The distribution industry is changing constantly. The meteoric rise and growth of pallet systems in the UK underlines the inherent flexibility of a sector that serves almost every corner of industry, with the focus on continuously enhanced levels of customer service.
Exiting from recession at the beginning of the 1990s, industry in the UK had an opportunity to take a long, hard look at its requirements for the last decade of the twentieth century. Reducing order sizes and growing demand for JIT deliveries were already bringing about a significant shift in focus within the distribution industry.
Time for change
It was time for change, and industry was beginning to demand distribution services which small family businesses – the typical profile within the haulage sector at the time – found increasingly difficult to provide.
The companies who would weather the storm had recognised the need to form alliances and partnerships in order to manage change effectively. They had the perfect example in the shape of the parcels sector, who were already utilising the ‘system’ concept to achieve nationwide coverage via local operators.
Nationwide pallet distribution systems were the biggest fundamental change in UK-based haulage for decades, effectively revolutionising the market for palletised freight distribution via a highly efficient hub and spoke based operational system.
So how does it work?
Imagine a compass, and a distribution company based in Bristol. Every night, the company sends trunk vehicles loaded with goods for delivery around the other three points of the compass into a central hub.
The vehicles are offloaded, and reloaded with goods coming from the other three points of the compass destined for delivery to locations within the company’s own compass point.
Ability to offer nationwide coverage
This offers our example company significant benefits. Firstly, the ability to offer customers nationwide, pallet network, coverage and next day deliveries without having to physically travel around the country every night – reducing vehicle miles and costs.
Secondly, maximum utilisation of large trunk vehicles to and from the hub, fully loaded on both outbound and inbound journeys, yields financial benefits.
Trunking takes place at night – keeping freight off the roads during the day – and back at home base, the actual deliveries are made on smaller vehicles, benefiting from local area knowledge and reducing congestion.
There were other benefits too, linked to developing legislation. The implementation of the Working Time Directive within the distribution industry meant that this method of working offered real advantages.
Reductions in drivers’ hours meant that the more traditional operator sending loads out from a depot found it increasingly difficult to manage the hours necessary to complete the more distant tasks.
Hub and spoke system operation provided natural points for exchange of freight and drivers, enabling the participant to continue to provide a nationwide next day service. There are further benefits here.
The pallet distribution sector changed rapidly with the introduction of regional hubs, driven by volume growth and operational streamlining, further reducing trunking miles and increasing efficiency.
In addition, sophisticated IT systems fast became the secret to making it all work effectively, enabling every company to know in advance exactly what goods were coming and where they must be delivered to, facilitating effective and economical scheduling, backed up by advanced tracking technology to keep customers advised of the location of their goods at all times.
Today, pallet systems offer far more than a simple collection and delivery service. Typically, the networks active in this market serve an increasingly diverse menu, ranging from contract managed multi-user solutions through to special services geared to meet the needs of individual market sectors. What began as a good idea is now an established and dynamic method of operation, offering solid advantages to distribution businesses and customers alike.