Fortec after French cash
Geodis the state-controlled French transport group. faces making a key decision on the future of its small UK subsidiary, Fortec Pallet Distribution Network. Fortec director Rod Abrahams, who joined the firm 6 months ago, will ask for the best part of £10m to develop a new pallet hub next to the exisiting depot on the A5, 3 miles west of J8 on the M1.
He will be keen to show that the business is very different from United Distribution (formerly United Carriers) which Geodis closed in January this year. He will argue that the firm is profitable and growing, and worth substantial investment that is essential if it is to make progress. There is also potential to market it in France and elsewhere in Europe.
Abrahams, vest known from his period at TNT Express in the explosive 1980s and subsequently with Red Star, the Post Office and Target, believes there is massive potential at Fortec – and the pallet sector generally.
But the bid begs the question as to why would a French firm with a strong vertical brand and operational structure want to invest heavily in an off-shoot, virtually stand-alone business. It will mark a big shift for Fortec. The firm was set up 6 years ago with haulage partners but built around the Cavewood depot network. Many saw the franchisees as filling in the Cavewood gaps. Even last year, 34% of the pallets were put into the networks by Geodis Cavewood depots.
But that group input is down to 22% now and falling, as new members are brought into the system and emphasis shifts decisively towards franchise holders.
Abrahams is still looking for franchise holders – quality firms such as James Nuttall, Debach Enterprises, Valence, Priddys, Devereux, and , less well-known, R Griffin of Sheffield and Preston Fuel and Haulage in Earby Lancashire. He wants 55 depots and has 41 now – just 5 of which are in-house.
Throughput has hit 4,500 pallets a night and the hub is at capacity. Geodis is releasing more space shortly, but the new hub will be needed within 2 years. Even so, the firm has not made the same progress as Pall-Ex, which started a few months later.
Despite his background, Abrahams says he doesnt plan to mix parcels with the pallets.
