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Driven by quality

1st September 2005
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Which of the following most accurately describes the problem?

The Pallet Network is poised on the edge of Premier League pallet distribution, and it's pushing hard for promotion. Jennifer Ball talks to TPN managing director Adam Leonard.

Adam Leonard is sporting a healthy tan. It's just a few weeks since the MD of The Pallet Network returned from his honeymoon in the Caribbean, and the sunshine has clearly revived his enthusiasm for the job. But what doubtless made his adventure all the more enjoyable was the fact that it was paid for by TPN's members.

"We were thinking of going to Italy, and the next thing I knew network development manager Peter Day had asked each member if they wanted to donate towards our wedding present, and we were going to Antigua," he says"! was absolutely overwhelmed. It was a fantastic gesture— we certainly did not expect anything."

Strong relationship

Cynics might question why anyone would want to contribute to such a cause: Leonard sees it as evidence of the strong relationship TPN has built with its 78 members in the past five years.

He reports that the company's recent move to a site in Rugby has given it "substantial room for growth to meet both continued organic expansion from its existing membership and projected growth from new members".

But despite its new 21,000m2 warehouse at Central Park, the network will not be rushing out to look for new members "I've never had a fixed idea of how many the network should have," says Leonard. "It could be a lot more or a lot less than now — it is what's right for the network.

"The available pool of quality hauliers has also downsized as they have joined other networks In addition, many family hauliers have been forced to close down due to rising costs, but these are the ones that could have benefited from joining a network.

"We're not a temporary fly-open network that's going to invite everyone in."

To emphasise this, Leonard reels out a familiar mantra: "Our philosophy has always been 'quality first, quantity second'."

He accepts that until recently TPN was seen as a first division player rather than the Premier League inhabited by Palletways, Pall-Ex and Palletline, but he reckons the gap is closing.

"We've hidden our light under a bushel, which was quite a deliberate ploy of the management as we wanted to ensure that the product was right before going to market.

-We may not be the biggest, but we're the best.We have taken hold of the market with our good reputation. We're not the finished article but we never will be. I won't be happy until we reach 100%, but that can never be. If you deliver the quality then the quantity will come on the back of this confidence."

TPN differentiates itself from other networks by not having any direct hub accounts. While this may be an increasing trend among its competitors Leonard sees it as a conflict of interests. "We don't want our members to be competing with the hub, which is undercutting them .We want them to make money from their membership — what's the point otherwise?"

TPN's members often come up with ideas to drive the firm forward; it recently replaced its 72-hour service with 48-hour deliveries in response to demand from members and their customers With 48-hour delivery now the norm in the pallet distribution sector, Leonard says that the move was a logical step.

The recent launch of its "quarter-pallet" service was also a response to members' wishes.

"It had been in our minds to launch a quarter-pallet service for some time as our members' customers had been asking for this service which has increasingly become a standard service option in the pallet distribution sector," he explains "We wanted to delay the launch of this new service until after our move to our new central hub in Rugby, which is now complete. TPN is driven by its members."

International service

'The network now has its sights set on the Continent. It has collaborated with TPN member the MAT Group to provide an international palletised distribution service.

-MAT will be delivering to France and Germany. Our members often send freight to China and Russia, but not to Paris. But taking a pallet here isthe same as delivering to Birmingham; it's just the fear of the unknown."

TPN will be looking for other partners to expand this service.

The pallet sector has enjoyed year-on-year growth of 30-40% over the past 10 years, but Leonard warns this cannot be sustained.

He says predictions that the Working Time Directive would see a surge in traffic through the networks proved sadly optimistic.

But despite this, TPN's latest results were encouraging: turnover grew 28% from £15.8m to #20.3m, with pre-tax profit topping £804,000 compared with f.625,(X)0 the previous year.

Quality service

The average amount of traffic passing through the hub rose 26% from 2,670 to 3,375 pallets a night during 2004/05: "We've had our glory," he concludes. "I expect to now see growth of between 13-15% hut I'll be delighted with that as it will justify our new premises.

"We'll continue to be driven by quality. I always say to staff, whether it's day or night. every pallet represents a volume of our members' customers' freight, and that customer is also our customer so we have to give them the quality service that they have paid for." •

Tags

Organisations: Premier League
Locations: Birmingham, Paris

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