Palletline weighing up opening dedicated Amazon facility as volumes soar

Palletline is considering opening a dedicated distribution facility for Amazon, after its relationship with the online retailer delivered significant volume for the pallet network in the run-up to Christmas.

Speaking to MT, Palletline MD Graham Leitch (pictured) said discussions with the network’s shareholder member hauliers were under way.

“It would be in the Midlands area and a hub for the members. It wouldn’t be Palletline doing it directly. It would be a separate sortation facility for Amazon freight, which would relieve pressure and free up capacity for the standard freight moving through the network.

“The site would likely do other things too, but what we are looking at doing is drawing all the Amazon freight into that site,” he said.

Palletline is the only pallet network to hold Amazon’s preferred carrier status for inbound deliveries. It handles the bookings and administration for its members, who then run into Amazon’s 12 fulfilment centres around the UK.

Leitch said that during the inbound peak for Amazon, around the middle to end of November, 10% of Palletline’s network volume was product destined for the retailer.

With this boost, Palletline’s newly published accounts for the year to 30 June 2017 showed a 12% increase in turnover to £35.4m (this excludes transactions between network members).

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The accounts also show a 6% decrease in network services turnover to £17.19m and a corresponding dip in pre-tax profit for the year to £1.2m (2016: £1.6m).

Leitch said he was pleased with the top-line growth and said the reduction in network services turnover – offset overall by acquisitions during the year including Mike Watson Transport and ABE Ledbury – was a direct consequence of reducing hub fees in the period.

This had made members more competitive while maintaining enough revenue to invest in the network, said Leitch.

Palletline has seven regional hubs run by members in addition to its central site near Birmingham, and Leitch said: “We have [also] reduced the hub fees to drive volume to where we have capacity.”

Currently 45% of total volume comes through the regional hubs, up from 30% in 2015.

In the period Palletline added eight new members to its roster: David Hathaway Transport; F&G; HE Baldry (Haulage); Alton Transport; BDT Transport; John Truswell & Sons (Garage); Andy Crane Transport; and Door to Door. Four more members have joined the network since the financial year's end.

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