Growth falling, say UK Pallet networks

Palletised freight networks have been the star growth performers of the transport industry in recent years but sector sees signs that growth is slowing as market matures.

Pallet networks are seeing the first signs that the strong growth in the sector is starting to weaken. Demand is still growing – but not as quickly as many networks had forecast. Palletline managing director Glyn Jones has revised the firm’s growth forecast for this year from double-digit to single-digit. “Our pallet volumes aren’t down; they are just not increasing anything like they were. There has been a significant reduction in growth since the autumn last year. “The reasons are a slow down and reduction in stock turnaround – our members have full warehouses. Also, the slowdown in the housing market is having an impact, a lot of transhipments are domestic and consumer goods, and if people are not moving neither are these types of goods. “A third reason is hauliers are moving pallets more themselves rather than using the network to raise the use of the fleets.” Insiders in the Palletways network – the market leader by volume – agree. One told Motor Transport: “Volumes aren’t dropping, it’s just that the rate at which they have been growing is slowing. The market is maturing, there are more players around. It is to be expected.” PalletForce sales and marketing director Trevor Mudd says: “Our volume growth is down on last year but we are still meeting our budget.” And Fortec network development director Alan Cramley adds: “Our volumes in January are down on last year but that is because January 2004 was exceptional.” Pall-Ex says it did not achieve its predicted growth rate last month but sales and marketing director Chris Martin says its value-added services are helping. “Our volumes are being boosted by our diversification – offering warehouse and logistics services – and these are helping us sign up large retail clients,” he says. Rod Baynes, MD at UPN says: “We have seen our growth stabilise at the beginning of the year. However we are still predicting a 10-20% growth this year with new members coming on board in March.” And members are also seeing evidence of the slowdown. Martyn Aspland of new Fortec member Loadback says: “Volumes are very much down this year compared to the past three to four years but I can’t put my finger on a reason why.”