Networks’ voice
It's time companies in the maturing pallet network sector joined forces, to present a collective voice in areas of legitimate mutual interest. Quality and image would benefit, says Alan Cramley.
Everybody is still talking about pallet distribution…. Why? Well, the stories of year-on-year growth of 30, 40 and even 50% have caught the eye of everyone in the transport industry. Distribution of small consignments of palletised freight via a shared user network has been without doubt a fantastic success story. So attractive has the pallet distribution proposition become that some larger parcels companies and logistics service providers are getting in on the act. Some might see it as 'Johnny come lately' – others might advise them to 'stick to their knitting'. If that sounds conceited it is not meant to be. But certainly the sector is in good shape. The pallet networks' infrastructures are largely in place; their licensees, members or shareholders are fairly solid with no more than probably 5% movement a year of licensees between networks. The fact is that licensees are fairly tightly locked into the established networks. They have usually paid a substantial entry fee to join the bigger players with notice periods of between six and 24 months providing a ring fence against competitor poaching. What are the licensee members or shareholders getting in return? More volume, increased revenue, economies of scale, better vehicle fill and now, for shareholders, dividends on their investment. Pallet volumes continue growing with no sign of erosion in the growth curve. A lot of people are making a lot of money. It sounds like a dream ticket, but is it? To those who have been on the inside of the sector for some years, there are some basic issues that need to be addressed or this 'golden egg' may show signs of cracking under the strain of its success. We are now a sector in our own right – that is in danger of shooting itself in the foot. Why? I come back to my comment about the runaway success of the companies in the sector lacking any real direction. There must be nearly 1,000 transport operators involved in the main networks, and that figure continues to grow. But we do not have any coherent representation on the industry issues affecting us all. Areas such as the working time directive, reductions in drivers' hours, driver shortages , health & safety, forklift driver training, increased legislation, London deliveries! We are a disparate bunch (some used to unkindly call us desperate!) and I am not sure the networks are that keen to become a combined force – after all the focus is on growth, revenue and profits. Do we have time for meetings? Do we want to work together? The fact is we do not have any representation – even as a separate sector within the RHA, nor do we have a code of conduct, quality standards or anything that could be labelled as controlling or monitoring the activities of the networks. Why would we want to? The obvious answer is that it can promote quality standards and give us representation which we do not have as a sector despite our high profile within the transport industry. By doing so we could not only maintain standards across all the member companies, we could help promote the image of pallet distribution to the outside world. The key to unlocking the future success for the sector, not only in the UK but also in Europe, is based upon providing a quality product and indeed image. If the pallet networks combine to have their own voice, we can go a long way towards achieving that goal.
Alan Cramley is a director of Fortec Pallet Distribution Network.
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