Shuttling along nicely

A steep, pothole-peppered learning curve and emergency use of ‘reverse gear’ have featured in Shuttle Buses MD David Granger’s unwaveringly brave drive towards today’s successful and sustainable mid-sized transport enterprise, as he recounted to Ken Mann

A degree in transport management from Loughborough University and experience with a big operator headlined David Granger’s impressive, industry-specific CV 30 years ago. So, what could possibly go wrong when he launched his own bus business – Kilwinning, Ayrshire-based Shuttle Buses – back in a recently deregulated Scotland?

It was late 1989. He and his now deceased business partner Harry Hay were brimming with confidence and expectation with an imminent start to operations after the New Year. Despite their combination of relevant commercial savvy, depot experience and an operators’ licence, at the last minute neither of those upbeat emotions was to be rewarded with shared vision from financial backers. [wlm_nonmember][…]

[/wlm_nonmember] [wlm_ismember]

Shuttle was close to being scuttled before it had even turned a wheel, a bottom line the company was to endure on two more significant occasions as fresh, equally unpredictable obstacles were thrown in its path. More on that in a moment, for this is a Managing Director who hasn’t run away from challenges since operations officially commenced on 2 January, 1990.

In one sense, in this first challenge, they had hit the ground running – with a crash. The circumstances were more prosaic than mere pride preceding a fall. Today, comfortable in his Managing Director’s chair, David is relaxed, even jocular, about the circumstances. “We were going to get Carlyle-bodied Ivecos but right at the last minute everybody that had promised us finance suddenly asked: ‘who are these guys’,” he explained, conceding they had little in the way of supporting credit rating data.

“I thought I had the business acumen, Harry knew the running of a depot. We thought we were a good team, but other people didn’t. About three weeks before we were due to start, a licence secured, driver taken on, jobs quit… we had no vehicles.

“We went to see George Steele at Blythswood Motors (then a PSV dealer in Glasgow) and explained everything to him. He said ‘no problem at all – there’s two Ford Transit Dormobiles, brand spanking new £500 down on each, pay the rest up over five years’ at some eye-watering rate of interest, but he backed us. Without George (now deceased) we wouldn’t be here. Nobody else would touch us with a barge pole,” said David.

Shuttle Buses has a headcount of 54 employees and a current Standard National O-Licence for 50 vehicles, including a 67-plate Mercedes-Benz Turas midi-coach, suggestive of the type of diversification that now underpins what looks set to be a bright future for this family-run business.

You can reasonably conclude that this is a thriving mid-sized independent intent on intelligent growth and canny market assessment, influenced by the gritty determination of its evolutionary back story.

Inspiration

At Loughborough, David was undertaking a sandwich course, allowing a year in industry, which was spent at Tayside Regional Council’s Transport Department in Dundee, then responsible for running the buses in Scotland’s fourth largest city.

That was 1982 through to 1983. The timeline is important for career context; it was his experience in Dundee with a respected manager – Peter Huntley, who was Public Transport Officer and his direct report – that inspired him to continue in the bus transport sector until the decision was made to start out as an independent.

“When I left university, I had a choice of going to work for the Western Scottish Motor Traction Company, as was, in Kilmarnock, or with Bass, the brewers in Burton-on-Trent,” he added. “I preferred moving people to barrels of beer!

“I was a graduate trainee at Western SMT for a year and then, of course, the Scottish Bus Group reorganised. Then I was with Clydeside Scottish and moved to Paisley, which was fantastic experience. We acted as if it was a new company being set up from scratch.

“I did absolutely everything there. They put me through a driving test, and I spent a week on the night shift at Thornliebank, cleaning buses. I spent a night doing chassis washing until about three in the morning. All learning how a bus company runs.” Clydeside also provided his second mentor in the form of George Watson, General Manager.

He returned to Western in 1986 as marketing officer, arriving just days before deregulation. “I plugged away there for three years or so and got friendly with an inspector at the Kilmarnock depot, Harry Hay. We talked about starting our own bus company, then came privatisation for the Scottish Bus Group.”

Opportunity – and a knock

That was the window of opportunity, neither viewing their prospects under the new regime as ideal. But it wouldn’t be long before what David describes as “the biggest single thing to happen in this business,” the second major obstacle, threatened to scupper all plans.
“It came in 1991, when Harry died. My business partner, and the guy who knew about running buses. You can imagine what that meant. We had about seven vehicles by that time and 10 employees.”

