HOW PALLETS ARE DRIVING EXPRESS DELIVERY SERVICES
Express Pallet delivery
From envelopes to pallets: over the last twenty years express delivery has taken on a new form. Express shipping circuits specialized in handling palletized goods represent an attractive opportunity for small/medium transport companies hoping to raise their competitive edge both domestically and globally
“From St. Joseph to Sacramento in 10 days or less”. When back in 1861, with this rather unpolished slogan, William H. Russell, Alexander Majors and William B. Wadell thought of uniting the two coasts of the United States with a pony express, little did they know how their idea would radically change the way express delivery would work from then on. The breakthrough was guaranteed by three main requirements: extensiveness, speed and convenience.
The first couriers were little more than boys riding on horses for miles and miles through semi-deserted, inhospitable and often unsafe lands, engaged in an exhausting relay that kept that young country together. In reality, the service offered by Russell, Majors and Wadell met with little fortune: less than a year later, in fact, the pony express was swept away by a faster and safer telegraph service and soon after by the creation of the first railroad. The pony express spirit, though, lived on, and after more than a century and a half the idea has been adapted and expanded turning it into the service we are so accustomed to nowadays. Horses have been replaced with more comfortable and technologically advanced means of transportation and around this type of service multinational companies have been created.
During the first half of the 90s, the idea first introduced in 1861 by Russell, Majors and Wadell experienced a further evolution when, with the birth of the first specialized networks in express deliveries on pallets, the concept was further extended to small postal products as well as palletized goods.
From express parcels to express pallets
Delivering bulky pallets with the same speed and cost-efficiency that we normally associate to postal services may sound like something concretely impractical. Yet, within a few years, this phenomenon of British origin has spread like a wild fire throughout Europe and around the world boasting a consistently growing demand. The added value of such a service lies in its ability to combine the characteristics of express delivery services, in particular speed, with the guarantees that the distribution of palletized goods offers in terms of load safety.
The “trick” has been made possible by a real network of transport companies that, much in the same spirit of the original pony express, are able to move thousands of pallets, in tight deadlines, right across the country every day, or better still every night. Relying on a number of territorial hubs within their own network, affiliated transport and logistics companies place their pallets into the circuit to be distributed by network colleagues in their respective jurisdictions. Likewise, the dealers then proceed to collect the goods from the network hubs and, in turn, deliver them to their respective destinations.
The benefits are immediately noticeable: first, not having to say “no” to anyone who wishes to have goods – often just a few pallets - delivered to an area where the other transport companies are unable to reach without applying a significant increase in the fare. Second, but certainly equally important, the opportunity to reduce empty return trips to the benefit of the carrier’s pocket, not to mention the environment. The “you scratch my back and I scratch yours” logic behind express pallet delivery networks, combined with the standard daily operations performed within the more reputable networks, do provide certain important guarantees: after delivering his pallets into a network’s hub, a driver will not return empty handed. Finally, this type of distribution perfectly meets the changing industrial production demands made up of increasingly smaller loads, longer distances and tighter delivery times.
The evolution of demand: fewer pallets but faster!
“Over the years, we have noticed important changes in the market: the demand for full loads has decreased in favor of smaller batches, not just as the result of an economic downturn, but also because most companies are now trying to optimize their stocks and cut down storage costs by applying a ‘just-in-time’ approach when it comes to supplies. Furthermore, globalization has also meant that smaller, and strictly regional entities, have now acquired a national or even international vision of their business”: in the words of Albino Quaglia, President of Palletways Italia, one of the most active networks in our country.
Born in 1994 in the United Kingdom, Palletways is one of the earliest companies of this type to be set up in Europe and made its appearance on the Italian Market in 2002 with a “master license agreement” formula. Five years later, the company became a 100% subsidiary of Palletways Europe Ltd.
The network is now one of the most popular and widespread in the “old continent” where it boasts 14 hubs and over 400 dealers, able to deliver 38,000 pallets a day in 20 different countries. In Italy alone, the company headed by Albino Quaglia can count on over 100 dealers who deliver, on a daily basis, more than 9,000 pallets for a total of 2,050,000 pallets in 2016 (roughly 15% more than the previous year). The network operates in Italy through three hubs: the main one in Bologna, used by all dealers to manage freight traffic nationally, and two peripheral hubs in Milan and Avellino, used respectively to distribute goods that originate or are destined for the North and South of the country. In addition, 8 different delivery formats are included in Palletways Italia’s service, varying in weight and size, as well as two levels of service: premium (delivery guaranteed within 24/48 hours) and economy (delivery within 72/96 hours). Among the many benefits enjoyed by its affiliates we find the opportunity to capitalize on a well known and established brand, marketing strategies, streamlined administrative and accounting procedures and guarantees on compliance with the terms of payment, a key aspect for a successful management, especially seeing the country’s current economic scenario.
