Summer and soccer. (trends of business enterprises)

Pallet networks have had some good times of late, but garden centre produce and the World Cup will fade and the network business will enter a new phase, says Glyn Jones

Pallet traffic has picked up again of late. In the past three months, for example, Palletline has seen around a 20% year-on-year increase in volume. But I find it hard to conceive of this level of growth continuing in the long term. We are planning for a much lower level of growth for the remainder of this year and ever tougher commercial competition.

The trick is to work out why there has been a sudden surge and how to respond to what is coming next. The recent increase in volumes is the result of a release of pent-up demand in many sectors of the economy. My favourite example has been the garden centre business, which has seen a late flowering, quite literally, which has driven up volumes.

Also, Germany isn't the only economy seeing a significant World Cup effect; here, there is lots of beer, soft drinks, related food products and an extraordinary array of promotional materials going through the supply chain, in preparation for the soccer.

Palletline's new quarterly survey suggests that the hauliers are feeling relatively confident, although more so in some parts of the country than others. The survey is in its infancy – we have only done two so far – but I think the results are a valid pointer to sentiment in the wider economy.

Pallet network members have weathered a storm for which they took many precautions, making the impact slightly less severe than it could otherwise have been. They had prepared for the worst, particularly in terms of costs. But the Working Time Directive hasn't yet been such a burden to network members as initially feared, beyond the irritation of extra administration; and many of our members have managed fuel price increases through fuel recovery surcharges.

Competition is as fierce as ever and the approach to pricing of some companies is hard to understand. I'd like to think that the desperation pricing reported in Motor Transport wouldn't be countenanced by any of our members and that I would know about it in advance, if there was a risk of it happening.

So, the mini-boom this spring hasn't quite created rich hauliers yet, though it is very welcome. It's also hard to see it continuing long term and in my view market growth will no longer carry forward firms – either network members or networks as a whole. This is where the market takes a new twist.

At present, few customers differentiate among pallet networks. But that is going to change, at least as far as our network is concerned. I see no other way to progress.

We will compete on customer service, which in this context means achieving the same consistently high level of service during periods of peak demand as we achieve when there is less volume-driven pressure to deliver on time. Every haulier in the network sector will know exactly what I mean; the job is relatively straightforward much of the time but gets a lot harder in September/October and in March/April, depending on when Easter falls, when volume can vary by hundreds of pallets from one night to the next for an individual haulier and by, literally, thousands for the hub.

Managing the peaks is key. We do this by using two regional hubs as well as the main central facility. Those regionals – in London and in the North – share their overheads with local depots, which helps to minimise the extra cost. The benefit is that we meet our quality targets as a whole, even at peak demand times, like Easter.

We never forget that the bulk of the value in a network lies at trading at depot level; at the centre, we just concentrate on keeping up with what our shareholder members need.