The concept of pallet exchange networks developed over the last 20 years has revolutionised road haulage economics but its future health could be damaged by EU bureaucracy and interference. That, at least, is the view held by leading service suppliers like Pall-Ex and Palletline.
Base on the hub and spoke principle, a pallet network is a reliable and cheaper way of timely freight delivery compared with conventional haulage used to empty back hauls. Network members can typically expect to run in both directions with 85% full payloads, thus delivering palpable environmental benefits. Yet there are still potential customers with more entrenched views, who are not yet confident of service levels through the networks and want to retain freight on their own vehicles, demonstrating that the reputation of all networks has in the past been tarnished by poorer performers, says Kevin Buchanan, MD of Palletline.
Today’s industry statistics firmly refute this outdated view. Damage figures across the sector are only 0.04%, with all networks achieving delivery performance figures well over 90%. Moreover, some network operators have gone much further than mere haulage. Pall-Ex, for example, has developed Retail Plus+ to offer home deliveries, timed deliveries into retail outlets and deliveries outside trading hours, which also includes the de-palletisation of goods and the removal of packaging. EcoDrive is another Pall-Ex innovation. This allows the company to both distribute their goods and take away packaging waste, thus reducing the logistical carbon footprint by nearly half and diverting waste from landfill sites.
The pallet exchange networks are by no means confined to UK shores. Pall-Ex, for example, continues to develop its European expansion plans. Operations in Italy and Iberia have been up and running for some time and Pall-Ex Romania will begin operations early in 2012, becoming the first pallet network in Eastern Europe. The company is currently seeking parties for networks in Germany, France, Benelux, Turkey and Poland, with the aim of becoming a Pan-European palletised freight network. So do these greater distances favour a rethink on integrating rail transport with road for palletised exchange networks?
Palletline has on more than one occasion investigated the potential of using rail for Scottish freight “but to date this has not proved a viable option,” says Kevin. He believes that to achieve the integrated road and rail infrastructure which would facilitate joint strategies would require massive government support and investment – “costs which we believe are currently prohibitive.” Within the UK Pall-Ex believes that the road transport system has left rail playing second fiddle but concedes that strong growth projections within a number of deep sea containerised traffic are being made which shows that the country’s infrastructure will need to change dramatically if it is to provide efficient transport solutions. The use of rail, however, is likely to add further sortation costs during the ‘first and last mile’, as the final delivery will continue to be handled by road.
Meanwhile, all the UK pallet exchange networks have their hands full grappling with enervating EU bureaucracy, threatened legislation and unfair competition with European hauliers. One of those threats is the continued use of double-deck trailers within the UK. “This is the key driver of our industry, providing both suppliers and customers with a cost efficient freight service,” says Adrian Russell, MD of Pall-Ex. The European Commission proposal is looking to standardise the height of lorry trailers across the European Union to 4 mt, “which would have a devastating impact on the industry,” says Adrian. If the legislation goes through up to 9,000 UK double-deck trailers, which currently breach the suggested height limit, would become obsolete overnight. Research has also shown that implementing these proposals would mean a 5.5% increase in the number of lorries on the roads and an extra 320,000 tonnes in carbon emissions. It would also cost the haulage industry an additional £305 million, says Pall-Ex.
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