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Issue 1 2014 Freight Business Journal Pall-Ex goes Continental


With five Continental networks in operation – Italy, Iberia, France, Poland and Romania – there is no let-up in Pall-Ex’s expansion, says managing director Adrian Russell. “This year, we’re spreading ourselves wide in our discussions and we hope we will reel in one or two more within the next two months,” he told FBJ in an interview in early December.


because those networks have different geographical strengths and weaknesses or have different freight profiles.” But there has also been some


interest in the pallet network concept outside Europe, Russell adds. “We have been approached by people in the UAE, Malaysia and South Africa, which does demonstrate the exportability of the concept.” While there are not necessarily any active discussions going on outside Europe, there is no reason why the concept couldn’t work anywhere where there is a viable cargo base, a usable road network and the right market conditions, including a fragmented existing road haulage sector. The idea was even suggested as


Discussions are going on


with prospective partners in Scandinavia, the Benelux and even Turkey, for example. All geographies have their


quirks. Benelux might seem an obvious choice to set up a network, being so close to the UK and with a lot of freight passing through it, but is actually quite challenging, Russell points out; there is in fact relatively little of the type of freight suitable for a pallet system. Talks in Turkey have been going


on for a long time, and a (very) short list of potential partners created. “We’re also talking to a serious


contender in Germany,” Russell adds. “Here, we might have to adopt a slightly different model (instead of a master licensee and partner- hauliers) and look at maybe a joint venture or a shareholding in an existing network. Germany is a very mature market and there are major differences. For instance, there are lots of regional hauliers and also it’s quite common for hauliers to be members of more than one network, possibly


a possible solution for Tanzania’s transport problems by UK Secretary of State for International Development (and former Transport Secretary) Justine Greening on a recent visit to East Africa. It would be a way of helping oſten very small and under- capitalised local haulage firms work together, though a lot of other aspects of the country’s transport infrastructure would have to be put right before a network could operate effectively. Pall-Ex does of course need


to guard against spreading its resources too thinly, and for the moment it is concentrating on developing in Europe, where


there is quite a narrow window of opportunity before competitors get established, Russell considers. Any operation further afield would also probably have to be a joint venture to ensure that it could be managed properly. That the concept is even been


talked about in these far-flung locations is an illustration of how far the pallet network concept has come since the first networks started in the UK in the early 1990s. In those days, haulage companies “had a very insular and suspicious attitude.” However, the parcels operators then showed what was possible in terms of setting up a national network and the concept has gradually caught on, to the extent that “the days of the stand-along general haulier in the UK are probably over. Everyone has to be in a network nowadays, though not necessarily as their core activity.” The network concept could


be developed still further, either domestically in the UK or abroad, to encompass specialist services such as domestic deliveries or even temperature-controlled transport. Russell recently witnessed a demonstration of a palletised fridge and while there issues to deal with, notably how to reposition empty equipment, it’s an interesting concept. And already there are two networks dedicated to handling pallets of hazardous cargo.


///PALLET NETWORKS DSV does the daily


In just over six months since its official launch in May 2013, DSV’s Daily Pallet pan-European service has blossomed into a 39-country network stretching from Norway to Spain and from Ireland to Turkey. It’s certainly quite an achievement to create such an ambitious system from scratch, so much so that DSV has been nominated as a finalist in the European Logistics Award at the BIFA Freight Service Awards 2013. Volume growth


encouraging, too, says


has been director


of sales and marketing at DSV Road, Chris Malyon, and business has been particularly brisk from the UK, where the concept of pallet networks is already well understood. But the Daily Pallet system is a pan-European product, linking every country in the network via a central hub in Schweiberdingen near Stuttgart in Germany. “We’ve certainly seen some


decent growth,” Malyon states. “Of course, the UK is well used to the concept whereas it is still a bit alien in a lot of European countries. ” But generally, uptake is good and sales staff are enthusiastic. Traffic on the network has grown by over 250% since launch.


