A peninsula made for pallet networks 20


If ever a region was designed for a pallet network, it is the Iberian Peninsula. One of its two capitals, Madrid, sits squarely in the centre of the country. A good, modern road system ensures that even the outlying regions are within nine hours of the centre, so a 24- hour service can be routinely


achieved. With traffic growing by around


20% a year currently, Palletways Iberia’s member numbers are expected to increase to 65- 66 by May next year “but our target is to double in size within 4-5 years, at which point the optimum number of members


will be around 75-80,” explains managing director, Gregorio Hernando. Palletways can however


already cover the whole Iberian Peninsula, including the Canaries and Balearic islands, and offer a 24-hour service throughout – the service option chosen by 94% of


Island life suits Ital Logistics


Groupage specialist Ital Logistics has Iberia covered, says route manager for the region, James Mears. From a standing start in 2005, when it decided to replicate its Italian flagship service, this part of the business has grown to around 2,500 trucks movements per year. Not only does the company


cover the whole of mainland Spain


and Portugal, but the


offshore islands and autonomous territories too. “It is in fact our fastest-growing


market,” James Mears says. There is little sign, as far as Ital Logistics is concerned, of the recession that


gripped the Spanish and


Portuguese economies a few years ago, Mears attests. “In fact, the more stringent economic circumstances may have helped our cause because it prompted many shippers to move away from full loads to groupage.” The core of ITAL’s Spanish


services are the regular departures from the UK to Barcelona (three times a week guaranteed), Madrid, Valencia and Southern Spain, and Irun/Zaragoza (all at least twice-weekly), with similar levels of service in the return direction. However, from February this year it has been operating a daily service to Barcelona. “There is no sign of slowing down,” says James Mears. There is also a weekly dual temperature-controlled service from Manchester. From being the unknown


new kid on the block (thanks to its strong association with Italy), Ital Logistics now has Spanish operators queuing up to be its partners, says Mears. In Barcelona, it has signed up Novocargo, one of the country’s leading transport and logistics operators. In Madrid, the partner is international specialist MZ Logistic, which operates from a 20,000sq ſt warehouse in Coslada. In Irun and Valencia it has teamed up with Grupo Moldtrans which has ten offices covering not only the Iberian Peninsula but also Las Palmas and Gran Canarias.


These partners provide a


comprehensive redistribution service throughout Spain, but anything over three pallets tends to be delivered direct, says James Mears. Another Ital speciality is


dangerous goods, he adds. The company is becoming increasingly well known as one of the few operators that will carry this type of cargo. This association can, however, be somewhat of a double-edged sword in that companies think that this is all ITAL does. In fact, it also has frequent non-ADR services, suitable for cargoes that cannot be mixed with dangerous goods, such as food or pharmaceuticals. One feature of


the Iberian


market are its offshore islands and autonomous territories. Most operators either ignore these or serve them slightly grudgingly but Ital likes to make a feature of the fact that it does cover pretty much every one of them. Some of them are integral political parts of Spain and members of the EU. Tenerife, as with all other islands of the Canaries is not in the EU and requires customs formalities - but Balearic Islands are EU members. Another, fully independent,


country is the mountain enclave of Andorra, sandwiched between France and Spain, which Ital also serves. “This is definitely a niche area, and it’s quite complex” says James Mears. “Only UK or Spanish drivers are allowed to enter and you can’t use other EU nationals. Furthermore, all the goods on the trailer have to be bound for


Andorra.” Melilla and Ceuta are offshore


enclaves of Spain on what is otherwise Moroccan territory. Freight for these destinations is sent via Madrid and consolidated so that it can be sent out by container. There is also Gibraltar, which


may be physically linked to the Spanish coast by a causeway but is, famously, a British Overseas Territory and occasional source of friction between the London and Madrid governments. In general, freight flows reasonably smoothly to Gibraltar most of the time, says James Mears, although without the specific knowledge and experience, there are many pitfalls which an unsuspecting carrier could fall into resulting in considerable financial implication and delays. Ital Logistics is also one of the few operators to offer an ADR service to the territory, with a twice-weekly service. The Portuguese market is


served by minimum twice-weekly departures to Lisbon and Oporto where partners are SDV and Moldtrans, respectively. Portugal also has offshore


islands – Madeira and the Azores. These are quite lengthy sea voyages away from Lisbon. Customs formalities are relatively simple – a commercial invoice is all that is needed, though as vehicles and containers usually have to come back empty, freight costs are quite high. Sometimes customers ask why no VAT has been charged – it’s because they are outside the EU.


