Arguably, in an age where ‘green’ issues are concentrating minds more than ever, the pallet exchange networks spawned in Britain just over 20 years ago are doing more to promote such issues than any other aspect of the road transport industry. The other big plus, of course, is that the concept behind the shared network that reduces unnecessary, half-empty vehicle movements is a win-win result for both the network members and their customers through lower charges for, typically, up to six pallet loads per consignment. Yet, curiously, there are still many businesses leaders who do not understand or know about the benefits of palletised freight distribution based on exchange networks using just one central hub to serve the entire country.
The pallet exchange network business owes part of its remarkable growth, even during recessionary times, to flexibility in the service offerings. According to the Association of Pallet Networks, the next-day service offered by its members now consistently accounts for more than 63% of the volume. Varying the pallet load size has also helped to spur good growth, which in 2011 showed pallets handled up 7.3% to over 15.3 million. Members of the networks will offer full, half and quarter pallet load sizes and in UPN’s case there is a micro pallet service, which has proven popular because it allows customers to consolidate freight up to 150 kg on one pallet. The micro now accounts for around 10% of UPN freight volumes and has grown at an annual rate of 48%.
During the pallet exchange networks formative years there were customer concerns about delivery reliability, damage levels and security issues surrounding high value goods. There was also the perception that poorer performance by some exchange networks had tarnished all networks. These fears should no longer exist. Today’s industry statistics highlight damage figures across the sector of 0.04% with all networks achieving delivery performance typically around 99%. Some customers now have no qualms about sending goods that could be worth £100,000 on just one pallet. Even so, some customers still have lingering doubts. One such customer was Crompton Lamps whose products are very fragile and so they were cautious about abandoning their own direct delivery freight arrangements in favour of a network operation.
Transparency is key to any pallet network operation and by using the most appropriate IT the service providers can allow their customers to track and measure service reliability. Crompton chose UPN as its palletised freight partner whose online KPI reporting allows customers to see how good the service is. The service has also cut Crompton’s paperwork by at least 50%, helping to improve its ‘green’ credentials.
Tailored IT investments are also helping expand the palletised networks on the Continent where, in particular, Palletline has successfully opened the doors to the provision of wider 3PL and freight exchange services, says managing director, Kevin Buchanan. Its customers can now benefit from track and trace systems and processes for instant communication of accurate proof of delivery information. In short, Palletline can now offer assurances on service quality and performance right across Europe.
The networks are also improving their ‘green’ credentials in other ways. Pall-Ex, for example, offers EcoDrive, which takes away their customers packaging waste. This reduces the logistical carbon footprint by nearly half and prevents the need for a separate waste collection vehicle service. It also diverts such waste from landfill and instead sees Pall-Ex baling and disposing of it ethically.
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