20


Issue 1 2017 - Freight Business Journal


///PALLETS


Brexit no barrier to growth


Conceived as a UK domestic


business around two decades ago, many of the country’s pallet networks now see Europe as a main engine for growth – Brexit or not.


Putting steel into the Palletforce network


The steelwork was going up for Palletforce’s giant new hub in Burton on Trent in early December, heralding the next stage in the network operator’s expansion. New owner, Hong Kong investment firm EmergeVest has, since taking over in September, announced plans for a £50m new SuperHub, the biggest of its kind in Europe, to be built alongside the existing facility. However, this is only one of the


changes being wrought by the new owners. EmergeVest is also pumping millions into a new IT and track and trace system for Palletforce, and the pallet network has also taken the step of acquiring two of its own operators – London- based Freightmaster and QTR in Greenham Common near Thatcham, to the west of the capital. Palletforce chief executive,


Michael Conroy says that the acquisitions were in line with his strategy of having the best possible members and also, in places where good hauliers are scarce, securing its capacity. With the change of ownership,


he is now planning ahead for the next 5-10 years. The new superhub is the first, and most obvious


manifestation of that future strategy. “Land became available next to our site in Burton. The new hub will be a combined 700,000sq ſt and will have a 30,000 pallet per night capacity – but bear in mind that, last night we did 16,000 pallets and we average around 14,000 a night.” So new capacity


is much needed to keep pace with


anticipated future growth. The pallet network sector as a whole is still growing - if you’ve bought or consumed anything lately, there’s a very good chance that it will have passed through one or other of the operator’s hubs at some point in the supply chain and pallet networks have become an essential tool in modern retailing. “People have realised that, with


guaranteed delivery – ordering up to 9pm and having it delivered the next day - they can push inventory further up the supply chain,” states Conroy. Much of Palletforce’s future


growth will be UK domestic, of course, but there are also some very intriguing prospects for international business. It hasn’t escaped Conroy’s notice that


among the other companies in the EmergeVest stable is CS Cargo, a China-based freight


forwarder.


Also, Heath Zarin the Palletforce chairman from EmergeVest, is also the chairman of UK-based forwarder Allport. Conroy points out: “One of our


key drivers in responding to the EmergeVest interest in the first place was their knowledge of the Chinese marketplace and particularly their interest in introducing the network distribution model into the Chinese transport system”. With a Palletforce director now based in Shanghai the business is already involved in concept planning and examining the benefits to the Palletforce domestic business in gaining a foothold in a country that has huge and growing exports to the UK. There is no reason why, at some


point in the future, Palletforce members should not be able to draw on the international arms of the EmergeVest service and offer their customers a wide range of options, in addition to UK domestic pallet distribution. “I see Palletforce as an enabler,


connecting its members to their offerings and allowing them to compete with the global guys” says Conroy. “We want to enable our members to win an advantage in handling the vast array of imports


from the Far East. Brexit can only boost the possibilities of trade deals outside of Europe.” Traditionally, international has


been a relatively minor part of the pallet networks’ business but it is now the fastest-growing part of Palletforce , he says. Europe will remain a key focus


of the business and Palletforce is also a member of the Allnet alliance of networks in Europe, which share common platforms and IT systems, all aimed at making it “as easy to send a pallet to Munich as to Manchester,” as Conroy says. Allnet is set for major expansion


next year, he says, including a move into eastern Europe, building on the platform established in its four founder countries of the UK, Italy, France and Germany. Conroy sees the East as key to growth of the international business, to countries such as Poland but even as far afield as Ukraine. Palletforce’s international


business is already bigger than many people might imagine – perhaps around 1,000 pallets a night. Not all countries in Europe have their own networks yet, but many are interested in developing the model and Palletforce can already offer a service between the UK and around 20 European nations. Until fairly recently, the international business in some


cases has been something that happened almost by default, but now there is a conscious desire to develop it further. Many of Palletforce’s UK members too are keen on developing both their European and overseas business, he adds, pointing out that recent acquisition QTR is strategically sited on the main road to Southampton. For Palletforce, Conroy believes that Brexit will encourage growth of the wider trade potential between Europe and the Far East and that the UK will have the chance to play the key role. “We’re really going to start


pushing international and we will appoint a specific director,” Conroy adds. Conroy’s background is


in express parcels and here international was seen as a given among many operators, right from the concept’s inception. He is convinced that Brexit will


only encourage the prospects for international business. “Yes, there is some uncertainty”, he admits. “But the geography doesn’t change and 65 million UK consumers is a critical market that the EU can’t turn its back on. “We may be leaving the


European Union, but we’re not leaving Europe. People will still want to trade with us. Brexit may be a challenge, but we want to take


a wider view and look at the new opportunities it will bring.” Another possibility Conroy is


looking at is a specific service for consumers. Quite a number of pallet deliveries these days are to private addresses rather than businesses and these do bring challenges - maybe a two-man service or some other means of


helping private individuals


take delivery of oſten heavy and unwieldy goods. The fact that Palletforce is


already working on a network solution for China and looking at taking advantage of their new exposure to the wider Asian economies is an exciting outlook for the business, Conroy adds. “China is a vast country” he


says and what he envisages might happen is that a network of local village trucks carrying anything produced


or consumed there


operating into a local central point and traffic being relayed to and from regional centres both internally and to the ports. “It’s certainly something we will


give out support to. We could offer a ‘hub in a box’ allowing them to liſt our technology and use it. And our owners do see it as an opportunity - one thing China does have are good roads, so it is certainly feasible. And it would be nice to see a British invention adopted there.”


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