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Issue 2 2012 Faster to Germany


Palletways has started a fast door-to-door delivery service to and from Germany as part of its international expansion plans. The Premium+ service delivers


palletised freight direct between the two countries in 48 hours via the company’s recently established


hub in Homberg – compared with 72 hours via its hub in Nijmegen, Holland. Export consignments are


collected across the UK and sent to Palletways’ hub in Lichfield, near Birmingham from where they are transported direct to Homberg,


where they are sorted for onward distribution to their final delivery points. Managing director of Palletways


Europe GmbH, Tim Joernsen, said the new service was part of a wider strategy to grow the company’s international business, which has increased significantly year-on- year.


Managing director of Palletways UK, Martyn Young, adds: “This service offers both our UK member companies and customers the opportunity to open up new business prospects in the fastest growing market in Europe. It also further underlines our commitment to be the leading


international pallet delivery network.” The new service is managed


by Palletways Europe GmbH, the company set up in 2006 to develop pan-European collection and distribution services across all


the Palletways network,


supported by its pan-European IT infrastructure. Palletways, founded in the UK


in 1994 now has 300 depots and ten hubs and provides collection and distribution services in 11 European countries: Belgium, Denmark, France, Germany, Italy, Luxembourg, Netherlands, Portugal, Republic of Ireland, Spain and the UK.


Dachser provides the vital link


Pallet networks are an important source of traffic for German-owned logistics operator Dachser in the UK. In fact, says UK managing director Nick Lowe, the company is currently the UK partner of not one but two of the country’s major network – not because of any deliberate plan but as a result of Dachser’s purchase of Rochdale- based Leach Distribution around a couple of years ago. Leach is a member of the Palletline network, whereas Dachser, through its depots in Northampton and Dartford is part of the UK Pallets system. Ultimately, the two-network will


conundrum have to be


resolved, but meanwhile it is very much business as usual as far as Dachser’s pallet customers are concerned, says Nick Lowe. “Continuity for customers must come


first,” he explains. “We


certainly didn’t buy Leach because they were in Palletline, but our focus has to be on serving all our customers and we have obligations to both networks.” Being part of a pallet network is


an excellent way of expanding a logistics company or forwarder’s footprint in the UK. International freight operators, by their nature, tend to be concentrated at the major international nodes and being part of a pallet network is a way of extending pick up and delivery capability to all parts of the country. “Our stated objective is to grow in the UK, but clearly we’re not going to develop 30-plus branches overnight, so being part of a reliable network is going to be a


requirement for us”, says Lowe. Dachser brings an excellent European network, with


daily


departures to some countries. And pallet business to and from Europe is growing quite strongly, despite the recession, says Nick Lowe. The question of how the pallet should expand their


networks


European business is an interesting one, Nick Lowe continues. It could be a matter of growing business between the UK and other countries or, possibly, replicating the UK domestic networks in other countries. Doing this in some places could be difficult, though, he points out. “In some countries, you have much greater distances than in the UK and there may already be established competitors which, while not pallet networks on the UK model, already offer a similar service. In Germany for example (Dachser’s


‘home’ country) you


have networks that are operated on a partner to partner basis.” Meanwhile, Dachser gets a fair


stream of European business to or from other UK Pallet members. This is routed via UK Pallets’ Birmingham hub and then to Dachser’s Northampton hub (or vice versa for imports). “We’ve seen some good growth in Europe lately,” Lowe continues. “Business was up 30% in 2011 over 2010. Some large customers increased their volumes and we also increased our market share. I don’t think the market itself has grown as much as we have, but it has been helped by the devaluation of the Pound against the Euro. Yes, the Eurozone has its problems, but the


Pall-Ex is now searching for a partner in Turkey to help it set up a palletised freight distribution network within


the country. It


would follow the model that has already been established in other countries. Along with the established Pall-Ex Italia network, last year saw the launch of Pall-Ex Iberia and Pall-Ex Romania, the first pallet network in Eastern Europe. Pall-Ex said it was looking for “a


well respected logistics player in that region, financially stable, with the same ethos as Pall-Ex Group and with the vision to work with the Group to build a pan-European freight network.” The partner selected will


Pound is still 15% weaker against the Euro than it was and that’s helped UK exports – so there’s still a big opportunity for this country – which is still within the top half- dozen manufacturing economies.” As well as goods actually made in this country, the UK is still a major assembly point for goods made elsewhere, which may be reworked, have added value services performed on them or consolidated with other cargo before being shipped to Europe. And while the UK Government’s export promotion efforts have tended to target far-flung places like Asia or the Americas, it should never be forgotten that Europe is still by far the UK’s most important trading partner. “We mustn’t write Europe off,” Lowe emphasises. Exports are good news for


Dachser because it means that it can backload inbound trailers from the Continent. For its European work, it uses a variation of the massive double-


deck trailers used by many of the domestic pallet operators that fit within the lower height limits but which, thanks to a moveable bar system, can still allow one pallet to be carried above another, without crushing the one underneath. “A lot of pallets are not necessarily that high and because we can move the bars up and down, we have a lot of flexibility.” New pan-European height


regulations, that the Freight Transport Association and others fear could be imposed in the UK, might bring an end to such flexibility though if they were brought in, they would not presumably apply to existing trailers. That said, “there is a lot of lobbying going on” and many in the industry hope that the proposals will never see the light of day. Certainly, it seems rather perverse to restrict truck heights while at the same time other elements in Brussels are pushing for trailer lengths to be increased.


be responsible for recruiting a network of members (as in the UK, Iberia, Italy and Romania) that must cover the whole of Turkey. The network model would follow a regional approach, and would work in exactly the same as in the UK although, given the size of the country there may be two hubs as in the UK or Italy. European project director says


Anand Assi that Turkey


would have a lot in common with the Romanian network: “Our principal aim is to create the first Pan-European palletised freight network, but we inevitably have ambitions beyond that too. Turkey not only has domestic products like textiles and minerals requiring domestic and Pan-European distribution but it is an increasingly important transit route.” Turkey sits astride the Eurasian transport corridor that connects Western Europe to Southeast Asia and its location, as with Romania, makes an ideal transit trade hub between the two continents. It also has the benefit of linking to the Mediterranean and to Northern Africa. “Turkey is a key location as we seek to expand beyond Europe,” Assi explains. He adds: “We are searching for a Turkish logistics partner


to introduce an innovative new concept to the existing market and lead our operations. In each location we’ve


launched,


national distribution costs for manufacturers, importers and distributors have been considerably lowered, as their goods have not required dedicated transport


for each area, so this


represents a real opportunity.” Pall-Ex’s hub and spoke model


involves each member collecting freight from customers and delivering it to a centrally located hub where it is sorted and loaded onto the vehicle of the network member responsible for the destination postcode.


“we are hoping to


present a viable alternative to existing logistics operations to help drive down costs throughout the supply chain”


Assi concludes: “In Romania,


we found that the ability to offer consistent and cost-effective express overnight distribution was something that was a major attraction, and having extensively researched the Turkish market, we believe that this will be equally attractive to many industries in Turkey too, with the textiles sector being a clear example. At a time when many economies are unstable, we are hoping to present a viable alternative to existing logistics operations to help drive down costs


throughout the supply


chain.” As part of its continuing


expansion plans, Pall-Ex is also currently seeking partners in Germany, Poland, Scandinavia and beyond.


///PALLETS Talking Turkey


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