The launch of the Palletline pallet network 21 years ago revolutionised the market for palletised freight distribution, creating an innovative and highly efficient hub and spoke based operation. Before Palletline, to send a consignment from one end of the UK to another, a local haulier had to service it on his own fleet or find an ad hoc solution to get it there.

PAPH9860The Palletline system meant like-minded, quality hauliers could exchange freight at a central point for delivery in their local area. This meant all freight outside their area was consolidated on one vehicle and sent to the Palletline hub. Efficiency was improved tremendously, and the cost of transporting smaller palletised shipments throughout the UK was drastically reduced.

Palletline’s success triggered the birth of the palletised delivery networks. Today Palletline continues to lead the pallet networks forward with investment in technology to differentiate them from their competitors, driving service and efficiency and resulting in benefits to members and customers alike. The proof of the pudding is that Palletline won the prestigious Motor Transport Award for Network of the Year 2012.

Kevin Buchanan, Managing Director of Palletline, spoke to Warehouse & Logistics News.

WLN – First of all, Kevin, what does your role as MD of Palletline involve day to day?

I’m predominantly responsible for our strategy for growth, and developing our team to ensure we stay at the forefront of the industry. I’m based at the central hub where we have an excellent team. I allow our managers to manage; my role is to support and encourage them in doing so.

WLN – Who else is on the Palletline management team besides you?

The team are Ruth Moor, Financial Director and Mark Pulford, Operations Director, who is responsible for the hubs. The directors and myself are supported by a line of functional senior managers: Troy Bailey, General Manager Operations, Sue Hodgson, General Manager Network, Helen Dickinson, IT and Special Projects. We’re also appointing a new person as Head of Commercial.

WLN – Who owns Palletline?

The members own it. When new companies join they put up a bond and have six months’ probation. At the end of the period, following a detailed report, the board approves them as a full shareholder member and we convert their bond into shares. No one can be a member unless they are a shareholder, and no one can own more than 5% of shares, which ensures we don’t end up with big companies dominating the network.

WLN – How does Palletline work?

We operate as a hub and spoke palletised distribution system. Think of it like a bicycle wheel. The Palletline Hub is the centre of the wheel, with each of our members being a spoke. They all join up and work in harmony. We only select the best high quality, financially secure and independent distribution companies.

WLN – Who are the major member companies these days?

The list is far too long to name them all! Potter Group joined us recently after less positive experiences with other networks. Aberdeen and Glasgow based ARR Craib was new to pallet networks, but has taken on running our Scottish hub for us. Other new members include Panic Transport (Contracts) of Rugby, and Miniclipper Logistics. Bedfordshire based Miniclipper and Panic are ex-members of Pallex, and were attracted by our culture of enabling members to retain margin. We’re equally welcoming to less high profile companies such as Olivers in the Scottish Borders and JMC Van Trans in Southern Ireland, who have 14 depots.

It’s a broad mix, from high-profile national companies to niche firms who are known locally, but with our help they all offer very high service levels to their customers.

WLN – How big is Palletline in terms of pallet movements, numbers of vehicles and so on?

Palletline today represents a powerful national body in the logistics industry, employing more than 6,000 people across the network, operating in excess of 10,000 vehicles, with access to more than five million sq ft of warehousing space. Our members work in partnership with each other to provide added value solutions that help them win business.

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WLN – Where is your central hub? How many hubs do you have in the UK?

We operate four hubs, our central facility near the NEC in Birmingham and three regional hubs in Manchester, Perivale in North London and Cumbernauld in Glasgow. Each regional hub handles consignments for delivery in their area, ensuring we reduce miles travelled and reach our environmental objectives.

WLN – Can you talk us through what happens to a consignment?

Each member collects freight from their customers and identifies any freight for delivery outside their local area. They then scan each pallet and trunk all their network freight to one of our hubs. There each pallet is quality checked, scanned, unloaded and sorted into delivery areas. Each member then collects pallet network freight for delivery in their local area, so in effect they simply exchange freight, and the pallets are scanned and quality checked again before leaving our site. It all happens overnight. It’s simple yet very effective.

WLN – What happens after that?

The individual members then take the freight back to the local delivery depot, where it is scanned and checked then sorted into delivery areas, making sure that requests for timed deliveries or specific delivery needs are noted.

WLN – What different services do you offer?

From single pallet delivery through to full load consignments, we have the right solution to deliver goods safely, reliably and effectively at a time to suit our members and their customers. We offer premium services, ensuring the fastest possible delivery across the UK, Ireland and 29 countries across the Eurozone as well as cost effective economy services. Alongside the traditional pallet delivery service, we offer a full range of added value services with our members working with their customers to create tailored distribution packages. This enables an end to end supply chain solution with industry leading service levels.

WLN – Can you tell us about the City 24 service? Which cities does it cover?

City 24 is predominantly London-based, but we can offer it elsewhere if there is demand. With City 24 we have the ability to manifest pallets for delivery between 6pm and midnight instead of only up to 5pm. During the Olympics we were taking pallets as late as midnight. It’s driven by legislation – eventually all city centres will only allow night deliveries to central locations, to reduce congestion.

WLN – Can you handle all types of palletised freight? What about chilled and ambient?

We can handle all kinds of ambient freight at the hub. Many members have their own specialist divisions for chilled and frozen. They operate outside the Palletline network, but can always find ways of working together to meet a customer need.

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WLN – Can you also offer warehousing and logistics services?

