Project director, Anand Assi, has spent more than 10 years contributing to the development of Pall-Ex’s international expansion.
Heading up a team with responsibility for aspects of the business ranging from process management and group procurement to the implementation of domestic networks, Anand is an established thought-leader for the industry.
Here, he shares his thoughts on the future for Pall-Ex and the palletised freight distribution sector.
How effective is Pall-Ex’s hub-and-spoke model across an entire continent and beyond?
The growth of e-commerce in the UK has been phenomenal; but signs suggest that domestic growth is slowing, while cross-border e-commerce is set to grow by up to a predicted 30 per cent in the coming years. The right logistics partner is important for customers seeking to take advantage of this growth.
Research suggests that UK exports into the EU are worth £211 billion to our economy, while today's economies are more linked than ever before.
Research suggests that UK exports into the EU are worth £211 billion to our economy, while today's economies are more linked than ever before. Trade conditions created by the EU have led to the development of concepts like near-sourcing, allowing companies to establish themselves and govern their domestic and international supply chains, seeking out resilient and holistic supply chain solutions.
Road transport is essential, because typically the last mile is delivered by road. Pall-Ex’s core competence is delivering that last mile, with cross-border operations linking members throughout the continent.
How does Pall-Ex’s model differ from competitors’ models and what are the benefits?
Real power grows when it is shared out in small pieces. The Pall-Ex brand ideally positions us to work alongside a variety of businesses in many different capacities. Pall-Ex is the only pallet network to implement a master license system across Europe, where Pall-Ex’s national partners bring a wealth of local knowledge and experience to operations in their own domestic networks.
This creates ideal conditions for success. Our growing Pall-Ex brand, as well as the established reputation and connections of our partners throughout Europe, assist our national partners in recruiting the best hauliers and attracting quality customers to the network.
Our collaborative strategy results in a growing, international chain of last-mile networks, creating a resilient and flexible Pall-Ex distribution model which is fit for the future. Pall-Ex will continue to establish and develop domestic networks across the mainland and further afield. Our shared system and operating philosophy protects our development strategy, connecting and empowering thousands of independent regional haulage and transport operators throughout Europe.
Is the movement of freight between Pall-Ex’s networks increasing? How does Pall-Ex facilitate and promote this aspect of its offering?
Pall-Ex is forging ahead with the continuous development of an ambitious supply chain solution. Our vision is clear. We are building a business for the future, and Europe is the future of our business.
The UK market is maturing and exports are increasing. Our solution allows SME businesses, particularly e-businesses, to develop effective distribution strategies. However, Pall-Ex’s expansion strategy does much more than giving UK hauliers and customers a route into Europe.
The Group brand attracts corporate, multi-national customers. From collections in Nottingham for delivery in Naples; to a central HQ in Brussels requiring collection in Bucharest for delivery throughout the continent, our last-mile network delivers.
Our model creates import and export opportunities throughout all of our interacting networks, while taking into account local cultures, markets and business practices.
Each member has access to a regional customer-base. These hauliers trust their fellow members, located throughout the Pall-Ex network, to distribute customers’ freight according to the ethos, systems and disciplines which govern the entire network.
Cross-border movement means our networks share the benefits of one another’s international growth. While domestic freight movement represents the majority of each network’s workload, Pall-Ex is demystifying cross-border distribution, thanks to developments such as our Pall-Ex Connect service, which last year grew by 189 per cent in terms of freight volume.
Our shared values set Pall-Ex apart from the subcontractor model relationships typical within Europe. The ‘last mile’ element of logistics can be the most problematic, but Pall-Ex is claiming this space to position itself as an efficient, trusted alternative to the main bulk players and nationally dominant brands.
What are the current and future opportunities within Europe, and how is Pall-Ex exploiting these opportunities?
Consolidation will remain the most cost-effective way to distribute freight, and we have the capability to penetrate a piece of the larger groupage market, where opportunities exist throughout the world.
However, while spot-pricing according to fluctuating market prices can be cheaper; it presents challenges for SMEs looking to implement a predictable international distribution strategy.
Groupage is delivered typically through a number of transactional, subcontractor relationships, which, even though they can be long-term relationships, tend to be more ad-hoc. Pricing can change, quality can vary, information can be difficult to obtain.
We make the difference here, and are hearing from customers who want to avoid potentially volatile services, who prefer a fixed price, allowing them to budget and sell into a service with confidence.
Of course Pall-Ex provides both fixed and spot-price tariffs depending on customer preference, but fixed rates are the preferred option for most members and customers, while spot prices are generally preferred for larger consignments and ad hoc requests.
Added to this flexibility is Pall-Ex’s IT infrastructure, which provides comprehensive, network-wide track-and-trace visibility, from collection to delivery. We currently deliver to every European postcode, operating daily departures to our six main export markets and trunking to a further 17 countries more than once a week.
Is crossing borders a big issue for road network operators? What issues should members be aware of and how should freight be presented for European distribution?
On the whole, the development of the EU has assisted in the free passage of goods and services. Each territory has its own domestic and international challenges – these vary from country to country and route to route; but generally include customs clearance procedures, route surcharges, paperwork protocols, insurance issues, and customs declaration for exports to non-EU destinations.
Good communication is key to avoiding any potential problems, while customers and hauliers are also advised to ensure that freight complies with national laws. Gov.uk provides useful information on import and export regulations.
What are the benefits of participating in an international network?
Today, being connected is not only a social trend. Connections are driving commercial behaviour. Being part of an integrated international network is a key competitive advantage for any business in terms of optimising additional growth and development opportunities.
International trade is becoming more streamlined, thanks to the advancement and adoption of technology. Connecting and trading throughout the world is now easier than ever. In palletised freight distribution, as with all business, belonging to or partnering with a suitable international network enables businesses to develop and grow.
How does Pall-Ex’s expansion affect companies in established markets, and what does it mean for those companies operating within emerging markets?
Pall-Ex has implemented networks across the European marketplace; in well-established economies as well as those emerging in the Central-Eastern region.
Due to factors including better electronic point of sale (EPOS) systems, limited retail storage space, and increasingly sophisticated customer demands, Pall-Ex’s collaborative model is ideally positioned to facilitate the independent shipper of pallets.
Our model demonstrates its strength throughout the international marketplace as order sizes are increasingly minimised and the concept of quick response logistics grows in prominence across the continent.
A real opportunity for Pall-Ex lies within Europe’s Central and Eastern markets. These markets are making great progress in terms of logistics infrastructure and networking. Here Pall-Ex can provide expertise and play a key role in developing the logistics and freight transport industries. For a new Pall-Ex network establishing itself in this region, the first stage of growth is obviously domestic, as the network embeds itself in the local market.
However, here, cross-border development presents the greatest potential, due to manufacturing throughout the region for near-sourcing purposes. Equally, there is high growth potential for UK exports into the Central and Eastern European markets.
Pall-Ex has stated its ambition to be the market-leader within three years. How crucial is our European expansion in the achievement of this goal?
Pall-Ex has invested extensively in its European development, which is an ongoing strategic goal. Establishing interconnected last-mile networks throughout the continent will result in a comprehensive infrastructure, which can drive the highest levels of sustainable quality.
Our European ambitions mean that Pall-Ex has the capacity to lead the market, not only in the UK, but also on the continent, where we are reshaping the European landscape for the distribution of smaller palletised freight consignments.