Established in 1992, the Palletline pallet distribution network was specifically created to enable customers to transport small palletised consignments or part vehicle loads of freight across the UK and Ireland, cost effectively and on time. As the world’s first hub and spoke delivery network for palletised freight, Palletline has consistently led the industry with groundbreaking innovations that have helped provide consistent high quality distribution services. Then as now, the Palletline network is totally owned by its members, all leading road transport operators in their regions across the UK and Ireland. These members provide the collection and delivery services, as well as owning the central and regional hubs. This ownership structure means all Palletline member companies have a share in both the network business and the operation, and as a result are all equally committed to ensuring quality of service is paramount at all times.
The company’s quality ethos is supported by continuous investment in people, infrastructure, IT and equipment to ensure Palletline remains at the leading edge of development of pallet distribution best practice. This commitment to continuous improvement means 2008 is set to be another outstanding year for Palletline, as Kevin Buchanan, Palletline’s Managing Director, explained to Warehouse & Logistics News.
Warehouse & Logistics News – First question: How do you sum up the Palletline concept?
We’re a unique commercial co-operative, facilitating the cost-effective movement of small consignments for our members and their customers. We handle standard-sized pallets, but our internal rules permit extra headroom and width, and we’re the only UK network not to go down the discounted route. We feel that is one reason why Palletline enjoys lower damage ratios.
WLN – What sorts of goods go through the network?
We serve hugely diverse markets, including drinks, pharmaceutical, retail and manufacturing, with products as varied as machine parts, computers and even pallets of eggs. There’s no maximum pallet value but there is a protocol of insurance and members sharing risk. We avoid hazardous freight, but we have a commercial involvement with the Hazchem Network.
WLN – What’s the benefit to end customers of using Palletline as opposed to national 3PLs?
We offer national coverage at low cost: it’s increasingly difficult for 3PLs to achieve overnight service to every UK postcode with their own vehicles.
WLN – Who set Palletline up originally?
The founder members include Expect Distribution of Halifax, Hacklings of Gloucestershire, Collins Road Services Group, Middlesex and Caisters Transport, Lincolnshire. They are all still involved, and some are represented on our Board of Directors: Expect has the largest freight input into our network, and recently won the Motor Transport Haulier of the Year Award.
WLN – How many members are there?
We have 53 current members, including regional heroes like the four I mentioned, and national operations like Roadferry, Gregory’s and Stillers. More than 30 have been members for over ten years. Unlike most other networks, we’ve experienced very little membership change over the 15 years, with only 7 companies leaving.
We have 68 member depots, with over 4,000 vehicles, and move 8,500-9,500 pallets per 24 hours. We also have two regional hubs, set up to save the financial and environmental cost of trunking unnecessary distances.
Attracting new members has never been a problem; we turn down more members than we enlist, and are more selective than other networks. Our members tend to be bigger, covering larger territories and more financially secure.
WLN – What performance standards must members meet?
Our performance standards are set out in the members’ charter, including livery, operating performance and financial status. We monitor operating performance throughout our network and identify where improvements are needed.
In addition, in January we introduced the industry’s first independent annual members audit through the FTA, another Palletline first. By end February we will have audited the entire network.
WLN – Are you looking for more members?
We’re always looking for new members with the right financial and operational stability and cultural compatibility. We’re particularly strengthening our network in London and the Southeast; because of congestion problems smaller delivery territories are necessary. 22% of our freight is delivered there.
WLN – What groundbreaking innovations has Palletline achieved over the years?
Our hub and spoke concept was groundbreaking when we started 15 years ago, and we’ve continued innovating since. A recent first is our development of regional hubs in Greenford, London, run by our subsidiary company Palletline London, and Preston, Lancashire, operated by Roadferry. These locations mean freight only comes to our Birmingham central hub when necessary. It’s a greener, cheaper way of working. We were also the first pallet network offering members a web-based track and trace service, in place for over five years.
