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Issue 1 2014 Freight Business Journal


///PALLET NETWORKS Serving Europe up on a pallet


In the beginning, there were the domestic pallet networks – arguably one of the innovative ideas to come out of the UK logistics industries in the past two decades. Now, an increasing number of them are developing similar concepts in other European countries, and some of the more ambitious are even exploring pan-European operation. At the same time, some of the traditional freight operators have hit back with their own take on the pallet system concept.


Palletways: All roads lead to Europe


There is no let-up in the growth of Palletways’ international business, says Europe managing director, Rachael Alpha. Speaking in late 2013, she said that international volume growth was up 23% year on year, but there had been peak monthly growth figures of up to 47%. “It’s significant growth that is exceeding market expectations,”


sophisticated level of technology to the freighting process than some traditional freight operators, Alpha says, including online tracking and tracing and even proofs of delivery (PoDs) via mobile phones. Pallet networks are also very strong on the last-kilometre delivery compared with much of the competition, says Alpha. The UK’s international traffic has


come back particularly strongly, she adds, especially to Germany, France and Spain. Looking forward, Rachael Alpha is optimistic too about prospects in the Netherlands. As might be expected, although


Palletways is still increasing its international business in the year to date, growth has been a little more muted in some of the more recession-hit markets such as Spain and Italy. The UK has done well, Alpha believes, thanks to the high level


and Zaragoza. Looking slightly


further ahead, new countries will be added to the network including the Nordic region, Switzerland, Austria and further places in Eastern Europe – the Czech and Slovak Republics are the latest additions to the Palletways portfolio, in September. “They’re going very well,” Rachael Alpha says of the two latest additions to the network. “The market


there is used to


pricing in kilos so per-pallet pricing was a relatively new concept.” Nevertheless, daily import and export volumes “are now growing nicely” - so much so that other Eastern European countries are being actively considered, including Poland. The Nordics could be served,


at least initially, via a hub in northern Germany and already the


international linehaul into


Denmark is being upgraded from 2-3 times per week to daily from 13 January. The region – which would also include Finland as well as Scandinavia - is a large geography, so a partnership might be the way forward. Ultimately, the plan is for


there to be a Palletways in every European country and, who knows, the concept one day could be extended even further afield. “The model is flexible enough to cope with different conditions in different countries,” Rachael Alpha states.


Healthy business for Ireland’s Ace


she told FBJ. “And we expect growth to continue into the second quarter of next year at well above 20%, while maintaining margins.” Shippers everywhere are for more frequent


pushing


deliveries of smaller volumes and it is this market that the pallet networks have been tapping into. Their business though has come from a wide range of sources, Alpha believes, including parcels companies, freight forwarders, traditional groupage operators – plus a fair amount of organic growth too. Palletways can bring a more


of awareness of the benefits of using pallet networks. “The UK is our most mature domestic network


and it responds


quickly to enhancements in the International offering.” Business has been helped by the addition of new pallet types and additional countries served, while a new daily line haul route taking in Spain, France, Germany and the UK has cut some journey times, as has the addition of a southern UK hub in the London area. More regional hubs will be added in the next six months including Milan


The intra-Ireland pallet market may be small, but there are up to four players in a market “that is really only big enough for two,” in the opinion of Ace Express commercial director, Mark Tracey. In truth, none of the domestic Irish pallet operators would be viable without UK and international volume; Ace, with its Pall-Ex connection does half of its business with the UK and the vast majority of its active accounts have some UK or international element. Dublin-based Ace Express


Freight was established in 1989 and provides freight import and export services to companies that trade to and from Ireland. In conjunction with its global partners Hellmann


Worldwide Logistics, it provides road sea and airfreight services worldwide with a network of over 450 offices in 156 countries. Other networks in Ireland


include TPN, Pallet Express and JMC. Commercial director Mark


Tracey explained that Ace Express is not only the exclusive agent in Ireland for the UK-based Pall-Ex network, but it also operates its own pallet network within Ireland, based on a hub near Dublin. Even what appears to be


domestic Irish traffic is oſten the final leg of a journey that has taken the goods from a foreign origin, through a warehouse in Ireland, to the final point of


consumption. The main users of pallet services within Ireland are wholesalers or distributors to, for example, the equivalent of Pound shops or hardware stores. Ace even delivers pallet-loads of expensive Canadian-produced hay for thoroughbred racehorses – ordinary horses have to make do with the cheaper stuff delivered by the lorryload. There is


relatively little


outbound pallet traffic from Ireland to the UK or overseas, adds Tracey. Ireland is a big exporter, but much of what it sends abroad is either computer soſtware, biotech or pharma products or big-bulk agricultural products. The former two categories oſten have low or


even zero physical volume or, in the case of agri bulks, are big enough to fill complete containers or even whole ships and again have little need of a pallet delivery service. “Take milk powder, one of Ireland’s biggest exports,” says Tracey. “Most of it goes in containers direct to destination overseas.” Ace Express enjoyed a good


year in 2013, with business up by around 20%, though Tracey acknowledges that that is in part due to others’ misfortune as other hauliers have collapsed or gone out of business. However, there are signs that the underlying economy is picking up although margins remain very tight and the market ultra-competitive.


Palletforce to start UK/Germany service


UK pallet network Palletforce will start a service to Germany in conjunction with its German network partner Online Systemlogistik on 3 February. The service will carry the


branding of Allnet, an alliance of European networks of which Palletforce is a member and also including Palet System in France, One Express in Italy and Online Systemlogistik in Germany. Palletforce chief executive,


Michael Conroy said: “It is very exciting to see our strategy for European expansion continuing to progress as we introduce our third new Continental


service


within the past 12 months. This new market leading German service is a fantastic addition to our European offering and will


further strengthen our position as the UK and Europe’s leading palletised distribution network. “Adding this quality, value


service also gives our existing UK members universal access to the best and fastest services, giving them more opportunities to expand and attract new business.” The UK/German service operate through


will direct


connections between hubs in Burton and Schlitz with a 48 hour door-to-door delivery time. All deliveries made using the German service will be tracked by Palletforce’s ‘Alliance’ IT system, Alliance, and its ePOD electronic proof of delivery. Palletforce has already introduced direct services to Benelux and Italy in the past year.


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