Like most businesses in their early years, there was no succession plan. “It was far too soon,” says David. Harry was a bachelor, though his father was still alive and had a claim on his estate. “We came so close to going out of business over those first few years.
“I offered to give my business away to a local operator, because we couldn’t see any way out of it. He declined, I’m pleased to say. My parents backed me through the early days, fortunately.”

Any small and medium-sized business is exposed to the usual ups and downs of free market economics, and Shuttle Buses is no exception, something David looks back upon as “character building.”

He advises in matter of fact tones: “We’ve been through some expansions and contractions.” He’s refreshingly candid about each scenario.

Ups and downs

“We expanded up to 1997, then that year I sold the bulk of the business to Stagecoach at the same time as they took over A1 and AA (historic operators in the same part of Ayrshire), and sold another portion to them in 2008.”

Opportunistic? Not entirely. He reflects: “The first time we ran out of money. For the first eight years we were, financially, a disaster. We thought we knew everything about running buses… we knew nothing. We budgeted the first year to make £26,000. We lost £26,000.
“It’s incredibly easy to lose vast amounts of money running buses. And it’s very difficult to make tiny amounts of money. We basically came to the end of the road. We had routes, so we went to Stagecoach and we did a deal.

“We had expanded at quite a rate in the first seven years – an uncontrolled rate to a great extent – so we kept more of a grip on it after the first sell out. We diversified. We were mainly a local bus service operator up to 1997 but after that, we still grew a network of local bus routes, but far more in the way of subsidised (contracts) from SPT.”

SPT, or the Scottish Government-created Strathclyde Partnership for Transport, is the largest of Scotland’s seven regional transport partnerships. Its immediate predecessor, 1996 to 2006, was Strathclyde Passenger Transport Authority (SPTA).

“We took on a lot more school contracts than we had before,” David continued. “We started doing more private hire. We grew the private hire side deliberately and started doing MyBus routes (SPT’s bookable, door-to-door midi-bus service), which we hadn’t before, so we tried to diversify away from commercial local bus operation.”

A glance at Shuttle Buses’ current schedule of ongoing work reveals nine school contracts, five busy subsided routes and nine vehicles occupied in SPT-subsidised MyBus services across North, East and South Ayrshire, five of these buses owned by SPT. Three other fully commercial, high ridership routes are operated.

Broader platform

Armed with that broader business platform as a blueprint, and the core income of bus-related services, subtly different branding for two distinct portions has emerged with the addition of a full coach offering, marketed via two separate websites.

“It’s all under the one licence but we have two trading identities,” the MD explains. “There is Shuttle Buses – which does local bus routes, MyBus, school contracts – but three years ago we took the decision to try and move a bit more upmarket in the private hire side.
“The local bus service side is obviously the same thing, day in, day out. It’s relatively straightforward but it’s very low margin.

“Coaching is totally different. In June you could have 30 coaches out on the road every day doing school trips. In November, there might be absolutely nothing. A totally different kettle of fish – but higher margins. We took a conscious decision to rebrand that part of the business and spend some money on nice private hire coaches. We’re middle market.”

Distinctive service

Developing the Shuttle Coaches division is the responsibility of David’s son, Ross. He quotes for all classifications of coach duties, with everything from a standard 16-seater through to a 15m, tri-axle Volvo Plaxton Panther with 73 seats. Yet this is not simply a ‘me too’ offer in Shuttle’s geographic marketplace. There is differentiation, as David was keen to point out.

“We’ve got 16-seaters – though it’s difficult to get good money for them because there are so many one-man bands out there – right up to a 73-seater which is the biggest, and we’ve got everything in between,” he stated.

“That’s where we score. Because the traditional coach operator runs 53 seaters. We’ve got absolutely everything. We do as much with the 33-seaters as we do with our 53-seaters.”

There is no continental element to the operations schedule, nor any planned in the immediate future. “If I move on, Ross might have a different view,” David remarks, with a wry smile on his face.

Ross, a director of the company alongside David’s wife Dorothy and father Don, is working at an adjacent desk when the words are spoken. David adds to his advisory note with phrases like: “I like my buses to be tucked up; the vast bulk of what we do is out and back in the day,” and: “We know what we’re good at and we focus on that.”

As Ross turns around to join the conversation, one thing that is immediate is the clarity of Granger Junior’s understanding about how coaching can add further growth to the bottom line without taking away any of the necessary focus on the bus activity, which is expected to continue as the core revenue earner.