DSV did its market research


and found that its customers wanted daily services if possible, with online booking, predictable schedules, pre-alerts and easy track and trace – almost a blueprint for DSV’s new offering. Daily Pallet comes into its own on


routes where the regular groupage services are not themselves daily. From the UK, for example, DSV’s regular road groupage services already run every weekday to Scandinavia, Benelux,


France


and Germany, but less frequently to Spain or Eastern Europe. Daily Pallet however makes it possible to offer departure on the ‘missing’ days for palletised consignments of up to 3.5 tonnes. It helps strengthen links between smaller markets and gives a level of uniformity to DSV’s service in Europe. From the UK, Daily Pallet has proved particularly popular to Austria,


the Czech


Republic, Poland and Switzerland. It was a bold move, Malyon


acknowledges. While other pallet operators have sought to replicate the UK pallet network in other countries, no one had tried to create a pan-European network before, at least not on this scale. Also, unlike most other pallet networks, DSV operates Daily Pallet


using its own resources rather than relying on partners or agents. “The fact that we use our own vehicles throughout the network ensures a high level of performance” Malyon explains. The service is being further


refined, to include pre-alerts that advise customers if a delivery is likely to be outside the expected delivery window. Future improvements may include direct trunk services from regional hubs rather than via London and, possibly,


the addition of more


European hubs to complement the existing one in Stuttgart. While the latter is unlikely to run out of capacity in the foreseeable future, adding more options would allow an even better service to be offered. But could Daily Pallet ever be


a victim of its own success, if it boosts demand on a specific trade lane to the extent that the existing groupage service can be stepped up to a daily operation? Chris Malyon doesn’t see this as being an issue, because there is still a certain distinction between the two types of service. Daily Pallet offers more precise delivery times, it offers pre-alerts – not just track and trace – and it works to a different, matrix- based tariff.


All change at Palletline


Major UK network Palletline says it is “entering a major transition phase that is likely to completely redefine the business and how it is perceived by its customers and the wider industry.” Managing director, Kevin


Buchanan, explains: “Palletline has undertaken a major business review and is currently finalising plans to launch significant changes to its service offering in 2014. The business will be building on existing strengths and new opportunities to increase its competitive advantage and increase market share.” “It’s important to realise that


Palletline is first and foremost a network. We are made up of 68 members across 78 locations, with more than 6,000 vehicles and hundreds of thousands of sq ſt in storage space – a combined size that rivals some of the biggest UK logistics operators. There is a considerable amount of value and expertise, not to mention assets and infrastructure, shared across the business. To us it’s a natural step to begin by leveraging what we already have to create something


entirely new.” But Buchanan affirms Palletline


will never lose its core values and original commitment to cost- effective distribution.


sustainable business model. That’s what our ‘Less Is More’ service is all about.” New members include Kent


based Castledene Transport, and Nottingham haulier H Beardsley. The network is investing heavily


in new infrastructure, including a new LED lighting system to enhance safety at the main Starley Way, Birmingham hub. New faces include Martin Rantle,


The network recently celebrated


its ten year anniversary of working with a major supermarket chain; the introduction of the ‘Less Is More’ campaign last year continues to bring significant productivity improvements and cost reductions. “The benefits of consolidated


delivery speak for themselves,” says Kevin Buchanan. “Imagine all your suppliers working together to share the load – and reduce the cost. Now combine that with consistent quality, efficiency and a


sales and marketing director and Maria Holmes-Keeling, marketing manager who now head up a bolstered marketing department. Iain Brown has taken the helm


as operations director, alongside Steve Butler, head of network services and Roger Merrison as depot manager for Palletline London. Debbie Wyatt also joins as HR manager. “The new team – along with


potential new premises – is all about putting in place the foundation that will enable us to shape our future and sustain the robust


performance throughout


2014 and beyond,” confirms Buchanan.


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