Progress report: Palletways – The Enterprise network
PALLETWAYS had transformed its niche market when the Enterprise Network last visited two years ago, writes Jayesh Ghaghda. The company uses a network of regional hauliers to transport consignments of palletised goods -anything from canned beer to garden furniture.
The truckers deposit their loads at Palletways’ hub in Lichfield, West Midlands, and then other members of the network deliver them. The company makes its money by charging a handling fee for each pallet that passes through the network.
The challenge
Having just completed a management buyout, managing director Julian Maturi wanted to increase sales from Pounds 40m to Pounds 100m in three years by expanding the service.
He had developed a system of co-operation between hauliers to ensure smooth operations and even though the challenge of getting them to co-operate in a foreign country was daunting, Palletways Italia was quickly launched with 37 members. The plan was to roll out the operation to other parts of Europe as well as expanding in the UK.
What the experts said
John Timpson was opposed to international expansion. He thought the greatest potential for growth was in Britain, where the market was worth Pounds 250m. Money spent trying to get truckers from different parts of Europe to see eye-to-eye could be better used, and get higher returns in the UK, he said.
Taking the opposite view, Mike Langston of BT said that Palletways should invest heavily in its brand to attract foreign hauliers before trying to expand on the Continent.
Action taken
Phoenix Equity Partners saw the potential for growth at Palletways after the management buyout and decided to make a large investment. A new chief executive was appointed -James Wilson, a former chief executive of TNT Australia and New Zealand with 20 years of experience in marketing.
Palletways has expanded its network to 100 members in England and has opened a hub in London. It has also expanded in Scotland and opened a network in Ireland. The operation in Italy has almost doubled in size to 50 members. Further growth is expected once the hub moves from Verona to Bologna.
Conclusion
The company’s growth looks set to continue -turnover reached Pounds 66m last year with profits of Pounds 5m. This year the intention is to increase the number of members in the UK to 120. “We are not just looking at this from our viewpoint,” said Wilson. “We get great satisfaction in helping our regional members. Some are now market leaders of palletised freight movement in their own areas.”
Plans for expansion on the Continent also seem to be heading in the right direction. A network in the Benelux countries should be up and running in January with a central hub in Holland. This will help to obtain business from other parts of Europe such as France and the eastern European countries.
