It seems a paradox that during a recession the pallet exchange networks thrive even more, but that is not to say that they need not fear hobbling by Government policies, particularly relating to high fuel prices and the uneven playing field domestic hauliers face compared with their Continental counterparts.
It is not difficult to see why the pallet exchange networks have enjoyed good growth since their inception 20 or so years ago and now account for about 12 million pallet movements a year. A pallet network is fast, environmentally desirable and a reliable way of delivering goods in large or small amounts. Member hauliers of such networks, who usually own the hub operation, can be assured of high lorry fill rates, typically over 85% in both directions, whereas before a return journey was usually empty running. Outfits like UPN report on-time delivery rates of 99.9% and the security aspects are so good as to assure shippers of high value products. UPN, for example, has one client that sends pallets containing medical equipment worth over £100,000 per pallet.
The pallet members’ offerings also appeal to consignors because of their service flexibility. Time was when only full pallet loads were considered, generally 1-6 pallet consignments. Now, however, operators like UPN accept full, half and quarter pallets and micro pallets, ranging from 1,200 kg down to 150 kg. All networks offer a range of timed delivery and some use double-deck trailers to maximise returns.
Clients using hub-based networks also boost their own environmental credentials, says Michael Conroy, CEO of Palletforce, which has grown steadily throughout the recession. “For any business that wants to boost its environmental credentials, using a pallet distribution hub is a truly credible solution.”
The road haulage industry has done much to burnish its ‘green’ credentials but it is no thanks to the Government, whose punitive tax rates on fuel and red tape are choking an industry that is vital to the country’s prosperity. Michael Conroy continues: “This mix of higher costs and lower volumes is a dangerous combination and support from the Government to limit fuel prices and provide some stability and security for the industry is going to be crucial.”
It is true that some UK Government help is available, like incentives for vehicles running on bio-fuel, but that is puny compared with what could be done. Such payments could even work against road hauliers, because, illogically, they do not extend to UK coastal shipping. That will surely change as commercially viable windjammer cargo ships* start to launch from British shipyards soon.
These vessels, typically of 3,000 dwt to start with, will derive 60% of their thrust from wind power and 40% from Rolls-Royce spark ignition engines burning methane gas extracted from thousands of tons of food waste. They will prove every bit as reliable and safe as oil-burning ships in meeting tight delivery schedules.
Such vessels can expect to relieve road congestion, and to that extent will be a friendly competitor to road hauliers.
Warehouse & Logistics News