We recently became the first pallet network accredited to the new OHSAS 18001 ISO health and safety standard, and one of the first UK companies certified to the new 2007 version.
WLN – What difference will OHSAS 18001 make?
The new standard takes the potential risk out of working with pallet networks, and enforces rigorous thinking about the freight process. It affects the entire management process, not just health and safety, and makes us safer, with clearer management processes, of a very high standard.
WLN – Any more innovations planned for 2008?
In 2008 we’re introducing electronic signature capture at point of delivery. Other networks capture data on the cheap or with small, hand-held PDA’s: our members have gone for higher spec, more robust kit costing around £1,000 per unit. We don’t insist on IT vendor selection, but set options and minimum standards.
WLN – Legally, what type of organisation is Palletline?
Palletline is a limited market PLC, 100% owned by the members, who buy shares after six months’ probation. No member can own over 9.75%.
WLN – What is the central Palletline organisation?
We have a three-person executive team: Mark Pulford, Operations Director, Ruth Moor, Finance Director and me as MD, all permanent employees, supported by a senior management team. Our executive board comprises us and up to seven elected member directors, serving three years.
WLN – Who are the day-to-day management?
Troy Bailey is General Manager, Operations, Colin Enticott, General Manager Network Services, and Helen Dickinson is General Manager IT and Admin.
WLN – When did you become MD?
I joined Palletline in January 2007 as General Manager Commercial Development and became MD in May 2007, replacing Glyn Jones, who now runs Luton Airport. I was previously Business Development director with TWT in South Wales. They are prominent members of another network, which is how I learnt about Palletline and its high service standards.
WLN – How do you summarise your role as MD?
I develop the strategy and the detailed business plans to ensure the Palletline membership can maximise the trading benefits of belonging to our network.
WLN – How do you develop policy with the members, and how much say do they have?
Members are elected to the board, which meets every month. We have quarterly members’ meetings and report back on strategy. We also have quarterly regional meetings, giving members access to the board.
I spend a lot of time listening and taking on members’ views. We’re consultative and considerate to individuals, but strong in our commitment to the overall network.
WLN – What financial return do members get?
Members get an annual dividend on their shareholding. Being a commercial cooperative we’re about maximising members’ returns rather than our own, and our hub fees and other charges are typically lower than other networks.
WLN – How does Palletline compare in how it operates, versus other UK pallet networks?
We have a unique ownership culture, with members’ successful trading as top priority: we’re obsessed with service, not volume. Moving 8,500-9,000 pallets per night provides a very comfortable trading return. In recent years the industry has become oversubscribed with pallet networks and customers have become sceptical of some aspects of pallet network services: our focus is to be the best, not the biggest.
WLN – How fast is your throughput growing?
We grew 8% from July 2006 to June 2007 and we’re running at 7% this year. It’s all member growth, not high volume, low margin, centralised accounts.
WLN – What geographical areas do you cover?
We cover mainland UK and Northern and southern Ireland. We currently offer service through one member into Europe: we aim to provide a more extended European service during 2008, and will make an announcement during the year.
WLN – What are the specific customer benefits of sending pallets via Palletline?
We are cost-effective and experienced. We offer online booking facilities; pallet delivery labels are printed locally, keeping end users in control; we offer flexible service options; online shipment track and trace; and online POD.
WLN – Do you offer a palletised transport service for one-off customers?
Yes, we do: last May we launched a new online service, Palletlineonline, aimed at small businesses and consumers. This runs through our local member network, with payment by credit card, and offers a door-to-door service moving anything that goes on a pallet, from sit-on lawnmowers to computer parts. There’s full information on the Palletlineonline website, including guidance on wrapping items correctly. As small businesses’ usage grows, we advise them about our other services.
WLN – What requirements must end customers’ palletised freight meet, to be acceptable in the network?
Freight must be on pallets, securely fixed, appropriately wrapped and clearly labeled. Special requirements must be pre-advised.
