Using scale effectively - Pall-Ex and Palletline explain

While the benefits of pallet networks are not in doubt, the challenges are still coming thick and fast for haulage firms. There are economic challenges, tight requirements regards safety, and environmental laws that are becoming ever more strict, to name just a few.

London’s Ultra Low Emission Zones (ULEZ) are due to come into force in April 2019, with more likely to follow. While this is great news for urban air quality, it places no small challenge on haulage firms and pallet networks. 

But Kevin Buchanan, group managing director of Pall-Ex Group sees the investment needed as ‘absolutely worth it’.

“As a network we are consistently striving to be a centre for excellence and so we maintain that insisting our members improve their environmental credentials sets that high standard,” he says. “To support this, we have a number of partnerships with preferred suppliers, including Volvo, Renault and Mercedes for example, and we understand that in the long term, investing in a greener fleet is better for both members and customers alike.”

In terms of the ULEZ, Pall-Ex would also like consideration given to alternative times for deliveries in London as a huge proportion of the damaging exhaust fumes within the congested capital city centre are generated while vehicles are sat in traffic.

“More night time deliveries would make sense. It would also be wise to implement more commercial lanes, operating much like bus lanes but for commercial delivery vehicles. There has to be an element of sensible give and take.”

Safety

The issue of pallet weights and possible legislation is on the mind of pallet networks.

Palletline has been taking the initiative on the issue.

Managing director, Graham Leitch says: “Palletline has always believed in a safety-first approach across all areas of the operation and has been awarded no less than seven RoSPA awards including the prestigious Highly Commended in the Transport, Storage and Distribution Industry Sector Award in 2016."

During 2015, Palletline introduced a new tail lift service called Lift Assist, which was specifically designed as a major safety innovation in the Pallet Sector by making 750kg the benchmark number.

Graham explains: "It was hoped that the rest of the industry would follow suit in order to standardise safety across the sector. Palletline would encourage the pallet sector to work closer together to drive safety forward and in essence self-regulate themselves opposed to waiting for avoidable incidents to deliver reactive legislation.”

The Health and Safety Executive has not yet completed its review on the issue.

Kevin Buchanan says: “It’s safe to say that over the past 20 years, with the advance of technology and the internet, the logistics industry has transformed. With a growing proportion of b2c orders in the market, some transport operators are tempted to keep pallet weights high, consignments cheap, and risks unchecked.

"As such, my biggest fear is that the HSE review will culminate in a series of guidelines, rather than stricter legislation which hauliers across the UK will have to be accountable for following.”

B2C

The explosion in B2C orders over the last decade has had a major impact on pallet networks, but it is still a relatively small part of business.

Graham says: “Palletline is about to launch a range of new services aimed at effectively managing the B2C opportunity. We feel it is crucial to have learnt from the experience of the rocky journey the parcels sector went through about 10 years ago, wherein some major players were caught off guard and failed to manage the traffic through their networks in either an efficient or customer centric way. It is right and proper that we monitor, manage and develop our B2C proposition effectively, whilst ensuring we drive financial value from it.”

For Pall-Ex, B2C orders account for between 15-20% but it is growing, fast.

“Our challenge as a sector is to keep up with this shift in demand, and as such, we need more tailored B2C service offerings,” says Kevin. 

“The first change that must be made is improvements to technology, giving customers a choice as to when and where their deliveries should arrive. We are increasingly working for end customers who are not as familiar with the logistics sector, and we as networks and hauliers need to adapt to that. Guidelines and legislation on pallet weights will also be a key factor too – what are the rules to delivering to private residences? What is safe to deliver kerbside, and how many delivery men are needed? Ultimately, a successful B2C market share heavily relies on adapting to customers’ choice, and so we must be able to facilitate that.”

Technology

Like in all business, technology provides opportunities to develop. At Palletline, Graham prefers to utilise technology whenever he feels it genuinely adds value to the business model. A recent example is investing in a fleet of the latest forklifts with accurate weighing technology, which is used to ensure Palletline operates safely during the loading and unloading of freight as well as ensuring the vehicle top decks are not overweight. The weighing technology is provided by Avery Weigh-Tronix, and you can read more about this company on Page 49.

Pall-Ex sees IT investment to create more options for the end customer as vital.

“It depends,” Kevin explains. “Some individuals may be very price-conscious, in which case may not mind quite so specific a delivery time. On the other hand, premium delivery slots might be crucial for others, who are willing to pay a little more for a more specific service.”

Pall-Ex recently upgraded its Trace Now app to include new functionality that creates added value for its customers.

“Customers can now receive text and email updates with an ETA for their delivery. Digital signatures for each delivery will now also be linked with GPS coordinates, ensuring traceability is even more robust. Couple this with a host of functionalities designed to help support and improve internal systems, and we now have an upgraded app that benefits everyone.”

Value added services

Palletline firmly believes value added services have their place, but like its stance on new technology, it feels it is critical to ensure services really do add value.

“It’s all too common across the industry to re-badge a service or introduce a service without identifying who the customer is,” says Graham.

“These services are often designed to recover or achieve volume, but without the consideration of their value in the market place or their ultimate effect on further margin erosion in the sector.  As we mentioned before, our introduction of the Lift Assist service adds the value of safety, and ensures the industry drives the client to the right service for their type and weight of freight.  This ultimately results in getting paid the right price for the right job, it also reduces accidents and therefore lost working days and hence safety is our bottom line.”

Kevin adds: “If hauliers and networks cannot offer their end customers a varied choice of service – they are by default less competitive.

"Ultimately, networks need to be able to future proof their services by being more flexible to the end customers’ needs. Acknowledging what is important to them, and offering a menu of services to adapt to their time-sensitive or specific location needs, thus ensures networks are not providing a mismatch of expectation, and can consistently deliver to whoever, wherever, whenever their need.”