A continuing appetite among private equity and the entry of trade buyers into the sector is proof of the enduring attraction of the pallet network model, according to Palletways CEO James Wilson.

Speaking to motortransport.co.uk, the man behind modern Palletways who retires from his role at the end of this month, highlighted recent changes in network ownership as a testament to the sector’s success and appeal.

“I think what you are seeing is two different appetites. An appetite from the private equity world, which is a positive thing as it’s a strong signal that investors see future investment potential.

“These people don’t do this unless what they are investing in is viewed as having something that sets it apart and can grow further, so I take that as a positive statement,” he said.

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Wilson added: “Equally, we are now seeing trade players that haven’t played in this world starting to invest, such as Stobart [which purchased TPN last year] and Imperial [Palletways’ owner].

“Every corporation wants to grow generically or through acquisition, so again I take this as a positive sign as these companies think there is future potential in doing so for their investors.”

Wilson said that if investors felt a sector had failed, that it lacked innovation, they would shy away from putting their money into it.

“So what we have [with pallet networks] is [a sector perceived as ] higher yield and with higher growth potential than other parts of transport,” he said.

Wilson will be succeeded by Luis Zubialde on 1 July at Palletways.

Opportunities and challenges

Looking to the future, Wilson said that while Brexit would present challenges, whatever happens in the negotiations Europe will remain a trading partner of the UK that requires transport and logistics service capability. Palletways has a presence in 20 European countries via hubs and service agreements and its strategy will not change.

Domestically, Wilson said that the emergence of the business to consumer offer, something that Palletways has seen rocket from approximately 8% of delivery volume five years back to roughly a quarter of deliveries today, was now a fact of life and would only continue to grow.

This is something “pallet networks are well positioned” to make the most of, he added.