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A pallet network is a co-operative group of haulage companies which deliver loads of palletised goods from their region into a central hub and return to their region with an aggregated load comprised of pallets from other areas of the country. This has the advantage of allowing relatively small pallet loads to be delivered cost-effectively and quickly, with savings for both the transport operator and  the customer.

What is a pallet?

A pallet is a square wooden frame onto which goods can be strapped for transport and then shrink-wrapped. About 20 pallets make up a full lorry load. However many consignments are far less than a full load – sometimes even a single pallet.

Membership of the pallet networks

The first pallet network Palletline was owned by its member companies as a co-operative; other networks have a centrally owned hub and members pay fees to become part of the network. Reliability of service and financial security are essential for members as each transport operators’ payment and reputation will depend upon other members fulfilling their parts. There is therefore usually stringent vetting of members. Commonly members will be responsible for pickups and deliveries  within a specific region, often defined by postcode. Networks typically use a hub and spoke model with a central depot and members' routes extending from it in different directions.

How are the loads organised?

Most pallet networks will not accept consignments below a single pallet, although this may become more commonplace in the future. Loads are tracked by barcode with each pallet encoded with its nature, owner and destination. They are then grouped in the warehouses by destination ready to be reloaded. Some pallet networks have investigated the use of RFID chips for load tracking but this is still too expensive to be considered widely viable. However track and trace services are essential for all networks.

Who are the leading pallet networks?

• Palletline : member-owned
• Palletways : centrally owned
• Fortec : centrally owned
• Pall-Ex : centrally owned
• Palletforce : member-owned
• The Pallet Network : member shares
• United Pallet Network (UPN) : centrally owned
• Pallet-Track : shareholder-owned
• UK Pallets : part of Business Post

Other companies such as DHL use the pallet hub model but fulfil all deliveries using their own fleets. There are also small networks run by individual hauliers – such as Stan Robinson – which are successful but cannot handle the volumes enjoyed by the bespoke networks.

What is the future for pallet networks?

Pallet networks are expected to expand their operations into the home delivery and parcels sectors. This however may require the acceptance of sub-pallet loads which are repacked at the hub. Another pallet network emerged last year but it is unlikely that the UK market can sustain any more firms. However specialist markets such as hazardous goods may have potential. Currently the only specialist network is The Hazchem Network.

One recent report suggested that pallet growth could be as high as 25%; however many insiders think this is overly optimistic. There is however still scope for third-party logistics companies to take advantage of pallet networks as an asset-free way of moving goods efficiently. This could bring more supermarket deliveries within the scope of the pallet networks.