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A parcel of hope...?
Page 18
Page 19
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Despite the ever-increasing growth of eBay and the runaway rise of pallet networks, the parcels and pallets sector has not been immune to the recession, but there is light at the end of the tunnel.
Words: Joanna Bourke.
JUST LIKE A VAST majority of the markets that the industry pulls for, the parcels and pallets sector is experiencing one of its more financially challenging times, leading to certain predictions that not everybody will make it out of 2009 intact.
Speaking at the Mail and Express Delivery Show on behalf of Triangle Management Services earlier this month, Parcelforce's managing director, David Smith, reflected: -This event is baking place against an industry lackdrop, and I would be surprised if ue have the same number of parcel ::arriers this time next year."
Firms are certainly having to work harder to compete with their rivals and also deal with extra cost burdens. He added: "Fuel and compensation payment for late deliveries can lead to lost contacts" However. Smith believes a focus on efficiency and reliability will he the vital factors when it comes to winning over the customer, and not "window dressing" such as new technology investments that do not contribute to actually delivering anything on time.
Online shopping
On the surface, at least, the parcels sector doesn't appear to be at risk of seeing its volumes dropping. In fact, the continued growth in online shopping is leaving a large quantity of goods open to tender.
According to Angeline Foong, the country product manger at eBay UK, online sales are expected to rise 13% to £20.9bn by the end of the year now that is recession-busting. In accordance with this growth, companies such as Business Post have made it clear they intend to enter the consumer-toconsumer (C2C) market, proving there are still opportunities to be seized.
"We believe we can let customers know we are there; we see it as a good area for growth," reveals Guy Buswell, Business Post's chief executive.
Meanwhile, in the pallets sector, Palletforce says it does not expect to fill its £30m hub at Burton on Trent in the current climate, and chief executive Michael Conroy says that the network had to instigate a reward incentive scheme in March in order to push volume growth.
As a result, 3,000 extra pallet movements were achieved in March, 6,000 in April and 6.800 in May. The
scheme has been taken up by around WHO USES THE PALLET NETWORKS? two thirds of members.
Conroy adds: -We sent a mailshot advertising campaign to 800 hauliers and we had 35 interested respondents, so we are looking to push our market a bit further."
Growing workloads Palletline is also keen to stress that businesses can cut miles travelled by joining a network. The network moved to its northern hub from the former Roadferry facility at Preston to Global Logistics' 40,000ft2 site located on Trafford Park, Manchester, in March.
Palletline managing director Kevin Buchanan says: "Initial calculations suggest a potential reduction in road miles in the region of 15%, reflecting our commitment to a strategy of innovations developed to benefit our membership and their clients."
Firms need to keep an eye on overheads and they are going to have to work harder under pressure, but parcels and pallets specialists can be optimistic because there is evidence of growing workloads out there. •