Pallet network sector "needs structural change" to move to the next level, says Palletforce's Conroy

“Structural change” is required in the UK pallet network sector if it is to mature and continue to provide benefits to both customers and members, Palletforce chief executive Michael Conroy has warned.

Speaking exclusively to MT, Conroy said that growth in palletised freight through the pallet network sector had slowed over the past few years, from a high of 15% in 2014 to 7% in 2017.

While many transport businesses would be grateful for 7% annual growth, Conroy insisted that a combination of mitigating factors was slowing progress in a sector struggling to mature.

Conroy insisted that there were not enough quality members to cover all parts of the UK for all eight pallet networks. This, he said, had led to increased incidences of dual running as certain members knew that networks had no market alternatives to call upon.

He also singled out “a lack of succession planning” for some family hauliers, which meant that the available pool of hauliers in the UK continued to shrink, and that there was a lack of coverage in some areas of the UK, especially in London and the South East.

“There is structural change required in the UK,” Conroy said, insisting that it was in the interests of the security of network members to see pallet networks consolidate and mature.

“Certain companies will swap members,” he said. “There is a merry-go-round of swapping and we all announce it in MT. It is just a tactic in the market! The sector requires that next level. Be it consolidation, or the middle-ground of co-operation.”

Palletforce has made no secret of its desire to lead consolidation in the sector.

In 2017 Conroy (pictured left) told MT that there might only be four or five networks in the market in the next few years. “When it comes to consolidation there is active dialogue. We want to make it happen and we want to lead it. The pallet network concept started in 1992 and that is a long time ago now.

“The marketplace needs to mature,” he added.

Palletforce was acquired by EmergeVest in 2015. The international private investment firm has also acquired operators NFT Distribution, NR Evans and Downton in that time, as well as Allport Cargo Services.

Total assets in the EmergeVest Logistics UK Business Platform now generate some £700m of annual turnover.

In October 2017 Palletforce officially opened the £50m expansion to its original hub, which took capacity at the site to 620,000ft².