10 November 2010
Featured in Warehouse & Logistics News
9th November 2010
The consistent growth of pallet distribution networks has led the sector to overtake the parcels industry as a barometer of the health of the UK economy.
That is the opinion of Neil Hodgson, Managing Director of the Fortec Pallet Distribution Network who is in a strong position to compare the two sectors having also held executive positions previously with TNT and Target Express.
The Midlands based Fortec Pallet Network has consistently enjoyed record breaking volumes since the beginning of the year and is on course to achieve record volumes and profitability again in 2010.
“The pallet sector has been ahead of the parcels carriers in terms of growth for some considerable time now with pallet networks still maintaining good double-digit growth and most parcel carriers, with the exception of one or two, still stuck on modest single figure growth."
“In the main the parcels sector is still relatively flat and certainly behind the majority of the pallet networks who are all reporting reasonably healthy increased volumes."
“People have been talking about uncertainty but we haven’t seen any real evidence of it amongst our licensees and their customers."
"In fact I seriously believe that the pallet industry has now become a good barometer of the state of the economy in this country. I think we have a broader spread of deliveries whereas the major impact on the parcels carriers in recent years has obviously been retail focused particularly internet shopping,” he said.
“We now span more industry sectors than parcels carriers.” Hodgson commented that the pallet networks were now often the first choice for a wide choice of customers from manufacturing through to drinks and high value consignments in retail, electronics and pharmaceuticals. Goods where increased security through pallet distribution is paramount.
“Parcels and pallets used to be rather blurred in distribution terms. Now parcels mainly cater for smaller products, especially through the internet and obviously the pallet sector has matured and become more professional and is a realistic and competitive alternative to traditional parcel delivery,” he continued.
However, Neil Hodgson believes the pallet distribution sector does, in fact, face its own challenges. He explained: “The real challenge all pallet networks face is to consistently improve its service offering.
“Pallet delivery is one thing but it is more than that. It is everything involved in supporting the delivery – managing information, communication with customers, systems integration, on-time delivery, branding etc.
It is not so long ago that we were all arguably behind the parcels carriers in terms of IT, customer service, training etc. However, that has now changed. Certainly at Fortec we are investing substantially in IT and systems integration. Our quality service is renowned in the industry and our consistent record of growth year on year for the past several years is evidence of service standards,” he commented.
In fact Fortec recently invested over £700,000 in its advanced Fortrack system which the Geodis-owned company confidently claimed is the best in the industry. Fortec has the commercial benefit of being owned by the largest parent company of any pallet network in the UK. Parent Geodis is a global logistics provider with over 26,000 employees and an annual turnover in excess of 5.2 billion euros. Geodis is a major investor in IT systems for its multi modal transport operations internationally and the launch of Fortrack with its flexibility in terms of systems integration and management information has, Fortec believes, provided the company with a competitive edge.
Hodgson revealed: “We can easily flex Fortrack to suit an individual licensee or customer account. It enables us to bespoke the system to an individual account. It is infinitely variable from a systems integration perspective and can offer any degree of variables for management information. We are at a level of true state of the art IT with Fortrack.”
The Fortec chief confirmed that larger corporate customers in the main are demanding more management information. He agrees that Fortec has changed its business model over the past 12 to 18 months in order to successfully attack the corporate market.
“We have deliberately made a greater use of the Geodis Calberson brand. The policy is working and is evident in our results. For example in May we enjoyed two record weeks and we are 25 per cent up on last year,” he said. Fortec now has the ability to offer its customers a total service delivering parcels as well as pallets!”
In bottom line terms Neil Hodgson now feels Fortec is better equipped to attack the corporate market with confidence more than any other it its history…
“We have the strength of the international Geodis brand behind us, we can offer a total service from pallets to parcels and our investment in our new advanced IT system Fortrack ticks all the boxes in terms of management information and systems integration demanded by corporate clients.
“We can also offer a unique UK / European service within our own controlled network. We now have a service offering that can compete with the very best in the industry. The future for Fortec under our new business model looks very exciting indeed."
"We have a simple philosophy that over the next few years we are going to do more of what we do and do it better wherever possible. We want to be smarter and balanced with the right balance of products and customers to keep the business and the network of licensees efficient and profitable.”