the kilometres that you are travelling the road.9

Since it is a small country/market all the products in the market are very sensitive to the word of mouth; especially if it is something negatively associated with the product. The relative small sales potential makes it difficult to find economically defendable reasons to always keep up with all of the latest corporate policies and product developments.10

6 Stenman7 Whiley B8 Road Transport Facts9 Lyttle10 Whiley M

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