customers. Gregorio Hernando points


out that the network will be ten years old next May, making it one of the more mature Continental European operations. The market and network has evolved to 62 members and handles around 3,000 pallets a day, 80% of them through Palletways’ Iberia’s main hub in Madrid and most of the remainder through its secondary hub at Zaragoza. Membership


is a major


commitment, Gregorio Hernando recognises. “Becoming a member is certainly not for free. Because of the long distances, linehaul is quite a significant cost.” Palletways


is not generally


the members’ main business, although for many it is the fastest growing; they range from full and less than truckload operators to companies whose main business is parcels. “Last year, we renewed all


Issue 7 2015 - Freight Business Journal


///IBERIA


international counts for most.” The biggest international markets for Palletways Iberia are France, Germany, the UK and Italy. The pallet market is of course


our contracts with our


members, which I think is a sign of success,” points out Hernando. Most of Palletways Iberia’s


business is within the Iberian Peninsula (Spain and Portugal) itself, though traffic to and from the rest of Europe is growing faster than the average, at around 30% a year. “It is growing more quickly,” Hernando confirms,


“and while


it remains a relatively minor part of our business, if you compare Palletways with the other networks, we are the one where


less mature in Spain and Portugal than in the UK, where the concept was first launched around 30 years ago, but there is still plenty of competition. As well as three dedicated pallet networks there are general freight operators and, especially during the recent crisis years, some of the parcels carriers have also tried to break into the pallet and heavier freight market, says Hernando. “Some of them have gone for pallet business very aggressively,” he says. While economists say that


the recession in Spain and Portugal has passed, it doesn’t necessarily seem like that for many


of Palletways Iberia’s


members, Hernando continues. “In the macroeconomic sense, the situation may have improved but for small businesses, who are most of our members, the recession is still not over. Volumes are picking up, but clients have become very sensitive to price.”


Palletways has though


benefited from a move away from full truckloads to smaller orders, which became apparent at the start of the recession in 2008. In fact, Palletways “has always had a growth history”, helped by the fact that it was a new concept and the first to offer a genuinely nationwide 24-hour service in the region, Hernando believes. More sub-hubs will be added


as part of the plan to double the business and push daily volume towards the 6,000 mark. “Zaragoza is just the start; I think there will be hubs in south, the north west and, in the longer term, the Mediterranean corridor. But we will need the additional volumes first,” states Hernando. Existing hubs will also be


enlarged, with a doubling of Madrid’s capacity and increasing Zaragoza from 5-600 pallets a day capacity to around 800 a day. New technology is also in place,


thanks to the Palletways Group’s Vision 20-20 system; the issue is more about getting operators and Palletways’ Iberia’s mainly small customers to use it more.


Seventh office for Iberia specialist


Iberian specialist PSL Group


opened its seventh UK office near Milton Keynes in June, reports commercial director, Richard Gibbs. Meanwhile, its agent of over 30 years, Garland Transitos in Portugal, also recently increased its logistics capacity of its Lisbon and Oporto Terminals by 47,000sq m and has increased its in their forwarding services throughout Europe, including UK.


terminal


Construction of a 1,000sq m in


Marinha Grande


(midway between Lisbon and Oporto) has led to the emergence of a direct traffic into the UK. Richard Gibbs adds: “The PSL


Group has seen a 10% volume growth in its Iberian traffic in the past 12 months which is evidence that the market is climbing out of


recession.” He adds that Portuguese


textile exports have benefited from the political and economic problems that some of the emerging markets have had, such as Turkey, Egypt and Ukraine. Furthermore the weakening of the Chinese export economy has led to companies returning to traditional short haul routes such as Portugal and the weak Euro has also meant cheaper imports.


Spain’s economy too is finally starting to see some light at the end of the tunnel and so access to Spanish hauliers is becoming easier which allows a free flow of trade in both directions without too many restrictions. Richard Gibbs concludes:


“We can only see continued improvement in the region as long as there are no other global economical factors to knock the local economies off course.”


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