It was undoubtedly Ross’s persuasive business case that led to the purchase of that Mercedes-Benz 921L Turas after attending the Birmingham Coach & Bus UK show in 2017. As a 67-plate, it’s not the newest vehicle in the fleet; that honour goes to another Mercedes-Benz, an 18-plate Sprinter sporting Mellor Strata LF body, for a recently awarded rural bus route.

It isn’t long before Ross uncovers one of his key areas of interest – and why it is useful to know the cost of the average UK wedding celebration and the service purchasing psychology that underpins its dynamics.

Wedding market

Weddings are big business; reception venue, catering – and coaches. “It’s an enormous market,” Ross indicated. “It used to be Saturdays in June, July, August. We now get a lot of mid-week work.”

Boiled down, a wedding venue can’t just be in use once a week, just as coaches must earn their keep more than once a week. “Volume in the wedding market definitely peaks in the summer months but it’s fair to say it’s consistent throughout the year,” Ross continued. “Even in January we get a fair number.”

David obviously supports his son’s inroads to the upper middle point of that market, and with good reason. If you’re wondering, an eye-watering £27,000 is the average cost of typical nuptials. It isn’t the cost that creates the interest but the willingness of customers to look for overall value, as opposed to cheapest price.

David interjected: “If people know they are going to get a good quality service, then they don’t care what it costs them.” Underscoring the importance of a quality service, an impressive vehicle and repeat business, Ross completes the proposition thus: “It’s about reputation. We are demonstrating what we can provide to an usher or bridesmaid when they get married. We’ve found ourselves being mentioned in wedding forums online as a good place to get coaches.”

In 2015, coaching represented 10% of total revenues. Today, that has grown to 16%; some very palatable icing on the financial fruit cake.
Other coaching work includes football supporter clubs, hen and stag night bookings. Of the former, Ross said: “They know us – and we know them,” a reference to the respect each has for the other’s business and an assurance in what can be an otherwise unsavoury element of UK private hire.

Fleet favourites

The fleet might be described as eclectic at its fringes but essentially is comprised of Optare Solos in the bus operations, all but one using the Mercedes-Benz/Allison engine/transmission pairing. The oldest Solo is a 2004 model and has 600,000 miles on its original engine. There is a sprinkling of Fiat and VW chassis joining for some of the SPT contracts.

On the coach side, Volvo is the chief chassis choice for the large class, Mercedes-Benz for midi (including Varios), reflecting a popular purchase dichotomy across Britain. King Long makes a double appearance, on a 63-plate and a 14-plate, as does MAN, the brace of German chassis coming with Beulas bodywork on 11-plates.

On a classic note, a 1994 Dennis Javelin and two Volvo B10M (1993 and 1995) both with Caetano bodies, and a Plaxton-bodied 1979 AEC Reliance are available for hire. The latter is particularly suited to those wedding bookings when something old and borrowed, albeit for a price, is required.

Now delicensed but remaining proud fleet members are a 1985 Leyland Tiger Alexander and G831 RDS, one of the original Transits that helped get things rolling. Its fleet number, 831, neatly reflects its registration and Shuttle Buses’ small beginnings. Nearly all maintenance is done by the in-house workshop.

Driver ambassadors

Today, coach and bus drivers are expected to be ambassadors for their employers, front of house staff responsible for that first positive impression. Hiring the right people – and retaining them – is critical for small and medium businesses.

“The driver situation, as a whole (across the UK), is difficult,” David admits. “But we pay quite a good rate here and because we operate such a diverse range of services, we can fit the personality to the job.

“We like to start people as part-timers, although that’s not always possible. Only when a driver is in the job for a few weeks do you really get a feel of them.

“People, when they join us, either tend to move on fairly quickly – within six months, or they’ll stay with us virtually forever. You can tell early on who will fit and who will not.”

Sitting behind the wheel, he has 33 full-time staff and eight part-time, all apparently happy to keep shuttling.

---

The five-year old Solo – with a month’s miles under its wheels

Shuttle Buses recently bought a rather unusual used Optare Solo to add to its fleet, definitely a bus with the proverbial one careful owner.

“We acquired it because we’ve taken on two new services recently,” explains David. “It’s running on a tender service between Crosshouse Hospital (near Kilmarnock) and Irvine.

“We heard from Optare that this particular vehicle was coming to the end of its lease at Aberdeen Heliport, where it was used as an airside bus and as a spare vehicle backing up an ADL Enviro200.

“It is now coming up on five years old and it has a grand total of 9,800 miles on the clock…which we will do in about a month. It was too good an opportunity to turn down!”

[/wlm_ismember]