As freight costs continue to rise while business levels remain static at best, companies are focussing on their logistics costs even more intently. One way to do that is the consider pallet exchange networks for moving up to six pallet loads at a time, a concept that began in Britain over 20 years ago and has grown like a weed ever since, stretching its tentacles right across Europe. It is also one of the few businesses in logistics where recession works in its favour.
The pallet exchange network concept, now involving the movement of over 10 million pallet loads a year in Britain alone, is a triple win scenario – for the haulier members of the networks, for their customers and for the environment. Such networks work on a hub and spoke principle, where a haulier member in a local area delivers an almost full load to the central hub, where they are decanted and placed on other vehicles for the second leg of the journey by other network members, which typically number 100 and cover the entire UK. A member then gathers an almost full load for the return to his depot.
The networks have been a boon to their members because it means they are no longer hauling much air. The average fill rate for the networks is 73%, with some, like Pall-Ex, claiming a 90% fill rate. This compares with 51% for conventional haulage systems. Such load factors mean not only better profits for the hauliers but also lower costs for their customers. The environment is also a winner. The Department of Transport estimates that pallet networks help remove over 800 vehicles from the roads every day and the healthier returns for the networks mean more investment for environmentally related issues. Pall-Ex, for example, has developed Eco-Drive, which involves taking back waste packaging from deliveries and recycling them for customers.
In the past, hauliers’ customer concerns over pallet networks revolved around security, reliability and damage levels. Those concerns are no longer valid. UPN, for example, offers delivery success rates of 99.9%, and that is an impressive performance in an industry that is moving increasingly towards next day palletised freight services. One of UPN’s members, Response Logistics, believes the market demands for smaller consignments remains high and a network is the only way “to deliver consistent quality and value for money,” says its MD, Pete Shortt.
The concept has become far more flexible since the early days and now offers to handled half pallet loads and even micro loads, as well as non standard-shaped pallets. The IT investment in the networks has also grown dramatically so that the freight owners can now track their cargoes’ progress at any time online and throughout Europe.
In the past, it must be said, some pallet exchange networks gave rise to concerns over service quality and some have fallen by the wayside. Potential customers, however, concerned that the networks might offer a service level below dedicated transport solutions, can put them to the test before making any commitments. Choosing a network supplier needs some care because not all offer the same delivery service to meet customer needs. The quality of the network services has to be top line, and that means not only on-time deliveries but damage-free ones. Such excellent service levels mean that the member hauliers of any network can help their customers to retain their clients’ business and win new customers. Once customers have experienced the quality of service it is rare for them to look elsewhere, says Response Logistics’ Pete Shortt.
The use of IT with track and trace capability has boosted the network services beyond Britain’s shores. Palletline, for example, provides a fast, reliable, competitive pallet distribution service throughout the Euro zone, with no hidden costs by way of surcharges, currency or fuel fluctuations. It is just one example of innovating to survive and in this respect it is a pity that Britain is placed at a disadvantage with its European counterparts owing to high fuel costs. The Road Haulage industry that has done so well in trying circumstances deserves and needs some recognition from the Government by way of help rather than hindrance.
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