As a boy, Peter Millatt rode his bike down to the local port to see what was going on.
“We lived in Colchester and you could cycle along the quay and talk to the people working there,” he said.
Little did he know that he’d later build a successful business in such a place.
Now managing director of shipping company Scotline, Peter has spent his working life on or near the sea.
His brother joined the New Zealand Shipping Company and Peter decided to follow suit, working in the merchant fleet on bulk carriers for eight years.
When he left the merchant navy, a job in shipping was a natural progression, and he worked across a range of areas; chartering, shipbroking, forwarding and ship management, until 1979 when he and business partner Sandy Catto established Scotline, and decided to make timber a specialism.
“We built the company up slowly from chartering ships to owning ships and owning terminals,” said Peter. “We started off doing small chartering work and were then approached by Södra for a big contract, shipping pulpwood logs from Inverness to Varberg in Sweden. That led to our looking for backward cargoes to Inverness so we started booking timber parcels. That’s when we decided on the name Scotline.”
As requests came in to ship to the Humber and the south of England the company grew, eventually offering services to the whole of the UK and Ireland.
Sandy is based in Inverness and looks after the Scottish operations, while Peter is in Kent and is responsible for the English side of business.
The strategy has continued to be building a solid business steadily. The result is that Scotline now owns a fleet of 10 ships and 27 acres of land over two terminals on the River Medway in Rochester, as well as operating terminals at Gunness and Inverness, and a ship management and chartering operation.
Sandy’s two children, Glenda and Stuart, have been involved in the business for some time, and now Peter’s two sons, Rob and Jon, have also come on board. Jon, who has worked for several shipping companies, including more than two years in Singapore, works on the commercial side, while Rob, an engineer, is responsible for special projects.
The company purchased its first terminal in 1994 – Scotline Terminal Medway. The Transit Medway terminal half a mile down the road became available in 2011. Scotline bought the freehold.
The latter – Scotline Terminal Transit – provides 20,000m2 of undercover storage and the company is now investing to improve other facilities. It has recently built new, timber-clad offices at the terminal entrance, freeing up the old office site near the quay for six silos for bulk cement, the only non-timber cargo the company handles on the site. The next task is to redevelop the terminal.
“When we bought this terminal we had a lot of space, which we needed because the other terminal was completely full and we were turning customers away. Within two years this space was nearly full with new business,” said Peter.
Now Scotline is expanding again, having recently purchased another two acres of quayside land at Transit Medway which will provide more storage for timber.
Scotline has offered a stock holding service for many years and the terminals are packed with stacks of timber.
“It means customers can use our quay facility as their stock yard,” said Peter, adding that for some Swedish mill customers, Scotline provides an electronic stock control system.
“As soon as a load goes out of the gate the details go back to the sawmill in Sweden and that stock is replaced on the next vessel coming in,” he said.
Scotline also offers a pick-a-pack service and stock on the quay is rotated regularly.
True Timber facilities
Although several south-east ports handle timber, Peter regards Scotline’s terminals and the Port of Shoreham, on the south coast, as the only true timber facilities.
“Timber takes a lot of space and that’s the problem. A lot of ports say they can’t get the return on timber for the space it occupies,” he said.
But it is not just the limited timber facilities in the south-east that concerns Scotline, it’s the lack of port facilities full stop. Fifteen years ago there were five wharves on the Medway, but as waterside property has become more desirable the land has been sold for housing.
“Chatham is suffering too,” said Jon “There were three dock basins; now they’re down to one, with the land sold off for development.”
It’s not all bad news, however, as Scotline has helped to fill the gap. It now operates two weekly liner services from Varberg to Rochester, as well as regular sailings to Inverness, Gunness, King’s Lynn and Belfast, Warrenpoint and Wicklow.
The company also fills a gap with its round the clock working.
“One of our main benefits is we work 24/7 and every day except Christmas Day,” said Jon. “In short-sea shipping many ports don’t work weekends which gives us an advantage.
We can set our schedules so the ships load in Varberg and arrive here at the weekend.”