Clear rules to turn the network into a “club” with the best professionals
The heart of every network specialized in the distribution of palletized goods lies in its network of dealers. All carefully selected after assessing their financial and professional reliability, quality of service and territorial presence. Growing is not the main concern of the largest networks. In fact, the main focus is in providing all customers with a more than adequate service guaranteeing, at the same time, enough freight volume to justify their partner’s efforts. In return, all that the networks requires is to observe a clear and shared set of rules aimed at imposing precise quality standards in terms of service and delivery times, as well as a non-competition agreement between the dealers.
“Our goal is to become a “club” for the best transport and logistics companies in Italy and, at the same time, scrap the commonplace that Italian companies are not capable of networking”, explains Claudio Franceschelli, President of One Express. Established ten years ago, One Express is an all-Italian reality. What stands out in this network is the fact that the 25 members of the network, including Franceschelli, are all in turn One Express dealers, fighting each day to expand the network. Currently, One Express can count on 123 affiliates who, through the network’s four hubs located in Bologna, Milan, Naples and Rome, move more than 8,000 pallets each day (1,876,545 in 2016 a 17% increase over 2015). One Express offers its final client the option of choosing between five different pallet sizes and two levels of service: Gold (delivery within 24/48 hours) and Silver (delivery within 48/96 hours).
The key element for an express delivery pallet service is creating a synergy between the dealers and between them and the network. This latter aspect is paramount for the company headed by Franceschelli: “we award prizes when certain KPIs have been reached: for example, a total of 400,000 Euro in bonuses were distributed in 2016 alone. Since price hikes are out of the question at the moment, we try to help our dealers in reducing costs. Therefore, in April 2016 we established buying groups for vehicles, telephone services, stationeries and so on. Finally, we are all busy in trying to create new opportunities: we have recently signed an agreement with Wtransnet freight exchange to create our own freight exchange, an additional service to support the growth of our network and help, at the same time, our business partners in retaining a competitive edge”.
Growing with International ambitions
Teamwork has always been Pallex’s cornerstone. Created in the United Kingdom back in 1996, Pallex entered the Italian market in 2008 thanks to an initiative by Alberti and Santi still leading the network today. Pallex Italia offers a well structured service centred around seven different pallet sizes (including an unusual pallet measuring 2,4mts in height) and three levels of service: non-stop (delivery within 24/48 hours), standard (delivery within 48/72 hours) and International European Countries. The company stands out for having set up a network that includes, besides 130 dealers, a number of hubs to handle and distribute pallets throughout the country: the hubs are located in Ancona, Caserta, Bologna, Messina, Milan, Prato and Verona. The greater number of hubs, linked by a shuttle system, reduces the routes and distances having to be covered to deliver or collect pallets. This benefits both the affiliate’s performance and the quality of service.
Pallex handles around 5,000 pallets every night, for a total of one million pallets in 2016 alone, a figure that should be exceeded between September and October this year. Meanwhile, the network closed last year with an encouraging growth in terms of freight volume with a +35% increase in turnover.
However, despite the positive results, numbers are only one side of the story, as Melissa Alberti, President of Pallex Italia explains: “for us service comes first and volumes are just the obvious consequence. Our next mission is to develop an increasingly international service. This project got underway about a year ago and today we can count on a shipment each week, but our goal is to establish 2 or 3 over-the-border connections very soon”.
An opportunity that grows as the market grows
Applying the philosophy behind express delivery services – market coverage, speed and cost-effectiveness – to delivering goods on pallets, is therefore, not only possible and profitable, but it’s exactly what the market needs. “As e-Commerce is booming, companies are not interested in having a lot of goods in the warehouse, they want it delivered quickly and when it suits them. This new approach has favored the growth of the service we offer”, says Melissa Alberti of Pallex Italia.
For many transport and logistics companies, being part of a specialized express delivery platform, can represent an appealing solution to be added to already existing services. “Our service is dedicated to freight and logistics firms already well established in their territory which we bring under One Express’ banner, giving them the opportunity to offer their customers a national and international service they would, otherwise, be unable to offer on their own”, points out Claudio Franceschelli of One Express. “It’s a service that can make small companies great, making it possible for them to deliver palletized goods all over Italy and across Europe capitalizing on a proven system able to guarantee on-time delivery and traceability comparable to the service offered by premium companies”, claims Albino Quaglia of Palletways Italia.
From the original pony express service, which crossed the American prairies in the mid-nineteenth century and the current International express delivery networks, many years have passed and many transformations have taken place, but the concept behind it remains the same: to offer a wide, fast and economically sound service able to connect various industrial stakeholders and keep a country together.
- Foundation year: 2008
- Hub: Ancona, Caserta, Bologna, Messina,Milano,Prato and Verona
- Network: about 130 dealers in Italy
- Pallet movement: about 5.000 per day – about 1.000.000 in 2016
- Website: www.pallex.it
- Foundation year: 2007
- Hub: Bologna (Headquarters), Milano, Napoli and Roma
- Network: 123 dealers in Italy
- Pallet movement: + 8.000 per day – cabout 1.877.000 in 2016
- Website: www.oneexpress.it
- Foundation year: 2002
- Hub: Bologna (Headquarters), Avellino and Milano
- Network: more than 100 dealers in Italy
- Pallet movement: + 9.000 per day – about 2.050.000 in 2016
- Website: www.palletways.com/it