The pallet networks in 2017

From Palletforce's new £50m super hub to Pall-Ex's expansion across Europe, 2017 has been an exciting year for the pallet networks. MT takes a look back at what the year held for the sector's players.

Palletforce

Palletforce continued to make noises about network acquisition this year, and chief executive Michael Conroy said that its newly opened £50m hub positioned it perfectly for consolidation.

The Second hub opened on 10 August, and is joined with the original at Burton-upon-Trent.

Palletforce now has the capacity to handle 30,000 pallets a night, with 450 HGV parking spaces across the 38-acre location. In total, the network now has 620,000ft² at its disposal, a significant increase over its original 380,000ft2 hub.

The development accounts for most of the £65m parent company EmergeVest has spent on Palletforce since it bought it for £30m in 2015.

Conroy said that the site “positions us perfectly to take advantage of market consolidation, which is inevitable in our sector.”

Palletforce also announced this year that it was to open a Chinese division.

Conroy told MT that while the network wouldn’t carry the Palletforce name because of translation issues, preparations were well underway for the Chinese branch and a pilot should be taking place in Shanghai next year.

“China has one of the most vibrant economies in the world,” he said, “and even though it’s slowed down, it’s still growing faster than any other economy,” he said.

Palletways

Perhaps the most exciting development for Palletways this year was the launch of its ETA delivery service.

Taking its lead from the more traditionally tech-savvy parcels sector, the network began offering its customers two-hour delivery windows in March this year.

UK MD Dave Walmsley said it was a natural move given the shift in pallet networks towards more B2C deliveries.

“What customers see in the parcel sector, we want to give them in pallets. I want Palletways to be a brand of choice for consumers,” he told MT.

The network also opened a new hub in Bristol earlier this year, which is its fifth regional site in the UK.

Located just off the M5 in Avonmouth, the hub will process around 500 pallets a day, adding to the 40,000 pallets Palletways shifts every 24 hours.

Palletline

Palletline celebrated its 25^th anniversary in 2017. The first UK pallet network started trading in 1992 and MD Graham Leitch said it was “rightly proud of its heritage”.

He said: “Whether it be new services, technology, innovative hub operations and of course our flagship health and safety operations, we at Palletline remain committed to further developing our industry for the better.”

But its 25^th birthday wasn’t the only milestone for Palletline this year; 2017 also marked two years since the network introduced its 750kg weight limit on tail-lift deliveries.

The decision to cap the weight that its drivers could move with manual pump trucks was “absolutely the right one”, Leitch told MT in October.

He said: “We’ve not seen any reduction in the number of pallets moved; it’s not had a commercial effect, and our customers have applauded the decision.”

Pall-Ex

Brexit? What Brexit. Pall-Ex used 2017 to ramp up its European network, opening new hubs in Poland and Bulgaria.

The network actually crossed a marker with its European network this year, and now moves more pallets on the continent than in the UK.

Through a mixture of franchise agreements and joint-ventures it now has networks in Portugal and Spain (as Pall-Ex Iberia), Romania, Bulgaria, Slovakia, the Benelux region and France.

MD Kevin Buchannan said that after a few years of difficulty, it felt like good times had returned to the network.

CEO Hilary Devey echoed his sentiment when MT spoke to her earlier in the year.

TPN

TPN launched a bright new livery in early 2017, branded with the strapline “THE pallet network”.

MD Mark Duggan told MT that its membership had reacted very positively to the network’s new look, and the new design was rolled out to members throughout the year.

After it underwent and MBO in 2016, Duggan said TPN is growing strongly, as the buyout had allowed the network to form a new leadership team that was driving the business with a collective strategy, rather than just a hub one.

“Last year we shifted more than 3.5 million pallets and this year we are running way ahead of that. Just after Easter rates peaked, up 22% higher year-on-year, and that is still strong now, up 18% compared to last year," he said.

Pallet-Track

Pallet-Track also opened a new facility this year, and while its £10m investment pales in comparison to Palletforce’s £50m spending spree, the Pallet-Track said the move would benefit at least 30 of its 80-plus members directly, reducing long hauls and empty running.

The new site 70,000 ft² in Greater Manchester, Pallet-Track said, will take pressure of its central Wolverhampton hub and improve network efficiencies in Scotland and the North.

Nigel Parkes, MD of Pallet-Track, said: “This is our first stand-alone hub development in the north of England which is important because it secures our future development in this important region and allows us to manage volumes and flow in a more cost-effective and environmentally-friendly way."

The network also bought member Horley Road Services back in January, but Parkes said the buy was a one-off, not the beginning of an acquisition trend.

He said that with Horely owner Iain Mays looking to retire, the opportunity to buy the long-standing member was simply “too good an opportunity to miss”.

“It provides a continuation of the business and a future for the staff, many of which have been there for some time," he said.

Fortec

Despite member NC Cammack & Son jumping ship to join rival Palletforce earlier this year after it was bought by Kinaxia Logistics, Fortec said that its strategy of prioritising quality not volume continued to pay off in 2017.

Speaking to MT in May, Fortec network director Dave Spong said its move to raise service standards but reduce volumes late in 2015, which was implemented in 2016, had paid dividends.

He said: “We made all those changes and we lost about 4% of our volume a night to start with.

“We knew that was going to be the case but by October 2016, when we could make a true comparison, the growth was about 7%. So we are still growing at an unbelievable rate, back to 7% to 10%, and we are pretty comfortable in terms of the growth.

“We absolutely believe that was the right thing to do and our member retention has proved it was the right thing.”

Principle Pallets

And what of the enigmatic Principle Pallets? Set up by former Fortec directors Neil Hodgson and Marcus Fischer and originally billed to launch in 2016, MT hasn’t heard a peep from the potential new entry to the market.

We’ll be looking out for news of the network in 2018, which has so far been met with scepticism by other network directors.

Pall-Ex founder Hilary Devey said: “I don’t see a place for them. Not just because of the age and maturity of the market, but the hauliers simply aren’t there. There’s no need for another network now. I wish them all the luck in the world, but I don’t think they’ll hack it.”