WLN – How do you ‘sell’ Palletline to end customers?
We market Palletline through the relevant industry sector press, with articles like this and regional stories on individual members’ success. We meet members’ customers on request, including when they’re pitching for new business, but we don’t have a central sales operation targeting end users.
WLN – Are individual members’ vehicles branded Palletline?
Yes – we have uniform livery standards set down in the Members’ charter, and it’s one of the items we’re policing in our members’ audit.
WLN – Do you offer track and trace at pallet level or item level? When do pallets become ‘visible’?
We offer track and trace at pallet level. Pallets are visible the moment they are scanned at members’ depots; they are scanned again moving into and out of the hub, and coming off the delivery trunk and onto the final delivery vehicle. From April 2008 we’re also capturing deliveries with a final electronic signature, with a GPS location and time stamp.
WLN – Can members’ customers see where their pallets are, on-line?
Yes, customers can get web access if they sign up to the service via their local member.
WLN – What are the different service options?
We offer a next day service and 48 hours economy service. Some members also offer 72 hours services and added value deliveries, either timed or set AM/PM. Our surcharges for ‘specials’ are typically lower and more simplistic than other networks.
WLN – How have these service options changed to reflect market needs?
There’s been no dramatic change over time to our basic concept of next day and economy service. The advance is improved visibility of freight through better technology.
WLN – Looking forward, are you involved in lobbying government about such important matters as road pricing, and congestion charging?
As Palletline PLC, we’re not involved in lobbying, but we do get asked our opinion and to contribute academically. We talk to Transport for London from time to time and do our best to explain that only part of the Southeast’s congestion is caused by commercial vehicles and argue for more constructive congestion controls such as increased use of dedicated regional delivery centres and night deliveries.
WLN – What do you consider the most important external factors that are likely to impact on demand for pallet networks?
The main ones are green or congestion issues, and fuel costs. We’re not just talking about congestion, we’re taking action: one of our members, Foulger Transport, is in a pilot scheme with Norwich City Council, running a designated consolidation centre in which one pallet company becomes the designated haulier into the city centre.
For transport companies and customers fuel costs are so excessive that consignments cannot be driven around the UK by one courier; you need to find other ways to do it. It’s why pallet networks came into being in the first place.
WLN – 2007 saw the launch of the Association of Pallet Networks. Are Palletline involved?
Yes, we’re founder members, and the next meeting is in February. As our sector grows in importance, we need a voice. APN is a collective of MDs and owners, originally formed to address the challenges from the health and safety standards being introduced. Having got the ISO accreditation, we think it’s important that other networks aspire to the same standard.
WLN – How much do you invest annually in people, infrastructure, IT and equipment?
We’re spending over £350,000 on IT in 07/08, in our advanced data capture technology. We’ve chosen the Peracto web-based system through Vigo, which involves the development process and the solution, plus out of hours coverage and support. We invest similar sums in other areas each year. Meeting the new Health & Safety standard involved major investment in buildings, equipment, people, infrastructure and training. It ties in with our philosophy of being here to maximise the members’ performance: we have no reluctance about investing in business improvements.
WLN – Have you won any awards for your achievements?
We won the Motor Transport Award in 2002 for operational efficiency, the first pallet network to do so.
WLN – Any plans for more hubs?
We’re continually evaluating the best operating methods for our members, and assessing the feasibility of extending our regional networks or opening a larger central hub in the Midlands. The review of our future strategy will be concluded some time in the next six months.
WLN – How will this be financed?
Palletline has consistently traded profitably throughout its history. Raising capital through bank borrowing or additional equity remains an option, if required.
WLN – Finally, where do you see Palletline going from here?
Whatever else happens in our business, our objective for 2008 is to provide a more diverse offering, and become even more renowned for our service and recognised as undisputed market leader among UK pallet networks in terms of innovation and quality.
Palletline
Tel: 0121 386 2526
www.palletline.co.uk
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