Scotline is always looking for opportunities to enhance its fleet and with two recent purchases it now has 10 vessels. In December it purchased the MV Scot Leader, and in February it expanded the fleet again with the Scot Navigator which is expected to be delivered in May.
All of the ships sail under the Union Jack and, while that adds bureaucracy which ships registered in other countries don’t face, Peter and Jon are proud to fly the British flag.
“There are very few proper British shipowners with British-flagged vessels; Scotline is one of them,” said Peter. Scotline’s growth and success over the past 38 years have been achieved with little reliance on banks – and finance is even harder to secure now as a global oversupply of ships means many companies are going bankrupt and shipping loans are toxic debt for banks. Peter and Sandy have been critical of the banks’ general lack of support for shipping but it does mean Scotline has been in a strong position to weather recessions.
“Not having a great deal of bank support has made it difficult; we’ve had to be financially shrewd but it’s also been a blessing because we haven’t saddled the company with debt,” said Peter.
“Both of us lead modest lifestyles, so we make money, leave it in the company and build a stronger business.”
People have suggested that Scotline could be floated on the stockmarket but Peter has no interest in selling and wants it to remain a “strong family-owned private company”.
“I don’t want to have to worry about shareholders,” he said. “Sandy and I are very hands-on. We get our hands dirty and we try to run a small operation with everyone having close working relationships and no big company bureaucracy. We have control over what we do. We own the asset, we own the terminals, we own the ships.”
Based in the busy south-east, Scotline saw little slow-down during the economic crisis, and Peter and Jon think sterling’s recent fall will have little effect either.
“Swedish wood plays such an important role in the UK building industry that, although prices fluctuate, demand is still there,” said Jon.
“A lot of people in the UK timber trade are saying to us they’re worried about Brexit and the price of timber, but the UK cannot supply the volume of timber that it consumes, so they’re going to have to import,” said Peter. “The price will fluctuate, but such is life.”
Brexit Benefits
While the weaker pound and Brexit may be worrying some importers, Peter believes it will be good for business.
“We’re a British ship owner and most of our costs are in sterling so Brexit is very positive for us,” he said. “With Brexit there’s going to be a lot of upset and I can understand big companies being concerned, but smaller businesses like ours can duck and dive more quickly. For us it’s only positive; it’s going to give us more control.”
Peter also believes Brexit provides an opportunity to improve the climate for business in general.
“If companies are given the right environment with taxes and so on, this country could take over from Europe very easily. It could be a fantastic country for business if the basics were there,” he said.
Although the next generation is now taking an active role in the company, Peter has no intention of retiring.
“Retirement? Probably in about 20 years,” he said. “If I retired I wouldn’t know what to do with myself and I still enjoy the buzz of business.”
In fact, having Rob and Jon on hand to look after more of the day-to-day issues is giving Peter more time to think about the next step for Scotline, which is set to continue to grow.
The current global oversupply of ships means there are opportunities to expand the company fleet and Peter always has an eye out for land.
“If large amounts of land came up for sale we would be interested,” said Peter. “We’re still looking for further expansion, possibly into other commodities, and also developing the shipping side.”
After a 40-year career, Peter would not hesitate to recommend a career in shipping and laments the loss of easy access to ports that fuelled his early interest in the sea.
“It’s very difficult to know how to get young people interested in shipping. Now with security, every port has to be fenced off and there have even been situations where the police have arrested people for taking photos of ships. This is madness.”
The shipping industry’s lower profile over the past few decades also means there’s now a shortage of skilled labour.
“Many of our officers are nearing retirement and for crews our only solution is imported labour,” said Peter.
Going to sea nowadays may not offer the lengthy port stay perks that were normal in Peter’s time, but he still sees a marine job as a good start to a career.
“I’d recommend any young person to go to sea for a few years, get the experience and training because there’s a massive shortage of skills and plenty of jobs ashore for suitable people. And it’s a good life if you’re young and single,” he said.
Peter is excited about the future with several new projects in the pipeline and is expecting 2017 to be another busy year for Scotline.
