Palletline kicked-out member DTS earlier this month in order to “guarantee network integrity”, a move that the Northumberland haulier claimed had forced it into liquidation.
Palletline said DTS had been a member since 2006 but there had been a change of ownership a year ago.
In a statement, it said the new owners were “welcomed into the network” but that it wasn’t long before the business began to experience financial difficulties.
Palletline said it had supported DTS with financial assistance and business development, but it also said: “Unfortunately, a substantial third-party creditor was not so amenable, resulting in the ultimate collapse of the business.”
Network director Glenn Baker added: “Our member owned business model is very supportive of fellow members during difficult times, however there is only so much we can do in order to assist a floundering business.
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“In the case of DTS we have provided much support over a six-month period, but ultimately once it was clear to us that the business was effectively insolvent we were duty bound to act in order to protect the integrity of the Palletline service.”
However, DTS general manager Sean McAndrew said claims it was a risk to the network were “absolute rubbish” but the business had now gone into voluntary liquidation.
He said: “Last Friday lunchtime (2 November) Palletline walked in and issued a termination with immediate effect to safeguard the network.
“We were one of the best depots in the network operationally. For whatever reason I am not privy to, Palletline deemed we were a risk and in order to safeguard members they terminated our membership.
“That’s 50% of our business. We were unable to trunk that night, we were unable to do anything. The business was viable, but only with the Palletline business.”
DTS is a trading name of Holmes Chapel Haulage.
Graham Leitch, Palletline MD, said the network was saddened by the loss of DTS and its thoughts were with the firm's staff.
He added: “However, it must be stated that, like all our members, DTS was an independent company and hence we cannot be held to account for the business and financial decisions they made.
“It is now important we look to the future and welcome our new member W Hedley & Sons, along with our contracted partner Logistics North East, both of whom we wish the utmost success.”
Kinaxia Logistics
Palletline has more recently taken action in regards a number of members that had been acquired by Kinaxia Logistics, adopting a policy of limitation.
Speaking to MT after the purchase of AKW Group by Kinaxia, Leitch revealed that Macclesfield-based William Kirk, which is also owned by Kinaxia, is now working its notice within the network. This makes it the third company owned by Kinaxia to be asked to leave by Palletline as part of a policy introduced last year - Panic Transport (returned to Pall-Ex) and Foulger Transport (now running in Palletways) are the other two.
Leitch said: “Kinaxia is now delivering 7% of our freight; I believe one business that controls more than 7% is a potential risk. If that business changes hands, that would leave a significant element of freight for our members to cover.”
He added that Palletline is in talks with Kinaxia “about how we can work together to limit that exposure – we are happy to work with it and are discussing how we can limit the risk” .
Leitch said Palletline had chosen William Kirk to leave the network because it would redress the balance of freight delivered by Kinaxia-owned operators “to a level we are comfortable with” .
Kinaxia's AKW Group and Lambert Brothers remain members of the Palletline network and Leitch confirmed there were no plans to change this.
