Parcels to pallets – a new but lasting trend?

As the e-commerce boom continues, Palletways says a growing number of parcel companies are looking to diversify into palletised haulage. MT hears why the transition can offer a lucrative new revenue stream

The UK saw a big jump in e-commerce, both B2C and B2B, during the pandemic as stores and businesses temporarily closed and consumers remained hesitant to shop in person, even once they reopened. We’ve all seen the growing dominance and visibility of Amazon and other parcel delivery companies which reflects this change and consumer demand hasn’t altered.

As a result, Palletways has seen an increasing trend towards parcel firms diversifying into haulage and palletised freight. Given they are both multi-drop with many other similarities and transferrable skills, it seems like a natural progression to move into HGVs.

In the past three months alone, Palletways UK has seen more and more firms joining that are not from a traditional transport background. These include Darcica Logistics in Bicester, Prime Parcel Services (PPS) in Glasgow and Collect2Deliver in Kirkcaldy.

As a traditional express palletised freight network, this has many benefits to Palletways, as well as to these smaller companies.

Explains Anthony Tattersall, owner of Darcica Logistics. “Trucks are my passion and initially parcels were an opportunity to start my own business but I always knew I wanted to grow and expand into bigger things and develop a successful, sustainable business across all areas of logistics.

“It’s not a monumental jump to transition as we’re already skilled at routing, managing drivers, vehicle repairs and maintenance. We’re used to maintaining high levels of customer service to ensure jobs are completed on time and to a high standard, which involves problem solving, quick thinking and project management. The difference is having and maintaining your own customer database as opposed to sub-contract work, and a more dynamic and interesting structure of work – managing a whole team not just drivers.”

Tattersall believes the main challenge in moving from parcels to pallets is the finance needed for investment in larger vehicles and premises. “But on the plus side you gain more commitment through longer contracts, longevity and security within the pallet network to balance out the risk,” he added.

Jeff Lawson (pictured) at Collect2Deliver agrees, saying: “Fundamentally the principal of transporting goods is the same across the logistics industry. The difference is the service provision particularly at the last mile delivery point. The devil is in the detail – in planning and delivering – which is key in providing a great service.”

Collect2Deliver has found the tools it uses are very similar to the ones used by Palletways. Even though the product and the end service is different, Lawson says it has been easy to integrate this into its IT platform.

“This may not be such an easy task for a ‘traditional’ transport company,” Lawson says. “Customer service, the focus of Palletways, is about providing a successful last mile service through innovation and this echoes our company ethos too.

“The Palletways network has sparked conversations and opened doors for our business that would never have happened had we not become a member. We’re glad to be part of a pallet network with ambition to not only be the best - but remain the best at what they do. We’re working with like-minded individuals and innovative company owners with shared goals, to provide a fantastic service. And being a member of Palletways gives us a local presence that we hadn’t felt before.”

The arrangement brings many benefits for Palletways, too. Parcel firms not previously in haulage have an innate understanding of drivers on a large scale – between 50 and 100 drivers in some cases – and great capability of handling larger volumes on masse, efficient routing and general logistics management.

Andrew Muir, MD of PPS, told MT that since since starting the parcel delivery business and growing it from five vans to 55 vans daily, his ambition has always been to diversify into haulage: “When we met Palletways I saw how close they were to us in terms of technology and customer experience, I knew it would be a good fit,” he explains.

“The partnership has allowed me to build my business in an exclusive postcode area and ship anything from a parcel to a full trailer load throughout Europe for my customer base - something which is unique for my geography.”

Muir insists PPS is consistently in the top ten parcel companies in the UK for performance: “Working with online retailers and parcel delivery companies everything is metric and performance driven to ensure customer experience is top priority – with an emphasis on same day and not tomorrow,” he continues. “It can be daunting scaling up – but the parcel game is tough, so for me it’s a no brainer. There will be different challenges and issues, but it’ll be easier to manage on a smaller scale for similar returns. We’ll bring an urgency and laser focus on customer experience to working with Palletways as it’s engrained in our DNA.”

Muir has been impressed with the technology Palletways uses which he says will help to differentiate them in the future, even more so than at present. Its recent introduction of the Pallets to Consumers service for companies who sell directly to the end consumer and the launch of Palletways ID, a sophisticated forklift truck-mounted sensor technology, are prime examples of its industry-leading systems.

“Technology and the efficiencies it brings to your operation should be the core focus of any logistic company,” he added. “We would have really struggled to get onboard with a network who doesn’t have this as priority, and we want to be part of what Palletways is building for the future.”

Many parcel firms are also already well along the road of alternative fuels and the EV revolution. Darcica says it puts sustainable practices at the heart of everything it does. This includes a fully electric 3.5-tonne vehicle, which was purchased to service the Oxford Zero Emission Zone, a zone which is set to expand its catchment area this year, and the use of electric forklift trucks across its depots.

The 3.5-tonne vehicle alone will result in some savings of 5.71 tonnes of CO2 a year. It enables Darcica to continue to service customers in the ZEZ with sustainable deliveries via a fully electric fleet.

Due to the nature of pallet deliveries – using larger vehicles and travelling longer distances – it’s not surprising this is a slower area of development in the sector. But along with PPS, which operates in and around the Glasgow CAZ, both companies set excellent examples to the haulage industry at a time when it’s never been more important to focus on ways we can all make journeys more sustainable and reduce the sector’s carbon footprint.

Lawson at Collect2Deliver adds that there are few ‘traditional’ hauliers in its area and those that are have shown little interest in joining a pallet network.

“With the gap between parcel and pallet delivery companies closing, the experience will need to be transferred to allow this transition,” he says. “We all know that the delivery service expectation of the public is becoming ever more demanding. It won’t be long before the expectation will be that you order a bathroom online after 10pm and have it delivered the very next day as you would with a parcel.”

Palletways is currently in conversation with more parcel companies looking to diversify into palletised haulage, and it expects the trend to continue as even more firms look at its operation as an additional revenue stream.

Like Darcica, PPS and Collect2Deliver, what these firms bring to pallet networks is a fresh look and a real hunger to excel and do better as they come from every different industry imaginable. This is great for the Palletways business and great for the logistics industry too.