Yes, our members can offer a wider range of services including warehousing, storage, pick & pack and specialised delivery services to meet most customer needs, such as two man deliveries.

WLN – Are you looking for new member companies?

We’re always interested in adding quality members to our network. We look for financial security, operational excellence and the commercial know-how, together with a commitment to our cooperative quality ethos. The efficiency of the Palletline model continues to attract high quality members to the model and delivers results.

WLN – What do new members get in return for membership?

New members consistently report increased service levels and positive customer feedback as a result of the transition to our network. Membership of Palletline also enables members to be more efficient and retain margin – enabling a competitive customer offer.

Palletline-logoWLN – Do you offer a European service?

Yes, Palletline also offer a full import and export service to 29 countries across the Eurozone. Using our extensive network of high quality members, the Europe delivery service is seamless and delivers excellent value for money. We have recently relaunched the service offer based on quarter, half and full pallets, providing customers with a reliable and cost effective solution for all their European palletised delivery requirements. Our one-stop-shop delivery to Europe service covers:

• Collections from the UK for delivery throughout Europe

• European collections for delivery within the UK

• No hidden or additional charges such as currency or fuel surcharges

• Reliability with set departure schedules

• Transparent tracking

• Competitive rates, whatever the size or weight

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WLN – How do you sell your services to local customers?

Do individual members sell Palletline’s services in their own areas? At the moment we leave members to sell their own services locally, and facilitate and support them centrally as needed. Our Palletline Training Academy offers workshops on business development, marketing and social media which members have found very beneficial. It’s likely going forward that we’ll take a stronger selling role and will develop a more robust central marketing unit, but our members’ independence and profitability will remain at the heart of our strategy.

WLN – It’s been a difficult few years for industry in general. What has it been like for Palletline?

We’ve continued to grow and prosper. Despite the current economic climate we won the prestigious Motor Transport Award for Network of the Year 2012 and seeing growth well in excess of our forecast at 10%.

WLN – As part of your commitment to investing in technology to support your members, you’ve recently brought in in a new management IT system. Can you tell us about that?

In December 2011 we invested in the new Contrado system, specifically designed to meet the current and future needs of both members and customers. We’ve future proofed our offer by allowing sophisticated tracking, end customer tracking, text message alerts and integrations with end customers’ systems.

WLN – What does Contrado do for the members?

Contrado gives them the full set of competencies to run a full pallet distribution service. It automates everything that can be done, taking out as much admin cost as possible. We’ve also added the benefit of an intense focus on different areas of service. As part of this, digital signature capture and scanning across the network is over 98.5%; with digital time stamps, GPS positioning of consignments and automated service issue alerts customers can be confident of our service performance.

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WLN – What difference has your scanning technology made?

Scanning technology has had a major impact on service levels – it’s improved our freight presentation as a result of feedback and photographic evidence. The objective was to harness the technology to improve the claims process, from reducing the occurrence of claims through to shortening the claims handling timescale and improving evidence levels. So far we’ve seen reduced claims, and the Association of Pallet Networks (AQPN) stats confirm we are leading the industry in this area.

WLN – How ‘green’ are you as a business?

The pallet network concept is the greenest method of distributing freight, taking vehicles off the road. Every trunk vehicle that goes to the hub takes out four rigids or two trailers. On top of that are the ancillary benefits of the hub itself, which achieves high environmental standards against tough annual targets. It runs on LED lighting, and the new forklift fleet we introduced two years ago has reduced fuel consumption by 30%

WLN – What industry standards do you work to?

We comply with all legal requirements. We’re members of the RHA and the APN. We’re accredited to the ISO 9001, ISO 14001 and OHSAS 18001 standards, covering quality assurance, health and safety and environmental efficiency.

WLN – What are your plans for further developments to the service and the network in 2013?

We’re developing a project to improve efficiency, utilising the strength of the Palletline network. Also, starting from 4th March 2013 members can scan and track their pallet movements virtually and send full loads direct from one side of the UK to another with direct trailer exchange. It’s ideal for groupage of less than full loads, which is a growing market. We’re moving to a centrally controlled, coherent commercial strategy to generate our groupage volume.

WLN – How quickly is the Palletline network growing? Are there any limits to its size?

The membership has grown 30% in the last two years. We’ve an open mind about the size of the membership: we’re always reviewing how we cover different parts of the UK, and looking for companies of the right ilk who share our strategy of mutually beneficial working.

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WLN – Finally, where do you see the pallet networks as a whole, and Palletline in particular, going from here?

Pallet networks as a concept are a great idea, but some people in the market have too much of a central view, in which the member companies who deliver the pallets have to discount their delivery charges more and more. Apart from the need to have the right hub, a cross docking operation is the least complicated part of the process – nurturing the members is what makes the difference.

A number of hub operators have put too much emphasis on recovery at the hub, to the detriment of the members. Our central charges are typically less than those of our competitors, probably around £1.00 – if we can do it, why can’t others? One pallet network has a system in which members nominate accounts with maximum delivery costs of £10 per pallet – that’s discount for discount’s sake. The people who win in that situation are the customers and the hub owners, but the transport businesses will suffer and end up not being able to run properly, so unfortunately we can expect some fall-out from this short-term view.

For our part, we’ve had our most successful year ever, with our highest dividends and our highest service levels. People are happy to pay a little more to have the job done properly by Palletline. We have the most robust network of members – we’re comfortable that the future looks bright and we’ll survive, but some of the others may well not!

Palletline

Tel: 0121 767 6870

www.palletline.co.uk

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